Netflix’s third-quarter earnings failed to excite investors, a week after a major content executive shuffle and its biggest round of layoffs since 2022.
The streamer turned in results above expectations for the third quarter, but provided weak guidance for the rest of the year.
Shares fell up to 6% in after-hours trading on Tuesday.
Here’s how the streaming giant’s Q3 financial results compared to the company’s forecast:
- Revenue: $12.87 billion vs $12.86 billion estimated ($11.5 billion in Q3 2025)
- Earnings: $0.87 per share vs $0.82 per share estimated ($0.59 per share in Q3 2025)
Netflix told investors to expect earnings of $0.67 per share in the fourth quarter, below Wall Street’s $0.73 per share estimate. The company’s $13.44 billion revenue projection for Q4 was also lower than analysts’ estimate of $13.51 billion.
The streaming leader cut its annual advertising forecast from $3 billion to $2.7 billion, citing a slower-than-expected rollout of its ad products.
Heading into Q3 earnings, Netflix’s stock was down over 44% in the last year as investors worried about engagement growth and stiff competition from YouTube and other free streamers.
Netflix’s results came less than a week after it shook up its content leadership team and cut about 1,000 workers.
Content chief Bela Bajaria is leaving her role after more than three years, Netflix announced last week. The company said Monday that film chief Dan Lin is also out.
Bajaria will be replaced by Peter Rice, a former Fox and Disney exec who ran Disney’s TV division, including ABC and FX. Netflix hasn’t yet said who will replace Lin; Rice will oversee film in the meantime.
The leadership changes come as Netflix battles slowing viewership growth. The streaming powerhouse generated 97 billion viewing hours in the first half of the year, which was up 2% year-over-year.
Netflix co-CEO Ted Sarandos said at an industry event hosted by Bloomberg last month that Netflix was “not growing as fast as I want us to, and we’re working on making that move faster.”
Netflix layoffs were across its product, tech, HR, and legal teams. Co-CEOs Sarandos and Greg Peters said in a memo to staffers that the company was downsizing so it can be “disciplined about where we prioritize our people and resources.”
Other media companies have laid off employees in the last month. NBCUniversal cut a few hundred global streaming tech employees in early October, and Disney trimmed its tech and HR teams in late September.
In the second quarter, Netflix’s results were roughly in line with analysts’ expectations. The stock sank 8% after the report as Netflix said it would cut back on how frequently it shared viewership data.
