Netflix Falls 8% After Q3 Forecast Disappoints as It Cuts Engagement Reports to Annual
Updated
Updated · CNBC · Jul 16
Netflix Falls 8% After Q3 Forecast Disappoints as It Cuts Engagement Reports to Annual
3 articles · Updated · CNBC · Jul 16
Summary
Netflix shares dropped more than 8% after hours after the streamer projected 12% third-quarter revenue growth and said its 2026 outlook remained consistent, despite second-quarter results landing near estimates.
Q2 revenue rose 13% to $12.56 billion, just below the $12.59 billion expected, while earnings per share came in at 80 cents versus 79 cents and net income increased to $3.40 billion.
The company also said its "What We Watched" disclosures will move to an annual first-quarter release starting in 2027, separating engagement data from earnings so investors focus on revenue and operating profit.
Management defended engagement as healthy, citing more than 97 billion viewing hours in the first half and saying second-season audience drop-off had slightly improved from last year.
Advertising remains a key growth lever as subscriber gains slow: Netflix still expects ad revenue to roughly double to $3 billion in 2026, helped by live sports and other live events.