Netflix issued a weaker-than-expected fourth-quarter financial forecast on Tuesday as the streaming platform seeks to kick-start growth, overshadowing a stronger-than-expected third-quarter profit.
For the fourth quarter, Netflix projected revenue growth of 11.5% to reach $13.4 billion, reflecting a slowdown from the 17.6% increase recorded during the same period a year earlier. The company also forecasted a fourth-quarter profit of $2.8 billion, or 67 cents per share. Following the outlook update, Netflix shares fell more than 5% in after-hours trading on Tuesday.
The cautious guidance accompanied a downward revision to the company's full-year advertising revenue forecast, which was lowered to approximately $2.7 billion from a previous target of $3 billion. Netflix attributed the adjustment to ad features reaching the market more slowly than anticipated. Additionally, the streamer narrowed its full-year revenue forecast to $51.1 billion, representing the lower end of its prior guidance.
The financial update arrives on the heels of major organizational changes announced days prior, including workforce reductions affecting 6% of employees and leadership shifts that saw the departures of its Chief Content Officer and film chief. Netflix stated that the restructuring aims to support investments in high-impact areas to drive innovation and engagement.
