Netflix Beats Q3 Earnings, Cuts Ad Forecast as Stock Slides

Netflix beat earnings expectations in the third quarter. The company reported earnings of $0.87 per share, above the $0.82 analysts had expected, according to LSEG data cited by CNBC.

Revenue was $12.87 billion, up about 12% from $11.51 billion a year earlier and roughly in line with estimates. Net income rose to $3.66 billion from $2.55 billion. Netflix said the increase partly reflected the timing of expenses.

Operating margin climbed to 34.6%, up from 28.2% in the same quarter last year.

The disappointment was advertising. Netflix now expects about $2.7 billion in 2026 ad revenue, down from the roughly $3 billion it had forecast, according to the company’s shareholder letter. It said some ad product features were rolling out slower than planned. The company also unveiled new advertiser tools on Tuesday aimed at improving audience targeting and measurement.

Guidance was soft. Netflix forecast fourth-quarter revenue of about $13.4 billion and narrowed its full-year 2026 revenue forecast to $51.1 billion — the low end of the $51 billion to $51.4 billion range it gave in July. Analysts had expected $51.2 billion, according to LSEG.

Last week’s job cuts will weigh on the fourth quarter. Netflix eliminated about 1,000 positions, which it said would shave about 1.2 percentage points off its fourth-quarter operating margin.

The quarter marked the company’s slowest revenue growth in three years. Netflix said hours viewed slowed and attributed the slowdown to this year’s subscription price increase. Subscription revenue, it said, was running ahead of expectations.

Netflix bought back a record $4.8 billion of its own stock during the quarter. It trimmed its free cash flow forecast to about $12 billion from $12.5 billion, citing a real estate deal expected to close this quarter.

Shares fell in extended trading. The stock closed the regular session at $68.69, down more than 25% this year.