Netflix shares tumble as weak earnings outlook fuels doubts on growth

Netflix announced third-quarter revenue of $12.87 billion, up 11.8% year-over-year, but the growth rate was the weakest in almost three years and only met analysts' estimates. The streaming leader also reduced its 2026 advertising revenue outlook to about $2.7 billion, down from an earlier $3 billion forecast, prompting worries about a slowdown in viewership and overall revenue growth. Market analysts cited factors such as a saturated market, intense rivalry from YouTube, Amazon, Disney and the shift toward short-form platforms like TikTok.

In the earnings call, co-CEO Ted Sarandos acknowledged performance could be better, and the company has recently reshuffled its leadership, replacing chief creative officer Bela Bajaria, seeing film chief Dan Lin depart, and cutting 6% of its workforce. Over 20 brokerages have lowered their price targets, while BofA Global Research sees the changes as a sign that management is focusing on higher-quality content. Netflix’s shares have fallen more than 26% this year, erasing roughly $13.4 billion in market value.