Key takeaways:
- Netflix reported quarterly earnings of $0.87 per share, beating analyst estimates.
- Revenue rose nearly 12% to $12.87 billion during the third quarter.
- Netflix cut its 2026 advertising revenue forecast to $2.7 billion.
The Netflix profit rise in the third quarter ended September 30, 2026, beat earnings estimates as revenue increased with membership growth and subscription price increases. However, the streaming company lowered its full-year advertising revenue forecast and set its annual revenue outlook near the lower end of its earlier range. Its shares fell about 6% in extended trading on Tuesday.
Profit growth and revenue outlook
Netflix reported earnings of $0.87 per share, above analysts’ estimate of $0.82. Revenue reached $12.87 billion, matching expectations and rising nearly 12% from the same quarter last year.
Net income increased to $3.66 billion from $2.55 billion a year earlier. Earnings per share also rose from $0.59 to $0.87. The company said the Netflix profit rise was partly due to the timing of expenses during the quarter.
Membership growth and subscription price increases introduced in March supported revenue. Netflix said customer responses to the higher prices were in line with its expectations and the pattern seen after earlier price changes.
For the fourth quarter, the company expects revenue to reach $13.44 billion, an increase of more than 11%. It expects membership growth, subscription pricing, and advertising revenue to support the rise.
Netflix also narrowed its full-year 2026 revenue forecast to $51.1 billion, representing 13% growth over 2025. The figure is near the lower end of its previous forecast of $51 billion to $51.4 billion and below the $51.2 billion analysts expected.
Beyond the Netflix profit rise, the company expects recent staff reductions to affect fourth-quarter operating margins by about 120 basis points. Last week, Netflix announced plans to cut about 1,000 jobs, representing roughly 6% of its workforce. Chief Content Officer Bela Bajaria is also leaving the role, with former Disney executive Peter Rice selected as her replacement.
Advertising revenue forecast falls
Netflix lowered its expected advertising revenue for 2026 to around $2.7 billion from its earlier forecast of approximately $3 billion. The company attributed the change to a slower-than-expected rollout of some advertising product features.
Co CEO Greg Peters said the advertising business had grown since its launch, but was behind its ambitious targets for the year. He also said the company expected further growth as it continued developing its advertising technology and products.
The company announced new features for advertisers on Tuesday. These tools are intended to help brands reach suitable audiences and measure the results of their campaigns.
Advertising is a growing part of Netflix’s business model, alongside paid memberships and subscription pricing. The lower forecast indicates that delays in product development can affect the pace at which a digital platform expands a new revenue stream.
Netflix also addressed investor concerns about viewing hours. The company said engagement remained healthy, pointing to the quantity, quality, and variety of content watched by members. It plans to increase viewing through stronger entertainment offerings, technology improvements, and better monetisation.
Competition for viewers remains a key business challenge, including from YouTube and other entertainment platforms. Netflix’s upcoming results will show whether membership growth, pricing, and improvements to advertising products can support its revenue targets while the company manages costs and develops its content strategy.
