Netflix shares fell nearly 6% in after-hours trading on Tuesday, 20 October 2026, after the streaming giant cut its advertising revenue forecast for the year, gave a weaker-than-expected outlook for the fourth quarter and announced a shake-up of its content leadership.
The results
| Measure (Q3 2026) | Result |
|---|---|
| Revenue | $12.87 billion, up 11.8% (slowest growth in nearly three years) |
| Earnings per share | $0.87, vs $0.82 expected (LSEG) |
| Operating income | $4.46 billion, up 37%; 34.6% margin |
| Net income | $3.66 billion, up 44% |
| Share buybacks | A record $4.8 billion |
| Guidance | Figure |
|---|---|
| Q4 revenue | $13.44 billion |
| Q4 earnings per share | $0.67, vs $0.73 expected |
| 2026 revenue | $51.1 billion |
| 2026 ad revenue | About $2.7 billion, cut from about $3 billion |
| 2026 free cash flow | About $12 billion, down from $12.5 billion |
Figures are from Netflix's shareholder letter (via StockTitan) and Reuters.
Advertising falls short
Advertising was supposed to be Netflix's next big growth engine, through its cheaper ad-supported plans. But the company said some ad products are rolling out more slowly than expected, so it now expects about $2.7 billion in ad revenue this year rather than the roughly $3 billion it had hoped for.
New content chief after layoffs
Netflix said Chief Creative Officer Bela Bajaria is being replaced by Peter Rice, a former senior executive at Disney and Fox. Rice will also oversee films until a successor is found for departing film chief Dan Lin, according to Reuters. The changes follow the layoff of about 1,000 employees, roughly 6% of staff, the week before the results.
"I know that we could do better," co-CEO Ted Sarandos said, adding: "We do need better execution in the US."
Worries about US subscribers
Netflix no longer reports subscriber numbers every quarter. Data from the research firm Antenna suggests it has lost US subscribers every month of 2026 through September, according to Reuters. Netflix called that data "not representative". Analyst Paolo Pescatore of PP Foresight said the company was "focused on too many unwanted distractions."
The stock fell to about $64.66 after hours, having already lost more than 40% over the past year.
What happens next
Investors will watch whether Rice can strengthen Netflix's slate, and whether the ad business picks up in 2027. The company's fourth quarter is usually boosted by big holiday releases, but its guidance suggests profits will dip from the third quarter.
This article is for information only and is not investment advice.
