Netflix Revenues Up 12 Percent, But Warnings Spook Wall Street

Netflix reported 12 percent revenue growth in the quarter ending September 30. But its ad business is floundering and Wall Street responded by punishing Netflix with a 5 percent stock price drop. The stock is down about 30 percent from the beginning of 2026.

“We know there’s some investor concern about our view hours growth,” a Netflix letter to shareholders concedes. “Member response to our 2026 price increases is consistent with prior price changes and our expectations, an indicator that our engagement–which encompasses quantity, quality and variety of viewing–remains healthy and that we continue to deliver strong value to members. But we do seek to accelerate growth in view hours as well, and we’re confident we’ll do that by relentlessly focusing and executing against the aforementioned strategy.”

Netflix reported a net income of $3.4 billion on revenues of $12.9 billion in the most recent quarter, and those numbers represent gains of x percent and 12 percent, respectively, over the same quarter a year ago. The problem is that this is the slowest growth Netflix has experienced in three years, and Netflix says that growth will continue slowing in the current quarter for the fourth consecutive quarter in a row.

Netflix points to its advertising business as the main culprit: Revenues from advertising fell short and are expected to be about $300 million less than expected for the year. As a result, Netflix lowered its full-year revenue guidance.

I have bigger issues with Netflix, including what has become a routine series of price hikes and a lack of high-quality new content. Netflix was the most expensive monthly fee I canceled in my June purge of subscription services. My only regret was waiting so long to pull the plug.