Netflix Outlook Misses Expectations as Revenue Growth Slows

Netflix's third-quarter revenue forecast points to slower growth than in recent quarters, fueling concerns that the streaming giant may be losing momentum, although the company highlighted the success of Harlan Coben's I Will Find You, its most-watched original series released in 2026, Angela Palumbo reported for Barron's Daily.

Netflix projected slower revenue growth for the coming quarter while highlighting continued expansion in memberships and advertising. (Photo: Mike K. Flickr)

The company slightly exceeded analysts' expectations with second-quarter adjusted earnings of 80 cents per share, but missed revenue estimates after reporting $12.56 billion in revenue, up 13.4% from a year earlier.

Netflix expects third-quarter revenue to increase 11.7% year over year, but that outlook fell short of analysts' expectations.

The company also narrowed its full-year 2026 revenue guidance to $51 billion to $51.4 billion, compared with its previous forecast of $50.7 billion to $51.7 billion.

Investors also remain concerned about audience engagement as the media industry continues to consolidate, including the pending merger involving Paramount Skydance and Warner Bros. Discovery.

Netflix faces growing competition not only from traditional media companies but also from social media platforms such as TikTok and YouTube.

The company also announced changes to how it reports audience engagement. Its semiannual "What We Watched" report will become an annual publication beginning in the first quarter of 2027.

Netflix said the change reflects its focus on the quality and diversity of its programming rather than simply the total number of viewing hours.

The company added that its third-quarter outlook is supported by growth in memberships, pricing, and advertising revenue. For 2026, Netflix expects advertising revenue to roughly double to about $3 billion.