Netflix says softer U.S. viewing drove its leadership shake-up as forecast disappoints
Netflix co-CEOs Ted Sarandos and Greg Peters acknowledged on Tuesday’s earnings call that a slowdown in U.S. viewing and ad sales was behind the recent overhaul of the streamer’s content leadership, Variety reported. Netflix shares fell 6% in premarket trading Wednesday after its fourth-quarter revenue outlook missed estimates, Yahoo Finance reported.
The shake-up: Netflix ousted chief content officer Bela Bajaria and film chief Dan Lin, Variety reported. Former Fox and Disney executive Peter Rice was named Bajaria’s successor on Oct. 15 and starts next week. Last week Netflix also said it would cut 6% of its workforce, or about 1,000 employees, according to Yahoo Finance.
What they said: “We had some really solid doubles and triples this year, but the other territories count on some of those titles being home runs so that they’ll travel around the world. We’re focusing on that execution,” Sarandos said, according to Variety. Peters said U.S. engagement is “solid,” adding, “But we know that we can do better,” Yahoo Finance reported.
The numbers: Netflix reported third-quarter revenue of $12.87 billion, in line with estimates, and earnings of $0.87 a share, above the $0.82 analysts expected, Yahoo Finance reported. It forecast fourth-quarter revenue of $13.44 billion, below the $13.51 billion consensus, and cut its 2026 ad revenue guidance to $2.7 billion from $3 billion.
Bright spots: Peters said subscriber churn improved in the U.S. and globally after recent price increases, and that view hours in India grew 24% in the third quarter, Variety reported.