Netflix Q3 earnings beat at 87 cents a share, but stock falls 6% on lower ad forecast

Netflix earned 87 cents a share in the third quarter, ahead of the 82 cents Wall Street expected, on revenue of $12.87 billion, exactly in line with forecasts. Its shares still fell about 6% in after-hours trading on Tuesday (early Wednesday in Pakistan), because the company cut its advertising forecast and landed at the low end of its own full-year revenue range, CNBC reported.

Netflix Q3 2026 earnings in numbers

• Earnings per share: 87 cents, against 82 cents expected (LSEG poll)
• Revenue: $12.87 billion (about Rs 3.56 trillion), up almost 12% on a year earlier
• Net income: $3.66 billion, up from $2.55 billion a year ago, helped partly by the timing of expenses
• Q4 revenue forecast: $13.44 billion, growth of more than 11%
• 2026 revenue forecast: narrowed to $51.1 billion, the bottom of the earlier $51 billion to $51.4 billion range and below the $51.2 billion analysts expected
• 2026 ad revenue forecast: cut to about $2.7 billion from roughly $3 billion

Rupee figures use today's dollar rate of about Rs 276.87.

Why the shares fell

The advertising cut did the damage. Co-CEO Greg Peters said on the earnings call that the ad business had grown fast but that Netflix is "currently a bit behind our aggressive target for the year", blaming a slower-than-planned rollout of some ad tools. The cheaper plan with ads is central to how Netflix plans to keep growing.

The company also said last week's layoffs of about 1,000 people, around 6% of staff, will cost it roughly 1.2 percentage points of operating margin in the fourth quarter.

The viewing slowdown, in Netflix's own words

For the first time, the company addressed the worry head on. "We know there's some investor concern about our view hours growth," its shareholder letter said, while insisting that engagement "remains healthy".

On the call, Peters and co-CEO Ted Sarandos accepted that softer viewing in the United States was behind the shake-up that removed chief content officer Bela Bajaria and film chief Dan Lin, Variety reported. Former Disney and Fox executive Peter Rice takes over as content chief next week. "We're focusing on that execution," Sarandos said, adding that Netflix needs more shows that become hits around the world, not just solid performers.

Peters pointed to churn, the rate at which subscribers leave, as the best proof that members still value the service: it improved in the US and globally even after this year's price rises. Outside the US, local shows carried the quarter. Netflix singled out India, where view hours grew 24% in the third quarter on the back of a strong slate.

What it means for subscribers in Pakistan

Nothing changes in your bill today. Netflix did not announce new prices for Pakistan, and its results do not mention the country. Two things are worth watching: the company says it wants to "improve monetization", which in past years has meant price rises and the crackdown on password sharing, and its push into South Asian titles, which is working in India, is the kind of slate Pakistani viewers also watch.

Current plans and prices, with tax, are in our guide to the Netflix price in Pakistan. For the shake-up behind these numbers, see Netflix fires film chief Dan Lin.