Netflix Q3 profit beats estimates but ad revenue outlook cut to $2.7B

Netflix reported third-quarter 2026 revenue of 12.874 billion dollars on October 20, up 11.8 percent year over year and roughly in line with the LSEG consensus of 12.87 billion dollars, according to techm.kr. Earnings per share came in at 87 cents, beating the market expectation of 82 cents.

Operating income for the quarter was 4.459 billion dollars, up 37.3 percent, and the operating margin rose from 28.2 percent to 34.6 percent. Net income reached 3.664 billion dollars, up 43.9 percent from 2.547 billion dollars a year earlier.

Revenue in Latin America grew 16.9 percent and in Asia-Pacific 12.3 percent year over year.

The company lowered its full-year advertising revenue outlook to about 2.7 billion dollars from about 3.0 billion dollars, a 10 percent cut, citing delays in launching some ad products and related technology. Netflix guided fourth-quarter revenue at 13.442 billion dollars, up 11.5 percent year over year, with operating income of 3.5 billion dollars and a 26.0 percent operating margin.

Fourth-quarter net income guidance was 2.787 billion dollars and EPS guidance 67 cents, below the Wall Street estimate of 73 cents. Netflix shares closed at 68.69 dollars, down 1.7 percent, and fell to around 64 dollars in after-hours trading following the results.

The company said subscriber response to this year's price increase has been similar to past increases and in line with company expectations. Netflix had previously announced it would cut about 1,000 jobs, roughly 6 percent of its workforce, a move expected to weigh on short-term profitability; in the fourth quarter of last year, revenue grew 17.6 percent year over year.