Netflix (NASDAQ:NFLX) is expected to face questions about subscriber engagement, revenue growth and its content strategy when it reports third-quarter financial results on Tuesday, as competition from alternative streaming platforms continues to increase.
Analysts forecast that the company will report its slowest third-quarter revenue growth in three years, while recent industry data indicate a decline in average viewing time and an increase in customer cancellations in the United States.
Netflix is also pursuing changes to its programming strategy, including an expansion into live entertainment and sports broadcasting, as it seeks to diversify revenue and maintain its position in the streaming market.
Third-Quarter Revenue Expected to Increase 11.8%
Netflix is forecast to report third-quarter revenue of $12.87 billion, representing an increase of 11.8% from the corresponding period last year, according to estimates compiled by LSEG.
If confirmed, the growth rate would be the company’s lowest for a third quarter in three years.
The anticipated moderation follows several years of expansion in Netflix’s subscription business and increasing competition for viewers’ attention.
Investors will be assessing whether the company’s revenue performance remains consistent with its longer-term financial objectives.
They will also be looking for information about subscriber behaviour, advertising revenue and management’s expectations for the remainder of the year.
Co-Chief Executive Acknowledges Slower Growth
Netflix co-Chief Executive Officer Ted Sarandos recently acknowledged that the company’s expansion has not met his expectations.
The company “is not growing as fast as I want us to”, Sarandos said.
He identified live programming as a potential opportunity to accelerate growth and attract additional viewing activity.
The comments come as Netflix adjusts its content strategy to address changing audience preferences and competition from other entertainment platforms.
Live sports, events and other programming may provide opportunities to attract viewers at scheduled times, complementing the company’s existing catalogue of films and television series.
However, the financial contribution of these initiatives will depend on audience demand, content costs and the terms of broadcasting agreements.
YouTube Competition and Viewing Trends Draw Attention
Netflix faces competition not only from subscription-based streaming services but also from platforms offering free or lower-cost content produced by independent creators.
YouTube has become the leading streaming platform in the United States by viewing time, according to Nielsen.
The research company’s data indicate that YouTube accounts for nearly twice as much viewing time as Netflix and continues to increase its share of the market.
The comparison reflects a broader change in how consumers allocate their entertainment time between professionally produced programmes and creator-led videos.
For Netflix, these trends have increased attention on the amount of time subscribers spend using its service.
Jefferies estimates that average monthly viewing time per Netflix member declined to 49 hours during the first half of 2026, compared with 66 hours in the first half of 2023.
The figures suggest a reduction in viewing activity over the period, although they do not independently establish the reasons for the change.
Customer Cancellations Increase in the United States
Additional data from market research firm Apptopia indicate changes in Netflix’s customer retention and application download trends.
According to Apptopia, Netflix’s US customer churn increased 16.6% year on year during the third quarter.
That represented approximately twice the pace of increase recorded during the preceding three quarters.
Customer churn measures the rate at which subscribers discontinue a service and is one indicator of customer retention.
Apptopia also reported that Netflix application downloads in the United States and Canada declined 20%.
The figures provide an external indication of customer activity, although app downloads and estimated churn do not necessarily correspond directly to the company’s reported subscriber numbers or revenue.
Investors will be looking for management commentary on whether these trends are affecting customer acquisition and retention.
Content Schedule and World Cup Competition Affect Engagement
Analysts have also identified programming availability and competition from major sporting events as factors affecting Netflix’s viewing activity.
The 2026 FIFA World Cup drew audience attention during the year, while analysts said Netflix’s content offering was less extensive than in the previous year.
These factors were cited as possible contributors to lower engagement.
Netflix has continued to expand its involvement in sports broadcasting and recently acquired rights to show the 2030 FIFA World Cup in Spain and Andorra.
The agreement forms part of the company’s efforts to increase its presence in live programming.
Sports rights can provide access to established audiences, although their financial performance depends on acquisition costs, advertising opportunities and viewer demand.
The company’s forthcoming earnings report may provide further details about its plans for live events and sports content.
Workforce Reduction and Leadership Changes
Netflix has also undertaken organisational changes as it adjusts its operating strategy.
The company recently reduced its workforce by approximately 6%.
Ross Benes, an analyst at Emarketer, said the reductions reflected a broader shift within the streaming industry towards profitability.
The company has also experienced a change in its content leadership.
Long-serving content executive Bela Bajaria departed Netflix, with former Disney executive Peter Rice taking over the role.
The leadership transition comes as Netflix evaluates its programming priorities and investment decisions in an increasingly competitive entertainment market.
Investors may seek further information about how these changes will affect content expenditure, production planning and operating costs.
Advertising Revenue Expected to Become More Significant
Netflix is continuing to develop its advertising business as an additional source of revenue alongside subscriptions.
The company has introduced advertising-supported services as part of its efforts to reach different customer groups and diversify its income.
Jefferies forecasts that Netflix’s advertising revenue could reach $7.5 billion by 2029.
The estimate reflects expectations for further development of the company’s advertising operations but remains dependent on advertiser demand, audience engagement and execution.
Advertising revenue may also be influenced by the company’s ability to attract viewers to live events and other programming.
As Netflix expands its advertising activities, investors will be assessing their contribution to overall revenue and profitability.
Investors Await Updates on Growth Strategy
Netflix’s third-quarter results will provide an opportunity to assess its financial performance against expectations of $12.87 billion in revenue and 11.8% year-on-year growth.
The announcement comes amid evidence of lower average viewing time, higher US customer churn and increased competition from YouTube and other entertainment platforms.
Management’s commentary on content investment, live programming, advertising and customer retention will be relevant to evaluating the company’s growth strategy.
Investors will also be monitoring the effects of recent workforce reductions and leadership changes on operating costs and future programming decisions.
The results are expected to provide further information about how Netflix intends to balance revenue expansion, viewer engagement and profitability as the streaming market develops.