Netflix shares dropped to $64.10 on Wednesday, marking the lowest price point since August 2024. This decline places the stock approximately 50% below the mid-2025 peak of $134.12. Despite the market reaction, the company reported third-quarter earnings per share of $0.87, surpassing the analyst consensus of $0.82. Revenue for the period reached $12.87 billion, representing a 12% increase.
The negative investor sentiment stems from the company's fourth-quarter guidance, which projects earnings per share of $0.67, falling short of the expected $0.73. Additionally, Netflix revised its 2026 advertising revenue target downward to $2.7 billion from the previously stated $3 billion, citing a slower rollout of ad-supported features.
Operational changes were announced alongside the financial results, including the reduction of approximately 1,000 jobs and the replacement of the chief creative officer and the film chief. Co-CEO Ted Sarandos acknowledged the need for improved execution in the US market, though he maintained that the company's core strategy remains unchanged.
Financial data indicates that trailing 12-month revenue reached $50 billion in September, reflecting a 20.4% compound annual growth rate since 2015. The operating margin has expanded to 34.6%, up from 28.2% a year ago. While analytics firm Antenna reported no net subscriber gains in the US through September 2026, Netflix disputed these findings, citing improved churn rates.
