Netflix shares tumbled 7.3 percent on Friday after the streaming giant issued a third-quarter revenue forecast that fell short of Wall Street expectations, overshadowing another quarter of solid earnings and steady subscriber engagement.
The company expects revenue of about USD12.86 billion from July through September, below analysts’ estimates. The weaker outlook rattled investors despite second-quarter revenue rising 13 percent year on year to USD12.56 billion, broadly in line with forecasts, while operating margin remained a healthy 33 percent.
Netflix narrowed its full-year revenue guidance to USD51.0 billion to USD51.4 billion, and maintained its operating margin target of 31.5 percent, signaling confidence that its long-term growth story remains intact.
The market, however, appeared more concerned with what lies ahead than what Netflix had already delivered.
Competition in streaming is intensifying as traditional media companies, social media platforms, and short-form video apps battle for viewers’ time. In response, Netflix is broadening its playbook beyond movies and television series, expanding into advertising, live events, video podcasts, creator-led programming, cloud gaming, and artificial intelligence.
The company said recent subscription price increases have performed largely as expected, while viewing hours rose 2 percent in the first half of 2026 despite competition from the Winter Olympics and the FIFA World Cup.
Among its biggest hits, “I Will Find You” became Netflix’s most-watched original series debut of the year, while animated film Swapped is on track to become its second most-viewed original animated feature.
Netflix also announced it will publish its viewing-hours report only once a year beginning in 2027, after discontinuing quarterly subscriber disclosures last year, underscoring its shift toward emphasizing revenue and profitability over traditional audience metrics.
