Netflix Faces Growth Test Before Q3 as Revenue Seen Rising 11.8% to $12.87 Billion
Updated
Updated · Reuters · Oct 19
Netflix Faces Growth Test Before Q3 as Revenue Seen Rising 11.8% to $12.87 Billion
3 articles · Updated · Reuters · Oct 19
Summary
Tuesday's Q3 report is set to test Netflix's plan to sustain growth as investors press for answers on slowing momentum and weaker user engagement.
11.8% revenue growth to $12.87 billion would mark Netflix's slowest third-quarter sales increase in three years, while co-CEO Ted Sarandos has said the company is not growing as fast as he wants.
16.6% higher U.S. churn in the third quarter, a 20% drop in U.S. and Canada downloads, and average monthly viewing time falling to 49 hours from 66 in first-half 2023 point to engagement fatigue.
YouTube now commands nearly double Netflix's U.S. viewing time, while analysts say a weaker content slate and the 2026 FIFA World Cup also weighed on engagement.
Netflix has cut about 6% of its workforce, replaced content chief Bela Bajaria with former Disney executive Peter Rice, and is leaning on live programming and advertising, with ad revenue projected at $7.5 billion in 2029.