Netflix Beats Q3 Profit Estimates as Shares Drop 6% on Cut to 2026 Ad Revenue Guidance

Netflix reported third-quarter net income of $3.66B, or 87 cents per share, beating LSEG analyst estimates of 82 cents per share, while revenue rose nearly 12% year over year to match expectations at $12.87B. Shares fell about 6% in extended trading on Tuesday after the company lowered its 2026 ad revenue guidance to around $2.7B, down from its previous forecast of roughly $3B due to a slower-than-expected rollout of ad product capabilities. Netflix narrowed its full-year 2026 revenue forecast to $51.1B, coming in at the low end of its prior $51B to $51.4B guidance range and below Wall Street's $51.2B projection. The company projected fourth-quarter revenue will rise more than 11% to $13.44B, while noting that last week's layoffs of roughly 1,000 employees—about 6% of its workforce—and the departure of Chief Content Officer Bela Bajaria for incoming CCO Peter Rice will reduce fourth-quarter operating margin by about 120 basis points. "And, just note, I think that the buildout that we've been on is the fastest buildout of a comparable ad stack in our industry, but we are currently a bit behind our aggressive target for the year." — Greg Peters, Co-CEO of Netflix.