Netflix shares drop 12% on Q3 forecast and reporting cut

Netflix reported second-quarter earnings that narrowly met expectations but triggered a sharp stock selloff on Friday, July 17, 2026, after the company issued a weaker-than-anticipated forecast for the current quarter and announced plans to reduce the frequency of its viewer engagement reporting. The stock fell as much as 12.2% during Friday's trading session, extending a decline that began in after-hours trading following the earnings release on Thursday, July 16.

For the quarter ended June 30, Netflix posted revenue of $12.56 billion, a 13.4% increase from the same period in 2025. Net income reached $3.4 billion, or 80 cents per share, slightly exceeding analyst forecasts. The company attributed the growth to membership expansion, recent price increases, and rising advertising revenue.

Investor focus, however, shifted decisively to the outlook. Netflix projected third-quarter revenue of approximately $12.86 billion and earnings per share of 82 cents, figures that fell below Wall Street targets. The company also narrowed its full-year 2026 revenue forecast to a range of $51.0 billion to $51.4 billion while maintaining its midpoint target.

Compounding the negative reaction was a...