Netflix posts higher Q3 profit but revenue growth worries pull shares lower

On Tuesday, Netflix's stock experienced a significant decline of over 5% following its quarterly earnings release, which failed to pacify investor apprehensions regarding a potential slowdown in viewer engagement and revenue growth. The company addressed these concerns in a letter to investors, acknowledging the declining view hours growth and expressing confidence in the ability to accelerate this growth.

However, Netflix has been grappling with the challenge of meeting investor expectations over the past several quarters, as competition from other streaming services and various forms of entertainment, including gaming and sports, continues to intensify.

The streaming giant reported US$12.87 billion in revenue and US$3.7 billion in net income for its third quarter, ending in September, which exceeded investor expectations, according to FactSet. However, Netflix refrained from disclosing overall figures for subscriber view hours in the quarter, but did note that in India, the metric surged by 24% compared to the same period last year.

In July, Netflix revealed that subscribers had spent a total of 97 billion hours watching content in the first half of the year, marking a 2% increase from the first half of 2025. The company ceased reporting subscriber numbers in the first half of 2025.

Earlier this month, co-CEO Ted Sarandos admitted that Netflix's growth had fallen below expectations, suggesting that live shows could provide a much-needed boost. Sarandos stated during the annual Bloomberg Screentime conference in Los Angeles on October 1, "Overall, we're not growing as fast as I want us to." The company is also reportedly planning to reduce its workforce by around 6%, which would equate to approximately 1,000 jobs, based on media reports.