Netflix’s quarterly earnings forecast falls short of Wall Street targets, shares tumble
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- Netflix projected Q3 revenue of US$12.86-billion and diluted EPS of 82 cents, falling short of LSEG-tracked analyst estimates of US$13-billion in revenue and 84-cent EPS.
- Shares dropped 8% in post-market trading after the guidance miss, extending a slide that had already wiped out more than a fifth of the stock's value heading into the report.
- Netflix will cut its biannual viewing-hours report to once a year starting January 2027, having already stopped publishing quarterly subscriber numbers in 2025, to keep focus on revenue and operating profit.
- Netflix posted just-ended quarter revenue of US$12.56-billion and 80-cent EPS, roughly in line with estimates, citing hits from crime drama "I Will Find You" and animated feature "Swapped."
- Netflix boosted its share buyback plan by US$25-billion following its failed bid for Warner Bros., with management describing financial performance as "solid" and on track.
- Netflix ended April with 325 million paying members and reiterated a US$3-billion ad-revenue target by year-end, counting on an expanded NFL slate to draw more advertisers.
Why it matters: Netflix's Q3 revenue guide landed about $140-million below the Street's $13-billion target, and the 8% post-market drop extends a 20%+ decline that already priced in growth anxiety. Management is leaning on a freshly enlarged $25-billion buyback, 2% viewing-hours growth (up from 1.5% a year ago), and a US$3-billion ad-revenue target as proof points — while dialing back the viewership and subscriber disclosures investors previously used to track the business.
