Top things to know
- Netflix shares dropped more than five per cent after third-quarter earnings failed to ease investor concerns over slowing engagement and revenue growth.
- The company reported Q3 revenue of $12.87 billion, up 11.8 per cent year-over-year, its slowest growth in three years, and net income of $3.66 billion.
- Netflix laid off about 1,000 employees, roughly six per cent of its workforce, and replaced chief content officer Bela Bajaria with Peter Rice.
- Co-CEO Ted Sarandos acknowledged the company is not growing as fast as he wants, and Netflix lowered its full-year ad revenue forecast to $2.7 billion.
Netflix shares fell more than five per cent on Tuesday after the streaming giant's third-quarter earnings failed to ease investor concerns about slowing viewer engagement and revenue growth. The company reported revenue of $12.87 billion for the quarter ending in September, up 11.8 per cent year-over-year but the slowest growth rate in three years, and net income of $3.66 billion, or 87 cents per share.Netflix said in its letter to investors that it was aware of "some investor concern about our view hours growth" and was "confident" it could accelerate that growth. The company recently laid off about 1,000 employees, roughly six per cent of its workforce, and replaced chief content officer Bela Bajaria with former Disney executive Peter Rice. Co-CEO Ted Sarandos said at the Bloomberg Screentime conference on October 1 that "overall, we're not growing as fast as I want us to." Netflix projected fourth-quarter revenue growth of 11.5 per cent, below Wall Street expectations, and lowered its full-year advertising revenue forecast to about $2.7 billion from $3 billion.