Netflix posts third-quarter earnings beat, but shares fall on advertising and revenue guidance — SkimNews
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- Netflix reported Q3 EPS of 87 cents vs. an 82-cent estimate and $12.87B in revenue (in line), with net income of $3.66B up from $2.55B a year ago, boosted by membership growth and March subscription price hikes.
- Netflix shares fell about 6% in extended trading despite the EPS beat, as the company narrowed its 2026 full-year revenue forecast to $51.1B (13% YoY) — below Wall Street's $51.2B estimate.
- Netflix's ad business saw its 2026 revenue guide cut to ~$2.7B from a prior ~$3B, with co-CEO Greg Peters conceding the ad-stack build-out is "a bit behind" its "aggressive" yearly targets.
- Bela Bajaria is departing as Chief Content Officer alongside last week's ~6% workforce layoff (~1,000 workers); ex-Disney executive Peter Rice has been tapped as the new CCO.
- Netflix said the layoffs will drag Q4 operating margin by approximately 120 basis points.
- Earlier Tuesday, Netflix rolled out new advertiser features to help brands target audiences and measure ad impact, as it works to accelerate the ad tier's monetization.
Why it matters: Netflix's 6% after-hours drop on an EPS beat reveals investor focus has shifted to the $300M cut in 2026 ad revenue guidance and a $51.1B full-year forecast that came in below Wall Street's $51.2B expectation. The simultaneous CCO exit and 1,000-person layoff — a 120 bps Q4 margin drag — add concrete execution variables for incoming CCO Peter Rice and the ad tier's growth trajectory.
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