Netflix Slides 4% Despite Earnings Beat as Growth Outlook Fails to Wow Wall Street

Netflix (NASDAQ:NFLX) shares fell over 4% intra-day today after the streaming giant reported second-quarter results that topped estimates but failed to fully meet investors' heightened expectations.

The company posted diluted earnings per share of $7.19, exceeding analyst forecasts of $7.08. Revenue for the quarter reached $11.08 billion, just above the $11.07 billion consensus. The results were buoyed by strong membership growth, subscription price increases, and the continued success of blockbuster content like the final season of Squid Game.

Revenue from the U.S. and Canada—the company’s largest market—rose 15% year-over-year in Q2, up from 9% growth in the previous quarter. Netflix attributed the revenue gains to higher subscription prices, growth in membership, and increased advertising income.

The company also highlighted progress in expanding its ad-supported business, stating that upfront negotiations with major ad agencies are nearing completion and projecting that ad revenue will approximately double year-over-year in 2025.

Netflix raised its full-year revenue guidance to between $44.8 billion and $45.2 billion, up from its prior forecast of $44.5 billion. Operating margin expectations were also revised higher to 29.5% from 29%.

Despite these positive metrics, the stock slid as investors reacted to what was perceived as solid but not spectacular guidance, reflecting elevated market expectations for the streaming leader’s growth trajectory.