A sharp drop of 9% after the market! Netflix (NFLX.US) Q3 guidelines “throw cold water” and “reduce frequency” to release viewing reports

The Zhitong Finance App learned that streaming giant Netflix (NFLX.US) released its second-quarter earnings report after the market on Thursday EST. After the results were released, Netflix's stock price fell 9% after the market, exacerbating the stock's recent weakness on Wall Street. According to the data, revenue growth is expected to slow for the second consecutive quarter in the third quarter, further increasing investors' concerns about the streaming giant's future prospects. The company expects revenue of $12.9 billion and earnings per share of $0.82 for the quarter, all slightly lower than analysts' expectations.

According to financial reports, Netflix's Q2 revenue was 12.6 billion US dollars, up 13% year over year, with earnings of 80 cents per share, which is basically in line with average market expectations.

Over the past year, Netflix's cumulative decline has exceeded 40%. The company's pursuit of the acquisition of Warner Bros. US (WBD.US) and subsequent financial performance have made investors increasingly worried that the streaming media leader has lost momentum for growth.

Although Netflix still ranks first among all paid streaming services in terms of subscribers and views, its revenue growth has clearly slowed. In the first half of this year, the company experienced a month-long empty window of popular content, and the new season of many returning series showed poor performance in terms of audience retention.

To appease uneasy investors, Netflix outlined plans to maintain growth over the next few years and promoted recent hits — such as “I Will Find You” (I Will Find You) based on a Harlan Coben (Harlan Coben) novel, which is Netflix's most-watched new original series this year. The company's second-quarter revenue was US$12.6 billion and earnings per share of US$0.80, in line with Wall Street's unanimous expectations.

Chief Financial Officer Spencer Neumann (Spencer Neumann) said during an analyst call: “We don't manage the business on a quarterly basis.” He pointed out that Netflix currently only covers about 45% of the market it can serve, accounting for only 5% of the global TV viewing time, and said that the company will increase its revenue by 6 billion US dollars this year.

Netflix is investing more in new types of programs, including live sports broadcasts and video podcasts. The company said that podcasts are attracting more daytime and mobile viewers, and although live shows do not account for a high proportion of watching time, they have already brought in a large number of users.

In recent weeks, Netflix has announced a series of new collaborations with popular social media influencers, including YouTube stars Alan Chikin Chow and Nick DiGiovanni, as well as a partnership with French broadcaster TF1. The company's total content production spending will increase by about 10% this year, slightly higher than the average of the past few years. The company also revealed that it has applied generative artificial intelligence technology in about 300 shows.

In the first half of 2026, the total time users spent on Netflix increased by 2%, a slight improvement over the same period last year. The company said that this achievement is already impressive in the face of rivals such as the World Cup and the Winter Olympics.

However, Netflix also announced that its “What We Desire” viewing report will be published from twice a year to once a year. Currently, no other streaming service can reach Netflix's viewing data disclosure level, but the company believes that recent reports of a slowdown in viewing “outweigh the benefits.” This adjustment in the frequency of data disclosure may further heighten investors' concerns.

Mike Proulx (Mike Proulx), director of research at Forrester, said: “When user growth was no longer a reliable story, Netflix stopped disclosing quarterly membership data. Now, as viewing data faces more scrutiny, the company has also reduced the frequency of publishing this report. Netflix says viewing data is healthy. If that were the case, investors should want to see more transparency, not less.”

Netflix Co-CEO Greg Peters (Greg Peters) and Ted Sarandos (Ted Sarandos) are discussing new strategies to attract subscribers, such as launching free trials in select markets. They've also discussed launching a free ad support tier at some point, but the company doesn't currently have any immediate plans.

Peters said on the conference call, “It may be reasonable to launch a free service in some markets, but we still need to carefully consider the encroachment effect on the paid tier.”