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Whasington, Oktober 20, 2026 – Netflix enters its third quarter earnings season under mounting pressure, as investors grow uneasy over signs of weakening user engagement in its most mature market.
While international growth remains steady, the U.S. picture is increasingly clouded by rising churn, declining downloads, and shrinking daily viewing time.
Data shows churn in the U.S. surged 16.6 percent year-over-year in the third quarter, marking the steepest increase in seven consecutive quarters of rising cancellations.
Downloads in the U.S. and Canada fell 20 percent to 7.4 million, underscoring waning momentum.
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Average daily usage slipped to 73.2 minutes per user, down from 77 minutes earlier this year.
Younger viewers, once a core demographic, are spending just under an hour a day on the platform, a sharp drop from last year’s levels.
International markets, however, tell a different story. In Europe, churn declined by 2 percent, while Asia Pacific downloads rose 10 percent to 19.5 million.
Globally, downloads edged up 1 percent, suggesting overseas growth is helping offset domestic softness.
Analysts note that Netflix’s ability to sustain international expansion may prove critical as U.S. engagement falters.
Financially, Netflix projects third-quarter revenue of $12.86 billion, an 11.7 percent increase from a year earlier, with an operating margin of 33.2 percent.
The company leaned on a stronger content slate, with returning shows boasting 1.3 billion prior season viewing hours compared to 765 million in the previous quarter.
Yet despite richer offerings, U.S. engagement metrics remain underwhelming, raising questions about whether pricing changes or shifting consumer habits are eroding loyalty.
Wall Street sentiment reflects the divide. Wells Fargo downgraded Netflix to underweight in September, citing “weakening user engagement,” while HSBC issued a hold rating, warning that a near-term recovery looks unlikely.
Wolfe Research took a more optimistic view, arguing that Q2 softness was tied to the release calendar and that Q3’s lineup should have delivered better results.
The broader challenge lies in market saturation and intensifying competition.
Rivals such as Disney+, Amazon Prime Video, and YouTube continue to capture younger audiences, leaving Netflix to confront an engagement paradox despite investing heavily in content and AI driven personalization, its U.S. users are spending less time on the platform.
As the company prepares to release its earnings, investors will be watching closely to see whether international resilience can outweigh domestic weakness or if the cracks in its U.S. foundation signal deeper trouble ahead.
