Netflix Q3 2026 earnings beat estimates as shares fall after report
Netflix earned 87 cents a share on $12.87 billion in revenue, while investors assessed a lower ad forecast and $51.1 billion annual outlook.
By Hana Yoshida · Markets Reporter
2 min read
Netflix Q3 2026 earnings topped profit expectations, with the streaming company reporting 87 cents a share on revenue of $12.87 billion. Shares fell about 6% in extended trading Tuesday after the report, amid investor focus on Netflix's reduced advertising forecast and its full-year revenue outlook, CNBC reported.
Revenue matched the consensus estimate compiled by LSEG, while earnings exceeded the 82-cent expectation. Netflix's revenue rose nearly 12% from a year earlier, CNBC reported, as membership growth and pricing contributed to the increase.
What did Netflix report for the third quarter?
- Earnings per share: 87 cents, compared with 82 cents expected, according to CNBC.
- Revenue: $12.87 billion, in line with the $12.87 billion LSEG consensus estimate, CNBC reported.
- Net income: $3.66 billion, compared with $2.55 billion a year earlier. Netflix said the timing of expenses partly contributed to the profit increase, CNBC reported.
- Operating income: $4.46 billion, up 37.3% from a year earlier, with operating margin rising to 34.6% from 28.2%, according to DPA.
The results distinguish between the completed quarter and the outlook investors were assessing. Netflix beat the profit forecast, but revenue did not exceed estimates; it essentially met them.
Why are investors focused on Netflix's advertising outlook?
Netflix cut its forecast for 2026 advertising revenue to about $2.7 billion, from a prior target of roughly $3 billion. The company said some advertising-product capabilities had taken longer than expected to roll out, CNBC reported.
Co-chief executive Greg Peters said on the earnings call that Netflix was behind its aggressive advertising target for the year. The company has used a lower-priced, ad-supported plan as part of its effort to expand revenue beyond subscriptions.
Netflix also narrowed its full-year revenue forecast to $51.1 billion, or 13% growth from 2025. That is at the bottom of the company's prior $51 billion-to-$51.4 billion range and below the $51.2 billion Wall Street expectation cited by CNBC.
What is Netflix forecasting next?
For the fourth quarter, Netflix forecast revenue of $13.44 billion, more than 11% above a year earlier. It said membership growth, pricing and advertising would drive that increase, CNBC reported.
Netflix acknowledged investor concern about the growth of viewing hours but said engagement remained healthy. Earlier reporting by Reuters said viewing hours increased 2% in the first half of 2026, compared with 1.5% in the prior-year period.
The company recently cut about 6% of its workforce and said the reductions would reduce fourth-quarter operating margin by about 120 basis points. For readers tracking the after-hours move, stock prices change as buyers and sellers place orders; a price decline after earnings does not by itself establish a single cause.
This story draws on original reporting from CNBC.