Netflix (NASDAQ: NFLX) Stock Slides 9% as Q3 Revenue and EPS Forecast Miss Wall Street Estimates

Netflix stock slid roughly 9% Thursday after its Q3 forecast missed on two fronts. The company guided Q3 earnings per share to $0.82, below the $0.84 estimate. Netflix also projected Q3 revenue of $12.86 billion, short of the $13 billion consensus. That combined miss overshadowed a mostly in-line second quarter for Netflix. Q2 revenue reached $12.56 billion, up 13.4% year-over-year but just under estimates. 

Netflix stock had already entered the report down roughly 21% for 2026. Shares tumbled to $67.97 in after-hours trading following the announcement. The Q3 guidance implies Netflix’s slowest growth pace since Q3 2023.

Netflix’s Q3 Forecast Miss Explained

Netflix (NASDAQ: NFLX) guided third-quarter earnings per share to $0.82, missing the $0.84 estimate. The company’s revenue guidance of $12.86 billion also came in below Wall Street’s $13 billion consensus estimate. Netflix projected 11.7% revenue growth for Q3, a notable deceleration from Q2. Wall Street had expected only a slight slowdown, to around 13% growth.

Netflix’s Q3 2026 guidance versus Wall Street estimates:

• Q3 EPS guidance came in at $0.82, below the $0.84 forecast.
• Q3 revenue guidance reached $12.86 billion, versus a $13 billion estimate.
• Netflix projected an operating margin of 33.2% for the September quarter.
• The 11.7% growth rate marks Netflix’s slowest pace since Q3 2023.

Why the Deceleration Rattled Investors

Analysts had only priced in a modest slowdown from Q2’s 13.4% growth. Netflix’s 11.7% forecast represented a sharper deceleration than the market expected. That gap between expected and actual guidance triggered Thursday’s sharp selloff. Growth-stage investors reacted more to trajectory than to any single quarter’s numbers.

$NFLX – NETFLIX SHARES DROP 9.2% PREMARKET AFTER CO FORECASTS Q3 REVENUE, PROFIT BELOW ESTIMATES

— *Walter Bloomberg (@DeItaone) July 17, 2026

Netflix’s Q2 2026 Results Were Mostly In Line

Netflix posted Q2 revenue of $12.56 billion, marking a 13.4% year-over-year increase. However, the result came in just below analysts’ $12.58 billion estimate. Meanwhile, earnings per share reached $0.80, slightly ahead of the expected $0.79. Operating margin came in at 33.4%, down from 34.1% a year earlier.

Netflix stock’s price reaction to Thursday’s earnings:

• Netflix stock closed the regular session at $74.35, up 0.91%.
• Shares fell 8.58% after hours to $67.97 following the report.
• The stock dropped below its 52-week range of $70.86 to $127.75.
• Netflix stock had already fallen roughly 21% for 2026 before Thursday.

Free Cash Flow Fell Sharply This Quarter

Netflix’s free cash flow dropped to $1.53 billion, down from $2.27 billion. Higher cash tax payments tied to the Warner Bros. termination fee drove the decline. Netflix maintained its full-year free cash flow forecast near $12.5 billion regardless. The company also held its full-year operating margin target at 31.5%.

Netflix’s Buyback Program Offered a Bright Spot

Netflix repurchased $4.7 billion of its own shares during the second quarter. That marked the company’s largest quarterly buyback in its history. Netflix still has roughly $27.1 billion in remaining repurchase authorization available. The buyback signals continued confidence despite the disappointing forward guidance.

Additional context behind Netflix’s Q2 2026 results:

• Content amortization costs are expected to grow more slowly in the second half.
• Full-year content amortization is projected to rise about 10% in 2026.
• Netflix implemented its second US price increase in just over a year.
• The company narrowed full-year revenue guidance around a $51.2 billion midpoint.

Engagement Data Accompanied the Earnings Report

Netflix published its twice-yearly “What We Watched” viewing report alongside earnings Thursday. Members watched more than 97 billion hours of content in the first half of 2026. Going forward, Netflix will publish this report annually instead, starting in 2027. The company said this shift keeps focus on revenue and operating profit metrics.

How Wall Street Is Reassessing Netflix Stock

Netflix stock traded near 21 times forward earnings heading into Thursday’s report. Analysts had largely priced in continued double-digit growth through the back half. The sharper-than-expected Q3 deceleration now forces a re-rating of growth assumptions. Some analysts may trim price targets following this guidance miss in coming days.

Bottom Line

Netflix stock’s 9% slide reflects a genuine guidance miss on both revenue and EPS. The 11.7% Q3 growth forecast marks a sharper deceleration than Wall Street expected. Falling free cash flow added another data point weighing on investor sentiment. Record buyback activity and steady margins suggest the underlying business remains healthy. Netflix’s next quarter will need to prove this deceleration was a temporary blip.

Disclaimer:

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