Russ Mould, investment director at AJ Bell, said: “Netflix’s latest quarterly numbers had investors reaching for the remote as its forward guidance raised fresh concerns about the company’s growth prospects.
“Second-quarter numbers more or less hit expectations but the third-quarter forecast implies the weakest revenue growth in three years and just feeds into concerns about competition and the long-term strategy following its failed attempt to buy Warner Bros Discovery.
“Netflix disappointments are on their way to becoming a regular series rather than just a one-off event – with this latest let-down following hot on the heels of poorly received first-quarter numbers.
“Netflix may have made its name in streaming but the company is behaving more like an old-fashioned TV network in some areas of its business as it looks for ways to diversify and engage viewers and get them returning to the platform.
“Advertising is an increasingly important contributor to revenue as more people sign up to its ad-supported tier. This provides an additional stream of income but one that may end up being more volatile than subscription revenue given how closely ad spend is tied to fluctuations in the wider economy.
“The company is also pursuing sport and other forms of live and daily programming, including comedy and awards shows, to give users regular touch points with the platform. Bidding for sports rights is competitive and therefore expensive.
“Netflix has increased its prices in 2026 but because it no longer discloses subscription numbers on a quarterly basis, investors are unable to view whether this has led to a meaningful level of cancellations.”
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