Netflix Shares Fall 26 Percent Ahead of Q3 Earnings

Netflix faces mounting investor pressure ahead of its third-quarter earnings report scheduled for Tuesday, as declining shares, weaker audience engagement and intensifying competition raise questions about its growth strategy. The streaming company has announced workforce reductions and appointed a new content chief while investors await financial results and plans to strengthen its business.

According to Yahoo Finance, Netflix shares closed Friday at approximately $70, down from $93.76 at the end of 2025. The stock has lost more than 25% this year and trades roughly 35% below its mid-April high. The Globe and Mail also reported a 26% year-to-date decline, contrasting with gains across the broader market.

Yahoo Finance data shows analysts expect earnings of $0.82 per share on revenue of $12.88 billion. Netflix's own forecast projects earnings of $0.82 per share and revenue of $12.86 billion, representing revenue growth of approximately 12% from a year earlier. The Globe and Mail reported that the company's guidance implies 11.7% growth, potentially its slowest revenue expansion in three years.

Competition and audience trends have contributed to investor concerns. According to Nielsen data cited by The Globe and Mail, Netflix's share of television viewing in the United States declined from 8.8% to 7.8% during the year ending in July. YouTube has strengthened its position, while Amazon Prime Video and HBO Max have expanded their live sports offerings.

Reuters reported that investors are "expecting details on how the streaming giant plans to sustain growth" as Netflix confronts these challenges. Co-CEO Ted Sarandos acknowledged the company's growth concerns in remarks reported by Yahoo Finance.

"is not growing as fast as I want us to," said Ted Sarandos, Netflix co-CEO.

The company has identified live programming as a potential growth driver, arguing that certain programming investments can attract new subscribers even when they do not maximize total viewing hours.

Netflix announced Wednesday that it would eliminate approximately 1,000 jobs, representing 6% of its workforce. Yahoo Finance described the reduction as the company's largest since 2022. On Friday, Netflix appointed former Disney executive Peter Rice as chief content officer, replacing Bela Bajaria. The Globe and Mail reported that Rice previously worked at Disney and 21st Century Fox and was associated with productions including Modern Family, The Bear and Slumdog Millionaire.

The leadership transition comes as Netflix faces criticism over its original programming. The Globe and Mail reported that the company's recent content lineup has disappointed some viewers, adding to concerns about its ability to maintain engagement and market share.

Analysts have also reduced their price targets. According to Benzinga data cited by Yahoo Finance, Wedbush lowered its target to $90 from $105, BMO Capital to $125 from $135, KeyBanc to $85 from $92, Barclays to $70 from $80, and Morgan Stanley to $80 from $83. All except Barclays maintained a Buy rating or its equivalent.

KeyBanc analyst Justin Patterson outlined four areas for management to address: greater content investment, product improvements, operating expense reductions and consideration of a dividend, which Netflix has never paid.

"Given the size of the company today and potential savings from AI, we suspect there is room for some degree of expense realignment," wrote Justin Patterson, a KeyBanc analyst.

Yahoo Finance's Brian Sozzi also urged management to provide substantive answers during the earnings call rather than simply repeat prepared remarks.

"This can't be a mailed-in earnings call for Netflix management," said Brian Sozzi of Yahoo Finance.

Sozzi emphasized that investors want direct explanations about the company's challenges and its response.

"Don't read off the script, give the Street what it wants," said Brian Sozzi of Yahoo Finance.

Netflix's previous earnings report disappointed investors. Its shares fell approximately 7% the day after the company released second-quarter results on July 16, when revenue came in slightly below analysts' estimates.

Investors are also watching fourth-quarter prospects because Netflix has historically recorded some of its strongest growth during the winter months. The Globe and Mail reported that management's efforts to reset expectations for audience engagement and original programming could take more than one quarter to produce visible results.

Despite the challenges, Netflix retains a global subscriber base that supports investment in programming across international markets. The Globe and Mail noted that most of the company's revenue comes from outside the United States, giving its performance a broader geographic foundation even as domestic viewing trends attract investor scrutiny.