Netflix $NFLX falls 7% after Q3 revenue guide misses $13B view

More than 7% of after-hours market value moved on a $140M guidance gap. Netflix $NFLX reported Q2 revenue of $12.56B, slightly below the $12.58B consensus cited by market data, while EPS of $0.80 topped the $0.79 estimate by one cent. The sharper number was forward-looking: Q3 revenue guidance of $12.86B landed below the roughly $13.0B Wall Street view, and shares fell more than 7% after the release.

The company’s Q2 shareholder letter showed operating income of $4.2B, up 11% year over year, and an operating margin of 33.4% versus 34.1% a year earlier. Net income was reported near $3.4B, up from about $3.13B a year earlier. Revenue grew 13%, helped by price increases and regional gains, but the result still missed the sell-side revenue bar by about $20M.

Guidance carried more weight than the backward-looking beat. The company narrowed its full-year 2026 revenue outlook to about $51.0B-$51.4B and pointed investors toward financial metrics rather than frequent engagement updates. Netflix said first-half viewing hours rose 2%, but it also plans to reduce the cadence of detailed viewing reports to once a year from 2027. That disclosure change matters because the stock has been priced on durable engagement, advertising growth, and pricing power at the same time.

The market reaction makes this a Tier-1 earnings story rather than a routine quarterly update. A one-cent EPS beat did not offset the weaker Q3 revenue guide, the $13B consensus miss, and reduced visibility into viewing hours. The next checks are management’s ad-revenue trajectory, the Q3 revenue bridge, and whether operating margin can stay above 30% while content and live-event spending rise.

Not investment advice. Verify all figures with primary sources before acting.