Netflix Sinks to an 18-Month Low as Its Growth Forecast Disappoints Wall Street Again

Netflix shares tumbled roughly 8% in after-hours trading Thursday after the company paired a second quarter that landed almost exactly where Wall Street expected with a third-quarter forecast that did not, pushing the stock to an 18-month low.

Revenue for the quarter came in at $12.56 billion, up 13.4% from a year earlier, against analyst estimates of $12.59 billion. Net income was $3.4 billion, or 80 cents per share, a penny ahead of the 79 cents analysts had modeled. On nearly every backward-looking measure, the quarter was a non-event — which is precisely why the guidance carried so much weight.

For the third quarter, Netflix said it expects revenue growth of 11.7%, to $12.86 billion. Analysts had penciled in roughly $13 billion. The gap is small in dollars but pointed in direction: it implies a sharper deceleration than the market had priced, and it arrives after a run of quarters in which investors have repeatedly punished the company's outlook rather than its results. The company narrowed its full-year revenue range to $51 billion to $51.4 billion, from an earlier $50.7 billion to $51.7 billion.

The stock has now skidded about 21% in 2026 to date. The slide reflects a shift in what the market is willing to pay for: Netflix long commanded a premium on the promise of durable double-digit growth, and each guidance cut chips at the assumption underpinning that multiple. The pattern has become familiar enough that the results themselves have stopped moving the stock. Netflix has spent this year clearing the bar it set for the quarter just finished and then lowering the bar for the quarter ahead, and investors have responded to the second half of that sequence rather than the first.

Netflix also said it will provide fewer engagement updates going forward — a decision that lands awkwardly alongside softening guidance, since viewing hours have been the metric the company steered investors toward after it stopped reporting quarterly subscriber additions. In the first half of 2026, subscribers watched 97 billion hours, up 2% from the same period in 2025. That is growth, but modest growth, and disclosing it less often invites the reading that the number is not about to get more flattering.

The clearest bright spot remains advertising. Netflix said it still expects to roughly double ad revenue year over year, to about $3 billion, and pointed to advertising and price increases as the twin engines behind the quarter's 13% top-line gain. At $3 billion, the ad business is real money but still a fraction of a roughly $51 billion company — large enough to matter to the growth story, not yet large enough to carry it.