Netflix shares drop after forecasting slowing sales growth

Skip to Content News Archives Economy Energy Oil & Gas Renewables Electric Vehicles Mining Commodities Agriculture Real Estate Mortgages Mortgage Rates Finance Banking Insurance Fintech Cryptocurrency Work Wealth Smart Money Wealth Management Investor Personal Finance Family Finance Retirement Taxes High Net Worth FP Comment Executive Women Puzzmo Newsletters Financial Times Business Essentials More Innovation Information Technology FP500 Podcasts Small Business Lives Told Tails Told Shopping Financial Post Store Obituaries Place a Notice Advertising Advertising With Us Advertising Solutions Postmedia Ad Manager Sponsorship Requests Classifieds Place a Classifieds ad Working Profile Settings My Subscriptions Saved Articles My Offers Newsletters Customer Service FAQ News Economy Energy Mining Real Estate Finance Work Wealth Investor FP Comment Executive Women Puzzmo Newsletters Financial Times Business Essentials This advertisement has not loaded yet, but your article continues below.HomeInvestorNetflix shares drop after forecasting slowing sales growthThe streaming giant's co-chief executives Greg Peters and Ted Sarandos are discussing new tactics to attract subscribersAuthor of the article: You can save this article by registering for free here. Or sign-in if you have an account.While Netflix still has more subscribers and viewership than any other paid streaming service, its growth in sales has slowed. Photo by Patrick T. Fallon/AFP via Getty ImagesNetflix Inc. shares dropped after the company forecast a second consecutive quarter of slowing sales growth, contributing to investor anxiety about the streaming giant’s future.THIS CONTENT IS RESERVED FOR SUBSCRIBERS ONLYSubscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman, and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.SUBSCRIBE TO UNLOCK MORE ARTICLESSubscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.REGISTER / SIGN IN TO UNLOCK MORE ARTICLESCreate an account or sign in to continue with your reading experience.Access articles from across Canada with one account.Share your thoughts and join the conversation in the comments.Enjoy additional articles per month.Get email updates from your favourite authors.THIS ARTICLE IS FREE TO READ REGISTER TO UNLOCK.Create an account or sign in to continue with your reading experience.Access articles from across Canada with one accountShare your thoughts and join the conversation in the commentsEnjoy additional articles per monthGet email updates from your favourite authorsSign In or Create an AccountThe company on Thursday projected revenue of US$12.9 billion in the current quarter and earnings of 82 cents a share, both a little shy of analysts’ expectations.Shares fell about 9.5 per cent in premarket trading on Friday, compounding the company’s recent struggles on Wall Street. If the decline holds, the stock is set to hit its lowest intraday level since Sept. 2024. Netflix stock has dropped more than 40 per cent over the last year, as the company’s pursuit of Warner Bros. Discovery Inc. and subsequent financial results caused investors to worry that the leader in streaming has lost momentum.While Netflix still has more subscribers and viewership than any other paid streaming service, its growth in sales has slowed. Netflix endured a months-long drought of new hits in the first half of the year, during which many returning shows struggled to retain viewers in the new seasons.Canada's best source for investing news, analysis and insight.By signing up you consent to receive the above newsletter from Postmedia Network Inc.A welcome email is on its way. If you don't see it, please check your junk folder.The next issue of Investor will soon be in your inbox.We encountered an issue signing you up. Please try againThe company sought to reassure restive investors by outlining a plan to sustain growth in the coming years and touting recent hits such as I Will Find You, an adaptation of a Harlan Coben novel, which was Netflix’s most-viewed new original series this year. The company reported second quarter sales of US$12.6 billion and earnings of 80 cents a share, in line with Wall Street’s consensus.“We don’t manage the business on a quarter-to-quarter basis,” chief financial officer Spencer Neumann said on a call with analysts. Netflix has only reached about 45 per cent of its addressable market and accounts for just five per cent of global TV viewing, he said. The company will add US$6 billion in sales this year.Netflix is investing in new kinds of programming, such as live sports and video podcasts. Podcasts are attracting more viewers during the day and on mobile devices while live programming has helped bring in a lot of customers relative to its actual share of viewing, the company said.Netflix has announced a flurry of new deals with popular social media personalities in recent weeks, including YouTube stars Alan Chikin Chow and Nick DiGiovanni, and just rolled out a partnership with French broadcaster TF1. The company’s total spending on programming will grow about 10 per cent this year, slightly more than the average of the past few years. The company also touted its use of generative artificial intelligence on about 300 shows.The amount of time people spend on Netflix grew two per cent in the first half of 2026, a slight improvement over a year ago. The company said that was good, especially given the competition from the World Cup and Winter Olympics, which aired on other networks. Netflix headquarters in Los Angeles. Photo by Ethan Swope/BloombergYet Netflix also said it will now release its What We Watched report on show viewership annually, rather than twice a year. No other streaming service has matched Netflix’s viewership disclosure and the company now feels that recent reporting about slowing engagement has done more harm than good. The changes in reporting could also be fuelling investor concerns.This advertisement has not loaded yet.This advertisement has not loaded yet, but your article continues below.“When subscriber growth became a less reliable story, Netflix stopped reporting quarterly membership numbers,” said Mike Proulx, research director at Forrester. “Now, as engagement faces more scrutiny, the company is reducing the frequency of that report. Netflix says engagement is healthy. If that’s true, investors should want more visibility into it, not less.”Netflix co-chief executives Greg Peters and Ted Sarandos are discussing new tactics to attract subscribers, such as free trials in select markets. They have also talked about a free, ad-supported offering at some point, though the company has no immediate plans.“A free offering could make sense in some markets, but we have to be thoughtful about cannibalization of paid tiers,” Peters said on the call.—With assistance from Subrat Patnaik.We apologize, but this video has failed to load.Notice for the Postmedia NetworkThis website uses cookies to personalize your content (including ads), and allows us to analyze our traffic. Read more about cookies here. By continuing to use our site, you agree to our Terms of Use and Privacy Policy.