Netflix Inc (NASDAQ:NFLX) shares are falling on Wednesday after the company reported financial results for the third quarter that failed to meet analyst expectations.
- NFLX is feeling the pressure from bearish momentum. Track the latest developments here.
What Happened: Netflix reported third-quarter revenue of $11.510 billion, missing analyst estimates of $11.514 billion, according to Benzinga Pro. The streaming giant reported third-quarter earnings of $5.87 per share, missing estimates of $6.97 per share.
Total revenue was up 17% year-over-year in the quarter. Netflix said it hit its highest quarterly view share ever in the U.S. and U.K., which has grown 15% and 22%, respectively since the fourth quarter of 2022.
Operating margin came in at 28%, below prior guidance of 31.5% due to an “ongoing dispute” with tax authorities in Brazil. Netflix said it had its best quarter to date for ad sales and noted that it doubled its commitments in the U.S. upfront.
“We're leveraging GenAI to further enhance the member experience by improving the quality of our recommendations and content discovery features,” the company said in a letter to shareholders.
“In Q4, we are using AI to test new ad formats, to generate the most relevant ad creative and placement for members, and for faster development of media plans.”
Netflix guided for fourth-quarter revenue of $11.96 billion versus estimates of $11.9 billion. The company anticipates fourth-quarter earnings of $5.45 per share versus estimates of $5.42 per share. Netflix also narrowed its full-year revenue outlook from a range of $44.8 billion to $45.2 billion to a new target of $45.1 billion versus estimates of $45.01 billion.
Multiple analysts weighed in on Netflix’s quarterly performance following the print.
- Needham analyst Laura Martin reiterated Netflix with a Buy rating and maintained a price target of $1,500.
- Wedbush analyst Alicia Reese maintained Netflix with an Outperform and lowered the price target from $1,500 to $1,400.
- Benchmark analyst Daniel Kurnos reiterated Netflix with a Hold rating.
- Guggenheim analyst Michael Morris reiterated Netflix with a Buy and maintained a price target of $1,450.
NFLX Price Action: Netflix shares were down 8.01% at $1,141.88 at the time of publication on Wednesday, according to Benzinga Pro.
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