Netflix reported second-quarter revenue of $12.6 billion, a 13.4% year-over-year increase that fell short of Wall Street expectations, signaling a shift to a more mature business phase. Analysts project annualized revenue growth of 11.6% from 2025 to 2028, down from a 12.7% compound annual rate in the prior three years and well below the over 20% pace seen before the pandemic. The company has stopped providing quarterly subscriber metrics and will reduce engagement data disclosures to once per year starting in 2027, moves that suggest management is limiting information that could fuel pessimism. Netflix has also diversified into ad-supported tiers, gaming, live events, and potential bundling, while facing intense competition from rival streamers and social media platforms like TikTok and Instagram. Shares trade 47% below their peak with a price-to-earnings ratio of 22.3, but the slowing growth trajectory may warrant a lower valuation than in the past.
Netflix IncRevenue miss and slowing growth trajectory signal a shift to mature phase, warranting lower valuation.
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