Netflix Q3 2026 results: $12.9bn revenue, ad forecast cut to $2.7bn, shares fall 6%
Netflix beat profit forecasts with revenue of $12.87 billion and a record $4.8 billion buyback, but cut its 2026 advertising forecast and trimmed full-year guidance, sending shares down about 6%.
At a glance
- Netflix reported third-quarter 2026 revenue of $12.87 billion, up 11.8% and in line with forecasts, and earnings of 87 cents a share against about 82 cents expected.
- Operating margin jumped to 34.6% from 28.2% a year earlier; net income rose to $3.66 billion.
- The company cut its 2026 advertising revenue forecast to about $2.7 billion from about $3 billion, blaming a slower rollout of new ad tools.
- Full-year revenue guidance was trimmed to $51.1 billion; Q4 guidance is $13.4 billion, with job cuts weighing on margins.
- Shares fell about 6% after the results despite a record $4.8 billion share buyback in the quarter.
Netflix reported third-quarter 2026 revenue of $12.87 billion, up 11.8% from a year earlier, and beat profit forecasts, but its shares fell about 6% after the company cut its 2026 advertising forecast to about $2.7 billion and trimmed its full-year revenue outlook. The results, released after the US market close on Tuesday, October 20, also showed a record $4.8 billion share buyback and a sharp rise in margins.
The numbers
| Measure | Q3 2026 | Comparison |
|---|---|---|
| Revenue | $12.87 billion | +11.8%; in line with forecasts of about $12.87bn |
| Operating income | ≈$4.5 billion | +37% |
| Operating margin | 34.6% | 28.2% a year earlier |
| Net income | $3.66 billion | $2.55 billion a year earlier |
| Diluted EPS | $0.87 | $0.59 a year earlier; forecast about $0.82 |
| Free cash flow | $2.9 billion | $2.7 billion a year earlier |
| Share buyback | $4.8 billion (63.9m shares) | Largest quarter ever |
Revenue by region
| Region | Q3 revenue | Growth |
|---|---|---|
| US and Canada | $5.63 billion | +11% |
| Europe, Middle East and Africa | $4.11 billion | +11% |
| Latin America | $1.60 billion | +17% |
| Asia-Pacific | $1.54 billion | +12% (+15% at constant currency) |
The advertising cut
Netflix now expects about $2.7 billion in advertising revenue this year, down from roughly $3 billion, citing a "slightly slower than expected rollout of some ad product capabilities". Co-chief executive Greg Peters said there had been delays in partner integrations for new ad products and that the business was "a bit behind our aggressive target", while stressing that ad revenue is still growing by more than 80% this year.
Higher subscription revenue made up most of the roughly $300 million gap, but the company still lowered its full-year 2026 revenue forecast to $51.1 billion, slightly below the midpoint of its previous range.
Guidance
| Period | Revenue | Operating margin | EPS |
|---|---|---|---|
| Q4 2026 | $13.4 billion (+12%) | 26.0% | $0.67 |
| Full year 2026 | $51.1 billion (+13%) | 31.5% | — |
Netflix said job cuts would reduce fourth-quarter margins by about 1.2 percentage points. It also lowered its free cash flow forecast to about $12 billion from $12.5 billion, because of a real estate deal expected to close in the fourth quarter. Chief financial officer Spence Neumann said it was "premature" to give 2027 guidance.
Background: content and growth
Netflix's biggest titles of the quarter included the series The Last House, with 91 million views, and the documentary Facing El Chapo. Viewing hours in India rose 24% from a year earlier, helped by a strong local slate led by the reality show Lock Upp — a sign of how important South Asia has become for the company. Co-CEO Ted Sarandos admitted that growth in the United States is not as fast as Netflix would like.
The company also signed a new licensing deal with Disney and a partnership with French broadcaster TF1. Its fourth-quarter line-up includes the Emily in Paris finale, an NFL game on Thanksgiving Eve and the Tyson Fury vs Anthony Joshua boxing fight.
Why it matters
Netflix is the world's largest paid streaming service, and its advertising tier — cheaper plans paid for partly by ads — is central to its plans to keep growing as subscriber growth slows in mature markets. A cut to the ad forecast suggests building an advertising business at global scale is harder than expected, even as profit margins hit records. The weaker share price also follows a fall after the second-quarter results in July.
What happens next
Netflix will launch its ad-supported plan in 15 more countries in 2027, with 12 of them — including nine in Europe, the Middle East and Africa, plus Colombia, Peru and New Zealand — starting in March 2027. The company reports fourth-quarter results in January 2027, when it is expected to give its first full-year 2027 forecast.
Questions people are asking
How much revenue did Netflix make in Q3 2026?
Netflix reported revenue of $12.87 billion for the July–September 2026 quarter, up 11.8% from a year earlier, with diluted earnings of 87 cents a share and operating income of about $4.5 billion.
Why did Netflix stock fall after Q3 2026 earnings?
Shares fell about 6% because Netflix cut its 2026 advertising revenue forecast to about $2.7 billion from $3 billion, trimmed its full-year revenue guidance to $51.1 billion and gave a fourth-quarter outlook that disappointed some investors.
Where will Netflix launch its ad plan next?
Netflix plans to launch its ad-supported tier in 15 more countries in 2027, with 12 of them — including nine in Europe, the Middle East and Africa plus Colombia, Peru and New Zealand — starting in March 2027.
