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Netflix shares slid as much as 8% on Thursday after financial results disappointed investors who were already anxious about decelerating user engagement at the premier streaming service.
The Los Gatos, California-based company is facing fierce competition from YouTube, TikTok and other short-form content providers.
Netflix recorded $3.4 billion in net profit between April and June, an increase of more than 9% over the same period a year earlier. Revenue came in at $12.56 billion, slightly below analyst projections.
That represented a 13.4% year-over-year increase, the lowest growth rate in nearly three years. The company anticipates a further slowdown in the third quarter, with growth of 11.7%, helping explain the jitters on Wall Street. Netflix has not published an update on its subscriber count since the first quarter of 2025, deeming the once closely followed metric too volatile.
The platform nevertheless reported that subscribers spent 97 billion hours watching content in the first half of the year, a 2% increase over the same period the previous year.
The company has been diversifying its content, most recently with shorter-form video, after expansions into live events, podcasts and gaming.
"We'll continue to expand the variety of our entertainment offering, you'll see us launch new types of content like live, like video, podcast, cloud, TV games," Netflix co-CEO Greg Peters said during a call with analysts Thursday afternoon.
"They're all doing different things in our portfolio to support different needs from (subscribers)," he said. Netflix inked licensing deals in July with multiple media publishers for short-form video content as it seeks to compete with TikTok and YouTube.
Beginning Aug. 3, Netflix subscribers in the United States, Canada, the United Kingdom, Ireland, Australia and New Zealand will start getting access to content as short as two minutes from Penske Media, BuzzFeed Studios, Conde Nast, Hearst Magazines and People Inc.
YouTube surpassed Netflix in average daily viewing time in 2025, according to research firm Digital i, cited by TechCrunch. TikTok began closing the gap in 2024, when U.S. adults were spending nearly as much time on the app as on Netflix, according to eMarketer data.
But Netflix insisted it still had room to expand. "We're entertaining an audience approaching a billion people with still lots of room to grow into our addressable market on every measure ... We estimate that we're only about 5% of TV view share globally," Netflix CFO Spencer Neumann said Thursday.
In February, Netflix abandoned an effort to buy Warner Bros. Discovery after a tense bidding war against Paramount Skydance, which ultimately agreed to buy the entertainment company in a deal worth $110 billion, including debt.
In March, a live performance by K-pop group BTS drew more than 18 million viewers, Netflix said. Its hit animated series "KPop Demon Hunters" won an Oscar for best animated feature this year. Netflix launched an ad-supported subscription tier in 2022 but does not offer a free option.
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