Netflix shares sink 6% despite earnings beat after a dramatic content executive shake-up

• Netflix shares sunk 6% despite an earnings beat in Q3.
• Shares had fallen more than 44% in the last year as investors worry about slowing engagement growth.
• The streaming leader laid off about 1,000 employees last week and changed its content leadership.

Netflix's third-quarter earnings failed to excite investors, a week after a major content executive shuffle and its biggest round of layoffs since 2022.

Here's how the streaming giant's Q3 financial results compared to the company's forecast:

• Revenue: $12.87 billion vs $12.86 billion estimated ($11.5 billion in Q3 2025)
• Earnings: $0.87 per share vs $0.82 per share estimated ($0.59 per share in Q3 2025)

Shares fell 6% in immediate after-hours trading on Tuesday. Wall Street's expectations were roughly in line with Netflix's guidance.

Heading into Q3 earnings, Netflix's stock was down over 44% in the last year as investors worried about engagement growth and stiff competition from YouTube and other free streamers.

Netflix's results came less than a week after it shook up its content leadership team and cut about 1,000 workers.

Content chief Bela Bajaria is leaving her role after more than three years, Netflix announced last week. The company said Monday that film chief Dan Lin is also out.

Bajaria will be replaced by Peter Rice, a former Fox and Disney exec who ran Disney's TV division, including ABC and FX. Netflix hasn't yet said who will replace Lin; Rice will oversee film in the meantime.

The leadership changes come as Netflix battles slowing viewership growth. The streaming powerhouse generated 97 billion viewing hours in the first half of the year, which was up 2% year-over-year.

Netflix co-CEO Ted Sarandos said at an industry event hosted by Bloomberg last month that Netflix was "not growing as fast as I want us to, and we're working on making that move faster."

Netflix layoffs were across its product, tech, HR, and legal teams. Co-CEOs Sarandos and Greg Peters said in a memo to staffers that the company was downsizing so it can be "disciplined about where we prioritize our people and resources."

Other media companies have laid off employees in the last month. NBCUniversal cut a few hundred global streaming tech employees in early October, and Disney trimmed its tech and HR teams in late September.

In the second quarter, Netflix's results were roughly in line with analysts' expectations. The stock sank 8% after the report as Netflix said it would cut back on how frequently it shared viewership data.