Netflix Shares Slide About 7% After Weak Profit Forecast and Slowest Growth in Nearly Three Years

Netflix shares fell nearly 7% in after-hours trading Tuesday after the streaming giant issued a weaker-than-expected profit forecast and reported its slowest revenue growth in nearly three years.

The stock dropped to $63.99 after the report, the New York Post reported. Shares had already fallen more than 40% over the past year before the results came out.

What Netflix Reported

Netflix said third-quarter revenue rose 11.8% from a year earlier to $12.87 billion, in line with its own forecast, according to the company's letter to shareholders filed with the Securities and Exchange Commission. The Post reported that the growth rate was the lowest in nearly three years.

Profit came in stronger. Operating income jumped 37% to about $4.5 billion, and diluted earnings were 87 cents a share, up from 59 cents a year earlier, the company said. Netflix credited the timing of expenses and slightly higher revenue for beating its own margin forecast.

The Forecast That Spooked Investors

For the fourth quarter, Netflix projected net income of about $2.79 billion, or 67 cents a share. That is below the average analyst estimate of $3.07 billion and 73 cents, according to the Post.

The company said its fourth-quarter operating margin forecast of 26% includes a hit of about 1.2 percentage points tied to its recently announced job cuts. Netflix announced last week that it would lay off about 6% of its workforce, nearly 1,000 positions, its biggest round of cuts since 2022.

Netflix also lowered its 2026 advertising revenue outlook to about $2.7 billion, down from roughly $3 billion. The company blamed a "slightly slower than expected rollout of some ad product capabilities."

For the full year, Netflix still expects revenue of $51.1 billion, up 13%, and an operating margin of 31.5%. That revenue figure is 0.2% below the midpoint of its earlier forecast, the company said.

Competition for Viewers

Netflix is fighting for attention against a surge in viewing on YouTube and TikTok, the Post reported, and analysts have questioned how the company will restart growth. It has added video games, podcasts and live events to keep members on the service longer.

In its letter, Netflix said it will keep focusing on streaming TV, film and live events, license more outside content and invest in original shows that "spark conversation, bring in more members, and make us a 'must-have' service."

The company said members responded to its 2026 price increases as expected, and that cancellations improved from a year earlier, both globally and in the U.S.

Hold Everyone Accountable.

Sources: New York Post, "Netflix shares tank 7% as streamer reports slower revenue growth, issues weak forecast" (Oct. 20, 2026, 4:45 PM ET): https://nypost.com/2026/10/20/media/netflix-shares-tank-7-as-streamer-reports-slower-revenue-growth-issues-weak-forecast/ ; Netflix Q3 2026 letter to shareholders (SEC filing, Exhibit 99.1, Oct. 20, 2026): https://www.sec.gov/Archives/edgar/data/1065280/000106528026000290/ex991_q326.htm ; ABC News/AP, "Netflix is laying off 6% of its workforce, in its biggest round of job cuts" (Oct. 2026): https://abcnews.com/Business/wireStory/netflix-laying-off-6-workforce-biggest-round-job-137262053