Netflix Shares Fall as Weak-Dollar-Driven Forecast Fails to Impress Investors…
Los Gatos, California – July 20, 2025 — Shares of Netflix Inc. (NASDAQ: NFLX) dropped on Friday after the streaming giant’s latest earnings report delivered a muted outlook, citing currency headwinds and softening subscriber momentum despite strong content performance.
The company posted solid results for the second quarter, with revenue and earnings slightly above Wall Street expectations. However, its forward guidance for Q3 failed to excite investors. Netflix executives blamed the uninspiring forecast largely on a weakening U.S. dollar, which diminishes international revenue when converted back to domestic currency.
Netflix stock closed down 7.4% to $496.38, erasing much of the gains accumulated over the past month.
“We continue to see healthy engagement globally,” said Spencer Neumann, Netflix’s Chief Financial Officer, in a post-earnings call. “But the stronger performance in local currencies isn’t fully reflected due to FX pressure, especially in Europe and Latin America.”
Despite releasing hit shows like Red Mirror: Rebooted and the record-breaking final season of Stranger Things, the company added just 3.2 million subscribers in Q2—below the 4.1 million expected by analysts. Domestic growth was flat, while international regions showed modest increases.
The company also revealed that its advertising-supported tier, launched last year, is growing steadily but remains a small portion of its total revenue.
Analysts remain divided over Netflix’s long-term trajectory.
“Investors were hoping for a more confident outlook, especially with such a strong content slate,” said Alicia Moore, senior analyst at Bernstein. “But with currency volatility and increasing competition, the cautious guidance dampened enthusiasm.”
Netflix projected third-quarter revenue of $9.6 billion, slightly below consensus estimates, and operating margins in the 19-20% range—down from 22% in the prior quarter.
CEO Ted Sarandos remained optimistic about the company’s strategic positioning.
“We’re investing for the long haul,” he said. “Our focus remains on creative excellence, better monetization, and expanding partnerships globally. FX noise comes and goes—our fundamentals are strong.”
Still, with investors now more sensitive to macroeconomic fluctuations and tech sector valuations, the subdued forecast was enough to trigger a sell-off.
As of Friday’s close, Netflix shares are up 18% year-to-date, still outperforming some media rivals but lagging behind broader tech indexes.
