Netflix shares fall 6% after Q3 results show slower revenue growth
Netflix reported a deceleration in revenue growth for the fourth quarter, prompting a 6% drop in its stock and highlighting ongoing challenges after recent layoffs.
Netflix (NFLX) announced a 6% decline in its share price after releasing third-quarter results that showed revenue growth is expected to slow further, with a forecasted 11.5% year-over-year increase for the fourth quarter. The company also disclosed a layoff of 1,000 employees, representing about 6% of its workforce, as part of an effort to improve operational efficiency.
The stock is now trading roughly 51% below its peak reached in June 2025. Analysts note that the company has experienced similar declines after periods of rapid expansion, citing past instances where strategic missteps or market pressures led to temporary price drops that were later recovered.
For 2026, Netflix projects total revenue of $51.1 billion, at the lower end of its earlier guidance, and expects advertising revenue of $2.7 billion, down from a prior estimate of $3 billion. The firm stopped reporting subscriber numbers at the start of 2025, and viewership hours grew only 2% in the first half of 2026, indicating a more mature growth phase.
Despite generating earnings and free cash flow, the company faces heightened competition and uncertainty about whether the slowdown in growth can be reversed.