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"Lacks Excitement": Netflix Tumbles 9% as Weak Earnings Forecast Deepens Doubts over Growth

Netflix posted record second-quarter revenue of $12.56bn, up 13%, with earnings of $0.80 a share beating analyst estimates; however, shares fell 9% in after-hours trading.
The market reaction stemmed from Netflix's third-quarter guidance of $12.86bn in revenue, representing roughly 12% growth but falling short of the $13 billion Wall Street had modeled.
Narrowing full-year guidance to between $51 billion and $51.4 billion, Netflix acknowledged that a 12% forward pace would represent the slowest quarterly growth in approximately three years.
To sustain growth, the company intends to maintain its three-tiered content strategy while expecting advertising to generate about $3 billion this year, leveraging technology for more personalized experiences.
Operating margin declined slightly as free cash flow slipped to about $1.5bn from $2.3bn due to resumed content spending, though Netflix repurchased a record $4.7bn in shares this quarter.

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