What Happened to Netflix, Inc. (NFLX) Stock?

Netflix (NFLX) stock has undergone a transformative period since early 2022, shifting from a growth-at-all-costs model to one focused on profitability and diversified revenue streams. The year 2022 marked a significant turning point when Netflix reported its first subscriber loss in over a decade during Q1, leading to a substantial plunge in its stock price. This event spurred the company to implement major strategic changes to re-ignite growth and investor confidence.

One of the most impactful changes was the introduction of a lower-priced, ad-supported subscription tier. Launched in November 2022 across 12 countries, including the U.S. at $6.99 per month, this tier aimed to attract budget-conscious consumers and open a new revenue stream through advertising. This move was initially met with skepticism but proved to be a crucial component of Netflix's recovery strategy. By August 2025, the ad-supported plan accounted for 45% of total household viewing hours in the United States, demonstrating its significant adoption.

Further bolstering its financial health, Netflix initiated a global crackdown on password sharing, beginning in the U.S. in May 2023. While initially controversial, this strategy quickly yielded positive results. In Q2 2023, following the initial rollout, Netflix added 5.9 million new paid customers, surpassing expectations. By Q3 2023, the company reported a surge of 9 million new global subscribers, with the ad-supported plan's membership increasing by 70% quarter-over-quarter, indicating successful conversion of former 'borrowers' into paying subscribers. This strategic pivot led to a remarkable stock recovery, with NFLX returning 84.5% in 2024.

In 2025, Netflix continued its strong performance, reporting $45.18 billion in revenue and reaching approximately 325 million subscribers globally. The stock hit an all-time high of $133.91 on June 30, 2025. Entering 2026, Netflix reported robust Q1 earnings on April 16, 2026, with an EPS of $1.23 (beating estimates of $0.76) and revenue of $12.25 billion (up 16% year-over-year). However, the stock experienced a ~9-10% dip following the announcement, primarily due to cautious Q2 revenue guidance and the news that co-founder Reed Hastings would step down as chairman in June 2026. Despite this, Netflix maintained its full-year 2026 guidance for 12-14% revenue growth and a 31.5% operating margin, projecting its advertising business to roughly double to about $3 billion. As of May 5, 2026, Netflix's market capitalization is approximately $383.27 billion, reflecting its position as a dominant force in the evolving streaming landscape.