Netflix reports revenue of 12.9 billion (+11.8 per cent). Advertising estimates slashed by 10 per cent; forecasts prove disappointing
Article excerpt
Netflix is making more money, but Wall Street is taking stock of its slowing growth. The streaming giant ended the third quarter with profits up 44 per cent to $3.66 billion, exceeding expectations (earnings per share stood at 87 cents, compared with the 82 cents forecast by the market). Yet the share price fell by almost 7 per cent in after-hours trading. Weighing on the share price are the outlook for the final three months of the year, the downward revision of advertising forecasts and a key question running through the entire financial statements: how can the company persuade viewers to spend more time on the platform? Revenue rose by 11.8 per cent to $12.87 billion, in line with analysts’ forecasts. However, this is the smallest increase in nearly three years. And weighing on the outlook are the forecasts for the fourth quarter: Netflix expects revenue of $13.44 billion, which is below the $13.5 billion anticipated by analysts according to Visible Alpha. The forecast net profit of $2.79 billion is also below the $3.07 billion estimated by the market, whilst earnings per share are expected to be 67 cents, compared with the consensus estimate of 73 cents. Netflix, for its part, has reduced its advertising revenue forecast for 2026 by 10%, bringing it down from around 3 billion to 2.7 billion dollars. The company attributed the revision to a slower-than-expected roll-out...
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Dan Lin, head of film, is also leaving.