Netflix Stocks Drop 7.90% After Q2 Revenue Miss and Weak Q3 Guidance

Netflix reported Q2 earnings on the 16th (local time) that missed revenue expectations, triggering a 7.90% stock decline in after-hours trading. The streaming company posted revenue of $12.56 billion, falling short of the $12.59 billion estimate, while Q3 EPS guidance of $0.82 came in below analyst expectations of $0.84. The company narrowed its full-year revenue guidance range to $51.0-51.4 billion from $50.7-51.7 billion, lowering the upper end by $300 million, and announced it will reduce viewing time report frequency from twice yearly to once yearly starting next year.

Netflix Reports Q2 Revenue Miss at $12.56 Billion

Netflix announced after the New York market close on the 16th (local time) that Q2 earnings per share came in at $0.80, slightly exceeding the $0.79 estimate compiled by financial data firm LSEG. Revenue totaled $12.56 billion, missing the $12.59 billion forecast.

Netflix Sets Q3 EPS Guidance at $0.82, Below Estimates

Netflix provided Q3 guidance of $0.82 for EPS and $13.0 billion for revenue. The revenue guidance matched market expectations, but the EPS figure fell short of the $0.84 estimate.

Netflix Narrows Full-Year Revenue Guidance Range

The company narrowed its full-year revenue guidance range to $51.0-51.4 billion from the previous $50.7-51.7 billion, lowering the upper end by $300 million. In a shareholder letter, Netflix stated it will "prioritize reinvestment in the business while maintaining a healthy financial position and sufficient liquidity through organic investment and selective mergers and acquisitions (M&A)," leaving the door open for additional M&A activity.

Netflix Reduces Viewing Time Report Frequency to Once Yearly

Netflix announced it will reduce the frequency of its viewing time reports from twice yearly to once yearly starting next year. The company explained the change is "to focus on core financial metrics such as revenue and operating profit." Netflix previously stopped disclosing quarterly subscriber counts last year.

Netflix Stocks Fall 7.90% in After-Hours Trading

Following the earnings announcement, Netflix stocks traded at $68.48 in after-hours trading as of 4:34 PM, down 7.90%. The stock had closed the regular session up 0.91%.

FAQ

What were Netflix's Q2 earnings results on the 16th? Netflix reported Q2 EPS of $0.80, exceeding the $0.79 estimate, but revenue of $12.56 billion fell short of the $12.59 billion forecast.

Why did Netflix stocks drop 7.90% in after-hours trading? Netflix stocks fell 7.90% to $68.48 in after-hours trading after the company reported Q2 revenue below estimates at $12.56 billion and provided Q3 EPS guidance of $0.82, which missed the $0.84 analyst expectation.