Netflix posts third-quarter earnings beat, but shares fall on advertising and revenue guidance
The company reported quarterly earnings above analyst expectations while lowering its 2026 advertising forecast and issuing a weaker-than-expected fourth-quarter profit outlook.
TL;DR
- Netflix reported third-quarter earnings per share of $0.87, above the $0.82 analyst average cited by Reuters.
- The company lowered its 2026 advertising revenue forecast to about $2.7 billion from roughly $3 billion, citing a slower rollout of some ad capabilities.
- Netflix also issued a weaker-than-expected fourth-quarter profit outlook, and its shares fell after the report.
Netflix reported third-quarter earnings per share of $0.87, ahead of the $0.82 average estimate cited by Reuters. The company said subscription revenue growth exceeded its expectations, according to its shareholder letter. [1] [2] [3]
The letter projected 2026 advertising revenue of about $2.7 billion, down from the company's earlier estimate of approximately $3 billion. Netflix attributed the reduction to a somewhat slower-than-expected rollout of some advertising product capabilities. [2] [3]
Reuters reported a weaker-than-expected fourth-quarter profit forecast, and CNBC reported that the shares fell as investors weighed the advertising and revenue outlook. The market reaction is a reported price response, not evidence by itself about the company's long-term performance. [1] [2]
The unresolved issue is whether advertising products and subscriber growth will develop in line with the company's later guidance. The cited materials establish management's current forecast and its stated explanation, but not whether those expectations will be met. [1] [2] [3]
Why it matters
The results show a split between reported earnings strength and a lower advertising forecast, a segment Netflix has identified as a growth area. The company's own explanation points to rollout timing; subsequent results will show whether that is the main constraint.
Editor's note
First-pass edition. Market movement is reported descriptively; no investment recommendation or price target is included.