Netflix Beats Q3 Earnings Estimates But Braces Wall Street for 2026 Ad Sales Whiff

Netflix posted third quarter 2026 revenue of $12.9 billion on Tuesday, as well as a profit of $3.664 billion and earnings per share of 87 cents. The numbers beat everyone’s expectations — including Netflix’s — but they were not enough to immediately rally the company’s stock (NFLX) price.

The streamer had forecast for itself Q3 revenue of $12.860 billion, a profit of $3.452 billion, and earnings per share (EPS) of 82 cents. Wall Street expected revenue of $12.87 billion and agreed with the streamer’s own diluted earnings estimate.

As far as the fourth quarter goes, Netflix now forecasts $13.442 billion in revenue, $2.787 billion in net income and EPS of 67 cents. It will not be enough to fully salvage its full-year goals. (For example: Netflix now says it expects to post $2.7 billion in 2026 advertising revenue vs. its prior $3 billion forecast.)

Shares of the struggling NFLX stock closed Tuesday at $68.69 apiece; the streamer’s prior-quarter revenue was $12.56 billion and net income was $3.401 billion, which diluted to 80 cents per share.

Netflix’s engagement numbers have not been much to write home about recently. The company addressed that issue in its third quarter letter to shareholders.

“We know there’s some investor concern about our view hours growth. Member response to our 2026 price increases is consistent with prior price changes and our expectations, an indicator that our engagement — which encompasses quantity, quality and variety of viewing — remains healthy and that we continue to deliver strong value to members,” the relevant section reads. “But we do seek to accelerate growth in view hours as well, and we’re confident we’ll do that by relentlessly focusing and executing against the aforementioned strategy.”

Netflix’s top-performing content in the quarter (in the U.S. and Canada) included Death of the Pastor’s Wife (45 million views), The Idaho Murders: College Nightmare (38 million views), My Life With The Walter Boys season three (29 million views), Little House on the Prairie (29 million views), The Last House (91 million views) and Why Did I Get Married Again? (36 million views). In Europe, the Middle East, and Africa, The Gentlemen season two (33 million views) and A Toxic Love Story (43 million views) topped the streamer’s charts.

The big news on Netflix lately has been its layoffs. Roughly 6 percent of Netflix’s staff was let go (mostly) last week, which is the company’s (and calendar’s) fourth quarter. Among the high-profile casualties were chief content officer Bela Bajaria and film head Dan Lin.

The staff reduction, Netflix’s largest layoff in years, came after Netflix co-CEO Ted Sarandos had lamented at the Bloomberg Screentime summit on Sept. 30 that “overall, we’re not growing as fast as I want us to, and we’re working on making that move faster.”