Netflix Stock Slips After Earnings as Soft 2026 Guidance Overshadows Subscriber Milestone

Netflix Inc (NASDAQ: NFLX) shares declined sharply in after-hours trading Tuesday after the streaming giant reported quarterly earnings that narrowly beat Wall Street expectations but delivered weaker-than-anticipated guidance for early 2026. The stock fell more than 4% as investors reacted to signs of slowing growth, despite Netflix reaching a record-high subscriber base and reporting strong gains in advertising revenue.

For the fourth quarter ended Dec. 31, Netflix posted earnings per share of $0.56 on revenue of $12.05 billion. Both figures came in slightly above analyst estimates, which had projected EPS of $0.55 on revenue of $11.97 billion. While the earnings beat initially appeared positive, market sentiment quickly shifted following the company’s cautious outlook.

Netflix closed the year with 325 million global paid subscribers, highlighting its continued dominance in the streaming market. The company also reported that advertising revenue surged more than 2.5 times compared with 2024, exceeding $1.5 billion. The strong performance of its ad-supported tier underscores Netflix’s evolving business model and growing appeal to advertisers seeking large, global audiences.

However, the company’s forward guidance raised concerns. For the first quarter, Netflix expects earnings per share of $0.76 on revenue of $12.16 billion. These projections fell short of analyst expectations of $0.81 in EPS and $12.19 billion in revenue, contributing to the stock’s after-hours decline.

Looking further ahead, Netflix guided full-year 2026 revenue in the range of $50.7 billion to $51.7 billion, roughly in line with consensus estimates of $51.03 billion. Even so, the forecast implies year-over-year growth of 12% to 14%, or 11% to 13% on a foreign-exchange neutral basis, marking a slowdown from the 16% growth achieved in 2025.

Management attributed part of the deceleration to reduced viewing hours for non-branded, licensed content. This decline follows an unusually high level of second-run licensing during 2023 and 2024, a period impacted by the 148-day Writers Guild of America strike that temporarily halted new content production.

Overall, while Netflix continues to demonstrate scale, profitability, and advertising momentum, the softer growth outlook has investors questioning the pace of future expansion, putting pressure on NFLX stock despite its operational achievements.