Netflix beat revenue and earnings estimates in a solid third quarter, however the share price dropped after hours as the company issued a lower advertising revenue projection for the year.
Revenue narrowly beat Wall Street estimates, increasing by 11.8% year-on-year to reach $12.9bn for the period against the company’s $12.8bn forecast. Executives attributed the gain primarily to subscription price hikes and membership growth, and an increase in advertising revenue. Revenue forecast for Q4 is $13.4bn.
Profit for the quarter reached $3.7bn, up from $3.4bn in Q2. Operating income gained 37% year-on-year to reach $4.5bn, and operating margin of 34.6% climbed against 28.2% from the year-ago period.
Earnings per share for the quarter were $0.87 and beat analysts’ estimates, marking a 49% increase year-on-year from $0.59.
Netflix adjusted its 2026 advertising revenue forecast from around $3bn to $2.7bn “due to slightly slower than expected rollout of some ad product capabilities”. Full-year revenue is targeting $51.1bn, which would represent growth of 13% year-on-year.
The streamer has endured a torrid seven days after announcing it was laying off 6% of its global workforce or around 1,000 staffers, and firing chief content officer Bela Bajaria and film head Dan Lin. Former Disney and Fox executive Peter Rice officially steps into the role of chief content officer on Monday (October 16).
This year’s story has been tumultuous, with slow engagement growth in the first half of the year, a failed bid to acquire the Warner Bros studios, and a share price that has dropped around 44% in the last 12 months.
The remaining 2026 feature slate brings Los Javis’ Spanish Oscar submission La Bola Negra, which just began its exclusive 47-day North American theatrical release; David Fincher’s The Further Mis-Adventures Of Cliff Booth starring Brad Pitt based on a Quentin Tarantino screenplay; the action comedy Bad Day with Cameron Diaz; animated features Ray Gunn and Steps; and Lee Chang-dong’s South Korean Oscar hopeful Possible Love.
Anticipated TV highlights include the limited series The Murder Of JonBenét Ramsey with Melissa McCarthy and Clive Owen, the fourth season of The Diplomat, new seasons of Nobody Wants This and Lupin, the series finale of Emily In Paris, three NFL American Football games on Thanksgiving Eve – U2 will perform the halftime show – and Christmas Day, and the Tyson Fury vs. Anthony Joshua boxing match.
Stock closed at $68.69.
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