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Netflix stock tanks as Q3 revenue falls short: 'Nothing here to get excited about'
Yahoo Finance • • general
Key Points:
- Netflix shares dropped over 10% following a third-quarter outlook that missed Wall Street expectations and underwhelming engagement trends, despite beating earnings estimates for Q2.
- Q2 revenue rose 13.4% year-over-year to $12.56 billion, slightly below consensus, with earnings per share at $0.80 beating estimates; however, revenue growth slowed from the previous quarter.
- The company forecasted Q3 revenue of $12.86 billion and EPS of $0.82, both below analyst expectations, while full-year 2026 revenue guidance remained steady around $51 billion.
- Netflix highlighted a record 97 billion viewing hours in H1 2026 but noted that not all viewing hours contribute equally to revenue, emphasizing live events as a growing focus in content strategy.
- The streamer plans to expand short-form content and ad-supported tiers but has no immediate plans for a free tier; it also reported a decline in free cash flow to $1.5 billion, partly due to a $2.8 billion breakup fee from a failed Warner Bros. Discovery bid.
