Netflix (NFLX) shares fell 6% in premarket trading Wednesday as the streaming giant’s fourth-quarter revenue outlook fell short of Wall Street estimates, indicating slower growth. The company expects fourth-quarter revenue of $13.44 billion, below analysts’ consensus estimate of $13.51 billion. Netflix also cut its 2026 ad revenue forecast from $3 billion to $2.7 billion due to a slower-than-expected rollout of certain ad product capabilities. Wall Street has been focused on engagement, which management said was healthy given the response to this year’s price increases. When it comes to the United States, “our commitment is strong and will allow us to continue to grow as we have over the past several years,” Netflix co-CEO Greg Peters said during the earnings call. “But we know we can do better… Our goal is to go from very good to excellent,” he added. Wall Street analysts were looking for signs on whether the slowdown in engagement would hurt revenue growth numbers. “That’s exactly what we’re seeing with the Q4 growth outlook,” Geetha Ranganathan, senior media analyst at Bloomberg Intelligence, told Yahoo Finance after the results were released. “This speaks to a slow-growing algorithm, which undoubtedly means problems for the company,” he added. 68.69 -1.16 (-1.66%) Close: October 20 at 4:00:00 pm EDT 64.10 -4.59 (-6.68%) Premarket: 7:45:00 am EDT The company posted revenue of $12.87 billion in its fiscal third quarter, in line with analyst estimates. Earnings per share were $0.87, beating estimates of $0.82. The results follow the streaming giant’s plan to cut jobs and a leadership shakeup announced last week amid a slowdown in viewer engagement. Last week, former Disney executive Peter Rice was named Netflix’s next chief content officer. Rice replaces Bela Bajaria, who worked at the streamer for nearly a decade and served as CCO since 2023. Also last week, Netflix said it would cut 6% of its workforce, or about 1,000 employees, marking the company’s largest employee reduction since 2022. The move comes as the company looks to reinvigorate audience growth and strengthen its content amid growing competition and short-form viewing habits. Audiences have increasingly moved away from traditional televisions toward mobile devices, Piper Sandler director and senior research analyst Tom Champion said in a recent interview. “Where many of the The growth is due to short form, content created especially for mobile devices,” Champion told Yahoo Finance. “That has given rise to TikTok and Instagram Reels and, increasingly, YouTube seems to be the superpower in terms of video content.”
