Netflix on Thursday forecast third-quarter revenue and earnings that fell short of Wall Street targets and said it would reduce the frequency of viewing hours reports as the company looks for new avenues of growth.

Shares of Netflix fell about 8.6% to $67.99 in after-hours trading.

The company, led by co-CEOs Ted Sarandos and Greg Peters, said it expected revenue of $12.86 billion from July through September and diluted earnings of 82 cents per share. Analysts had forecast revenue of $13 billion and an EPS decline of 84 cents, according to LSEG.

After years of rapid subscriber gains, ⁠Netflix is ​​working to grow by creating ads, live events and video games. The company’s stock has lost a fifth of its value this year as investors question how it will sustain growth.

PP Foresight analyst Paolo Pescatore said the third-quarter estimates “reflect a combination of management caution and a naturally maturing growth profile rather than a sudden deterioration in business.” He added that they would “reinforce the view that Netflix remains strong but is entering a steady phase of growth with significantly less room for error given ever-higher expectations.”

Netflix said it will “reduce the bi-annual publication of the viewing hours report to once a year starting in January 2027 to keep the focus on our primary financial metrics – revenue and operating profit.” It stopped publishing quarterly subscriber numbers in 2025.

For the quarter just ended, Netflix’s revenue and EPS were roughly in line with analyst estimates. Earnings per share for the three-month period came in at 80 cents, fueled by hits including the crime drama “I’ll Find You” and the animated feature “Swapped.” Total revenue $12.56 billion.

“Our financial performance has been solid and we are on track to meet our objectives for the year,” the company said in its quarterly letter to shareholders.

Competition intensifies

Netflix is ​​facing competition from all corners of the entertainment industry, from traditional media companies like Walt Disney to YouTube, a growing presence in living rooms and mobile viewing on apps like TikTok.

In April, Netflix said it had more than 325 million paying members and still had room to grow that number.

The company is building an advertising business and offering video games, two initiatives still in the early stages. It reiterated an earlier forecast that ad revenue would reach $3 billion by the end of the year. The company is counting on its growing number of live events, including an expanded NFL slate, to capture more advertising dollars.

In a post-earnings video, Peters said the company is considering whether to offer a free option with ads in some markets but has no near-term plans to launch it.

Netflix said engagement, or the amount of time people spend watching the service, is “healthy.” Viewing hours rose 2% in the first half of the year, up from 1.5% a year ago.

It said it aims to stay ahead of the competition by using technology to improve all aspects of its business. The use of generative artificial intelligence by producers is “rapidly scaling” and is operational in about 300 titles, mostly in post-production, the company said.