Netflix Shares Slide as Solid Profits Fail to Ease Worries About Viewing Growth

Netflix reported higher revenue and profit for the third quarter on Tuesday, but its shares fell as investors focused on signs that people are spending less additional time on the service and on a cut to its advertising forecast.

Revenue for the three months through September rose about 12 percent from a year earlier, to $12.87 billion, and net income was about $3.7 billion, according to AFP and CNBC. Forbes Middle East put the rise in net profit at 44 percent, helped by higher subscription prices and growing ad sales. The results were roughly in line with or slightly above what analysts had expected.

The concern was what comes next. Netflix now expects about $2.7 billion in advertising revenue for 2026, below its earlier forecast of roughly $3 billion, Variety and Quartz reported. Bloomberg reported that the company’s sales growth was on track to slow for a fourth straight quarter, and Deadline reported that the stock fell on lower guidance for fourth-quarter revenue and advertising, accounts the paper could not independently confirm. AFP reported that the shares dropped more than 5 percent.

Engagement has become the number investors watch most closely since Netflix stopped reporting subscriber totals in 2025. The company did not give overall viewing hours for the quarter. In July it said members watched 97 billion hours in the first half of 2026, up 2 percent from a year earlier. In its letter to shareholders on Tuesday, Netflix acknowledged investor concern about the growth of viewing hours and said it was confident it could speed that growth up. It pointed to strong gains in some markets, including a 24 percent rise in viewing hours in India.

The New York Times reported that the company described its engagement as healthy and said it would try to bring more programming from outside studios onto the service, a shift for a company that has spent heavily on its own shows and films. The paper could not independently confirm the Times account.

Some investors have grown impatient. John Belton, a portfolio manager at Gabelli Funds, told AFP that Netflix had significantly underperformed over the past six to 12 months, citing soft engagement, slowing revenue growth, a more modest outlook for profit margins and recent changes among the executives who lead its programming. Co-chief executive Ted Sarandos said at a Bloomberg conference in Los Angeles on Sept. 30 that the company was not growing as fast as he wanted, Bloomberg reported, as Netflix puts about 5 percent of its $20 billion content budget into live programming to help.

Netflix’s defenders note that the company remains highly profitable, earning about $3.7 billion in a single quarter, and that its revenue is still growing at a double-digit pace. But it faces competition for viewers’ time from other streaming services and from sports and other entertainment, AFP noted, and investors appear to want evidence that it can keep winning a larger share of that time.