Netflix Q3 Revenue Rises 12% to $12.9B; Shares Fall 5% After Hours

Netflix shares fell about 5% in after-hours trading Tuesday, Oct. 20, after the streaming company reported third-quarter revenue of $12.87 billion, up 12% from a year earlier, and lowered its 2026 forecasts for advertising revenue and free cash flow. The stock traded at about $65.19 at 4:53 p.m. ET, down from its regular-session close of $68.69, according to Yahoo Finance data.

Operating income rose 37% to $4.46 billion, and the operating margin widened to 34.6% from 28.2%, Netflix said in its quarterly letter to shareholders, filed with the Securities and Exchange Commission after the 4 p.m. ET close. Diluted earnings per share were 87 cents, up 49% from 59 cents.

How did Netflix stock react to earnings?

It fell after the release. Netflix closed the regular session at $68.69, down 1.7% from Monday's close of $69.85, and slid to about $65.20 within minutes of the close, Yahoo Finance data show. Its five-minute readings ranged from about $65.09 to $66.57 between 4 p.m. and 4:50 p.m. ET. Netflix did not comment on the share move, and after-hours prices can change before Wednesday's open.

Netflix third-quarter 2026 results at a glance

Measure	Q3 2026	Q3 2025	Change
Revenue	$12.87 billion	$11.51 billion	+11.8%
Operating income	$4.46 billion	$3.25 billion	+37%
Operating margin	34.6%	28.2%	+6.4 pts
Net income	$3.66 billion	$2.55 billion	+44%
Diluted EPS	$0.87	$0.59	+49%
Free cash flow	$2.88 billion	$2.66 billion	+8%

Source: Netflix third-quarter 2026 letter to shareholders (Exhibit 99.1 to Form 8-K). Per-share figures reflect the 10-for-1 stock split effected Nov. 14, 2025.

Revenue was in line with Netflix's forecast, the company said. The margin beat the 33.2% it had projected in July, which Netflix attributed mainly to the timing of expenses and slightly higher revenue. Growth came mostly from subscriptions, as memberships and prices rose, along with higher ad revenue and a favorable currency effect. Churn improved from a year earlier and was better than forecast, globally and in the U.S., the company said.

By region, revenue in the U.S. and Canada rose 11% to $5.63 billion. Europe, the Middle East and Africa rose 11% to $4.11 billion, Latin America rose 17% to $1.60 billion and Asia-Pacific rose 12% to $1.54 billion.

What is Netflix's outlook for the fourth quarter and 2026?

Netflix expects fourth-quarter revenue of $13.44 billion, up 11.5%, and an operating margin of 26.0%, compared with 24.5% a year earlier. The Q4 margin includes about 120 basis points of negative impact from recently announced headcount reductions. It forecast Q4 diluted EPS of 67 cents, versus 56 cents a year earlier.

2026 outlook	Now	In July
Revenue	$51.1 billion	$51.0 billion to $51.4 billion
Operating margin	31.5%	31.5%
Ad revenue	About $2.7 billion	About $3 billion
Free cash flow	About $12.0 billion	About $12.5 billion

The full-year revenue forecast is 0.2% below the midpoint of its prior range. Netflix said subscription revenue has grown faster than expected, but ad revenue is lagging because some ad product features are rolling out more slowly than planned. It said the lower cash flow forecast reflects mainly a real estate transaction it expects to close in the fourth quarter.

How much stock did Netflix buy back?

Netflix repurchased 63.9 million shares for $4.8 billion in the third quarter, its largest quarterly buyback ever, and had $22.3 billion left under its authorizations. It ended the quarter with $15.3 billion of gross debt and $8.2 billion of cash and cash equivalents.

For more earnings news from Tuesday, see GM's third-quarter results and $20 billion buyback. For another big technology name, read about Meta's Muse Wonder AI models. Follow more earnings coverage in our companies section.