Netflix issued a third-quarter financial forecast on Thursday that missed analyst projections for both revenue and earnings. The company estimated revenue of $12.86 billion and diluted earnings per share (EPS) of 82 cents, compared to analyst expectations of $13 billion and 84 cents per share. Following the announcement, Netflix shares fell nearly 8% in after-hours trading.
The company also announced it will reduce the frequency of its viewing-hours disclosures. Starting in January 2027, the streaming service will release these reports annually rather than biannually. Netflix stated the change is intended to maintain focus on primary financial metrics such as revenue and operating profit. This follows the company's 2025 decision to stop reporting quarterly subscriber figures.
For the second quarter, Netflix reported revenue of $12.56 billion and an EPS of 80 cents, results that were largely in line with analyst estimates. Management attributed the performance to content such as the drama "I Will Find You" and stated the company remains on track to meet its annual objectives. The report noted that viewing hours grew by 2% in the first half of the year.
To drive future growth, Netflix is expanding its advertising business, offering video games, and increasing its live event programming, including NFL games. The company projected that ad revenue would reach $3 billion by the end of 2024. Additionally, Netflix reported that generative artificial intelligence has been utilized in approximately 300 titles, primarily during post-production processes.