Netflix shares slide to a two-year low after weak outlook and a cut to ad-revenue forecast
Netflix forecast fourth-quarter profit below Wall Street estimates and lowered its 2026 advertising revenue outlook to about $2.7 billion from $3 billion, sending its shares down around 6-7% before the opening bell on 21 October.
Netflix shares fell about 6-7% in premarket trading on Wednesday, 21 October, to their lowest level since August 2024, after the streamer’s quarterly report on Tuesday disappointed investors, Reuters and Variety reported.
The numbers
Third-quarter revenue rose 11.8% to $12.87 billion, in line with forecasts but the slowest growth in nearly three years, according to Reuters. Earnings per share of 87 cents beat the 82-cent consensus. But Netflix guided for fourth-quarter net income of $2.79 billion, or 67 cents a share, below analysts’ average forecast of $3.07 billion and 73 cents, and for quarterly revenue of about $13.4 billion, slightly short of estimates.
The company also cut its 2026 advertising revenue forecast to roughly $2.7 billion from about $3 billion, saying some ad product capabilities had rolled out more slowly than expected.
Pressure from short video
The results come days after Netflix announced it would cut about 6% of its workforce and named former Disney executive Peter Rice as chief content officer. Analysts point to competition from YouTube, TikTok and other platforms. “Growth has clearly slowed at Netflix,” Evercore ISI analysts wrote, according to Reuters. Co-CEO Greg Peters told analysts the company wants “to go from very good to great”. The stock had already fallen more than 26% this year before the report.
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