Netflix (NFLX) stock fell 5% in after-hours trading on Tuesday as the streaming giant’s Q4 revenue outlook came in below Wall Street estimates.
The company posted revenue of $12.87 billion in its fiscal third quarter, in line with analyst estimates. Earnings per share came in at $0.87, topping estimates of $0.82.
Fourth-quarter estimates for the company’s topline, though, came in at $13.44 billion, short of the $13.51 billion expected by analysts.
The results follow the streaming giant’s job-cutting plan and a leadership shake-up announced last week amid slowing viewer engagement.
Last week, former Disney executive Peter Rice was named Netflix’s next chief content officer. Rice replaced Bela Bajaria, who worked at the streamer for nearly a decade and served as CCO since 2023.
Also last week, Netflix said it would cut 6% of its workforce, or about 1,000 employees, marking the company’s largest reduction of employees since 2022.
68.69 -1.16 (-1.66%)
At close: 4:00:00 PM EDT
65.71 -2.98 (-4.34%)
After hours: 4:22:57 PM EDT
The move comes as the company seeks to reinvigorate viewership growth and strengthen its content amid growing competition and short-form viewing habits.
Audiences have increasingly moved away from traditional television sets toward mobile devices, noted Piper Sandler director and senior research analyst Tom Champion in a recent interview.
“Where a lot of the growth has come from has been short form, has been content especially built for mobile,” Champion told Yahoo Finance. “That’s given rise to TikTok and Instagram Reels, and increasingly, YouTube seems like the superpower in terms of video content.”
Earlier this year, Paramount outbid Netflix for Warner Bros. Discovery and won shareholder approval for its revised $111 billion deal, including debt, in April.
The streamer’s stock has declined roughly 48% from its June 2025 record high as user engagement has stalled.
Shares are down roughly 25% year-to-date.
Ines Ferre is a senior business reporter for Yahoo Finance.
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