Netflix shares, which as one of the best-performing stocks have soared 109 percent this year, fell almost 14 percent to $344.60 in after-hours trading.
The company called its performance in the second quarter "strong but not stellar". The stock is now down by over 13%, after it significantly missed subscriber targets.
Netflix is adding subscribers at a slower pace than envisioned, renewing fears that its growth may sputter as the video streaming service tries to fend off fiercer competition.
Membership in the quarter grew 5.2 million to a total of 130m, matching the same period past year but a million shy of what Netflix forecast, according to a letter released along with earnings figures.
Revenue: $3.91 billion. Analysts were expecting $3.94 billion.
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Well to many adding 4.47 million subscribers and hitting a new all-time high in subscribers sounds great to wall street they wanted to see a higher subscriber count. Earnings grew 32 percent from past year to $384 million, or 85 cents per share. Analysts were looking for 79.4 cents a share.
Netflix's explosive growth may be starting to plateau.
The Los Gatos, Calif., company added 670,000 subscribers in the USA and 4.47 million subscribers internationally - well short of the 6.2 million Wall Street expected.
"After handily blowing away Street expectations on subs the last few years this is a clear speed bump for Netflix as the global miss was most concerning given this is the linchpin to the core growth thesis for the coming years", he said in an email. Sixteen analysts surveyed by Zacks expected $3.94 billion. That erased roughly $25 billion from the company's market valuation.