Netflix Falls 6% After Q3 Beat as Ad Revenue Outlook Cut, 2026 Guidance Narrowed

Netflix (NFLX) shares fell 6% in after-hours trading Tuesday after the streaming giant beat profit estimates but cut its full-year advertising revenue forecast and narrowed its 2026 guidance range. Third-quarter revenue rose nearly 12% year over year to $12.87 billion, matching LSEG estimates, driven by subscriber growth and a subscription price increase that took effect in March. Net income was $3.66 billion, or 87 cents per share, versus $2.55 billion, or 59 cents, a year earlier — topping the 82-cent consensus, partly due to expense timing. The company now expects 2026 advertising revenue of about $2.7 billion, down from roughly $3 billion previously, citing slower-than-expected rollout of some ad product features. It narrowed its 2026 revenue outlook to $51.1 billion, 13% growth, at the low end of its prior $51 billion-$51.4 billion range and below the $51.2 billion LSEG estimate. Netflix, which announced roughly 6% job cuts — about 1,000 employees — last week, said severance will reduce fourth-quarter operating margin by about 120 basis points. It forecast fourth-quarter revenue of $13.44 billion, up more than 11%.