Netflix beats third-quarter profit estimates but cuts its 2026 advertising revenue forecast

Netflix reported third-quarter net income of US$3.66 billion, or 87 US cents a share, after the US market closed on Tuesday 20 October, up from US$2.55 billion, or 59 cents, a year earlier. Analysts polled by LSEG had expected 82 cents a share, CNBC reported.

Revenue rose almost 12% from a year earlier to US$12.87 billion, in line with estimates. The company said growth came from more members and price rises that took effect in March, and that part of the profit increase was due to the timing of expenses.

Netflix lowered its 2026 advertising revenue forecast to about US$2.7 billion from about US$3 billion, citing a slower-than-expected rollout of some ad product features. It narrowed its full-year revenue forecast to US$51.1 billion, the low end of its earlier range of US$51 billion to US$51.4 billion, and forecast fourth-quarter revenue of US$13.44 billion.

“We are currently a bit behind our aggressive target for the year,” co-chief executive Greg Peters said of the ads business on the earnings call.

The company said job cuts announced last week would reduce its fourth-quarter operating margin by about 1.2 percentage points. Netflix shares fell almost 5% in midday trading on Wednesday 21 October, CNBC reported.

For background, see our report on the change of content chief.