NFLX Stock Sinks Over 8% After-Hours — Q2 Revenue Miss And Q3 Weak Guidance Weigh On Netflix Shares

• Second-quarter earnings edged past expectations, but revenue fell short of Wall Street forecasts.
• Netflix’s third-quarter revenue and earnings guidance came in below analyst estimates, weighing on the stock.
• The company plans to publish its “What We Watched” engagement report annually instead of twice a year beginning in 2027.

Netflix (NFLX) shares fell more than 8% in after-hours trading on Thursday after the streaming giant reported second-quarter revenue that missed Wall Street estimates and issued third-quarter guidance that also came in below expectations.

NFLX shares had ended the regular session up 0.91%. At the time of writing, the NFLX stock was down 8.35% in extended trading.

Netflix Posts Earnings Beat But Revenue Falls Short

Netflix reported fiscal second-quarter earnings per share of $0.80, up from $0.72 a year earlier and slightly above analysts' expectations of $0.79, according to Fiscal.ai. Revenue, however, missed estimates, coming in at $12.56 billion versus the expected $12.58 billion, according to Fiscal.ai.

According to a post on X by Fiscal.ai, Netflix grew revenue by more than 10% across every geographic region in the second quarter, rising 10% in the U.S. and Canada, 14% in Europe, the Middle East, and Africa, 21% in Latin America, and 16% in the Asia Pacific.

The company said live programming continues to play an important role despite accounting for a relatively small share of total viewing. Netflix expects live content to represent about 5% of its content budget this year but only around 1% of viewing hours. However, six of the 10 biggest new-member sign-up days over the past five years were driven by live events, which Netflix said helped boost subscriber acquisition, advertising revenue and fan engagement.

Netflix also endured a months-long drought of new hit shows during the first half of the year, with many returning series struggling to retain viewers. That streak ended with ‘I Will Find You,’ an adaptation of a Harlan Coben novel, which became the company’s most-watched new original series of the year, according to Bloomberg.

Soft Outlook Weighs On NFLX Shares

Netflix forecast third-quarter earnings and revenue below Wall Street expectations and said it will reduce the amount of information it discloses on viewing hours as it looks for new avenues of growth in an increasingly competitive streaming market.

The company expects third-quarter earnings per share of $0.82 on revenue of $12.86 billion, compared with analysts’ expectations of $0.84 and $13 billion, respectively, according to Fiscal.ai.

For full-year 2026, Netflix expects revenue of $51 billion to $51.4 billion, compared with its previous forecast of $50.7 billion to $51.7 billion. Analysts expect $51.38 billion, according to Fiscal.ai.

Netflix also said it will scale back its “What We Watched” reports. After releasing its latest report covering the first half of 2026, the company will begin publishing the engagement report annually in the first quarter starting in 2027.

M&A Strategy Remains Unchanged

Late last year, Netflix explored a deal for Warner Bros. Discovery's film and streaming business before walking away after Paramount Skydance launched a higher bid, triggering a bidding war. Netflix ultimately declined to match the rival offer, saying the price was no longer financially attractive.

On Thursday, Netflix said its capital allocation strategy remains unchanged and that it will prioritize reinvestment in the business, both organically and through selective M&A, while maintaining a healthy balance sheet and ample liquidity. Management added that its "track record is clear that we have a very high bar to do any big M&A."

NFLX Stock: What Stocktwits Retail Sentiment Says

On Stocktwits, retail sentiment toward NFLX jumped to ‘extremely bullish’ from ‘bullish’ in the past 24 hours, while message volume was ‘high’ at the time of writing.

NFLX shares have declined more than 40% over the past year as investors questioned whether the company's pursuit of Warner Bros. Discovery assets and subsequent financial performance signaled a loss of momentum.

Also See: GOOGL Stock Falls 5% As Google’s Flagship AI Model Reportedly Runs Behind Schedule — Why Retail Traders Aren’t Worried 

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