Netflix Shares Sink After Q3 Earnings, Wall Street Weighs Exec Shuffle
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Netflix hired Peter Rice as its new content chief as co-CEO Ted Sarandos tries to boost growth.
Frank Micelotta/Tubi via Getty Images; Samuel Boivin/NurPhoto via Getty Images; Chris Pizzello/AP
By James Faris
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Netflix's third-quarter earnings failed to excite investors, a week after a major content executive shuffle and its biggest round of layoffs since 2022.
The streamer reported results above expectations for Q3 but provided weak guidance for the rest of the year. Revenue growth slowed for a third straight quarter, and the company projected a continued deceleration in the fourth quarter.
Shares fell up to 6% in after-hours trading on Tuesday.
"While Netflix is growing, the pace of that growth is slowing," said Forrester's Mike Proulx. "That's a wake-up call for the company that once defined the streaming market and is now in need of growth reacceleration."
Here's a comparison of Netflix's Q3 financials to its forecasts:
- Revenue: $12.87 billion vs $12.86 billion estimated ($11.5 billion in Q3 2025)
- Earnings: $0.87 per share vs $0.82 per share estimated ($0.59 per share in Q3 2025)
Netflix projected earnings of $0.67 per share for the fourth quarter, below Wall Street's $0.73 per share estimate. The company's $13.44 billion revenue projection for Q4 was also lower than analysts' estimate of $13.51 billion.
The streaming giant also cut its annual advertising forecast from $3 billion to $2.7 billion, citing a slower-than-expected rollout of its ad products.