Netflix shares sink on earnings after a dramatic content executive shake-up

Netflix hired Peter Rice as its new content chief as co-CEO Ted Sarandos tries to boost growth.

Frank Micelotta/Tubi via Getty Images; Samuel Boivin/NurPhoto via Getty Images; Chris Pizzello/AP Netflix shares sank up to 6% after a Q3 earnings beat and weak guidance for the rest of the year.

Shares had fallen about 44% in the last year as investors worry about slowing growth.

The streaming leader laid off about 1,000 employees last week and changed its content leadership.

Netflix's third-quarter earnings failed to excite investors, a week after a major content executive shuffle and its biggest round of layoffs since 2022.

The streamer turned in results above expectations for the third quarter, but provided weak guidance for the rest of the year.

Netflix said its earnings beat was primarily due to the timing of expenses.

Netflix's revenue growth slowed for a third straight quarter, and the company projected it would continue to decelerate in the fourth quarter.

Shares fell up to 6% in after-hours trading on Tuesday.

"While Netflix is growing, the pace of that growth is slowing," Forrester's Mike Proulx said.

"That's a wake-up call for the company that once defined the streaming market and is now in need of growth reacceleration." Here's how the streaming giant's Q3 financial results compared to the company's forecast: Revenue: $12.87 billion vs $12.86 billion estimated ($11.5 billion in Q3 2025) Earnings: $0.87 per share vs $0.82 per share estimated ($0.59 per share in Q3 2025) Netflix told investors to expect earnings of $0.67 per share in the fourth quarter, below Wall Street's $0.73 per share estimate.

The company's $13.44 billion revenue projection for Q4 was also lower than analysts' estimate of $13.51 billion.

The streaming leader cut its annual advertising forecast from $3 billion to $2.7 billion, citing a slower-than-expected rollout of its ad products.

"With Netflix under pressure to find alternative lines of revenue beyond subscriptions, it's concerning that the company lowered its estimate for its ad business," said analyst Ross Benes of Emarketer, Business Insider's sister company.