Netflix Beats Q3 EPS at $0.87, Guides Q4 Below Estimates

Netflix (NFLX) reported third-quarter earnings of $0.87 a share, $0.05 above the FactSet consensus of $0.82, on revenue of $12.87 billion, up 11.9% from a year earlier per the wire summary and in line with the consensus of $12.87 billion. The beat was overshadowed by guidance. Netflix sees fourth-quarter EPS of $0.67 against $0.73 expected and revenue of $13.44 billion against $13.52 billion, and it sees 2026 revenue of $51.1 billion against $51.21 billion. Figures come from the wire summary and from reports on the Netflix Q3 2026 shareholder letter.

Q3 results versus expectations

Operating income rose about 37% and net income about 44% from a year earlier, by our calculation from the reported figures. Reports on the shareholder letter say Netflix's own forecast was a 33.2% operating margin and attribute the higher result mainly to the timing of expenses. That matters because timing shifts costs between quarters rather than removing them, and the Q4 margin guidance below reflects it. Revenue growth was about 11% on a currency-neutral basis, according to the same reports.

Guidance: Q4 and 2026 land below consensus

By our calculation, the Q4 EPS guide is about 8% below consensus, while the revenue guides are less than 1% below. Q4 revenue of $13.44 billion would be up about 11.5% from a year earlier, according to reports on the letter, and the Q4 margin includes about 1.2 percentage points of costs from recently announced headcount reductions. Reports also say Netflix expects free cash flow of about $12.0 billion for 2026, down from about $12.5 billion, mainly because of a real estate transaction expected to close in Q4.

Advertising outlook trimmed

Netflix now expects about $2.7 billion of advertising revenue in 2026, down from about $3 billion in July, by reports of the letter, which cite a slightly slower rollout of some ad product capabilities. The same letter says subscription revenue growth has outperformed its expectations and that its 2026 price increases, including in the US, drew a response consistent with past changes. Netflix plans to launch its ad-supported plan in 15 more countries in 2027, starting in March with nine countries across Europe, the Middle East and Africa, plus Colombia, Peru and New Zealand. The letter also acknowledged some investor concern about view-hours growth, according to reports on it.

Buybacks and balance sheet

The buyback ran at an average of roughly $75 a share, by our calculation ($4.8 billion divided by 63.9 million shares), above the roughly $68.66 at which the stock was quoted in the wire headline. Netflix also said India revenue grew about 18% on a currency-neutral basis, with its largest quarter of paid net additions there, per the reports. For how rates and inflation are moving large-cap valuations, see our coverage of the 10-year Treasury yield.

Stock reaction

The wire headline quoted Netflix at $68.66, down $1.19, or about 1.7% by our calculation. Reports said shares fell about 4% in after-hours trading once the guidance was released, to roughly $66 a share. We could not verify extended-hours prices independently, so check live quotes.

Sources: Netflix Investor Relations: quarterly earnings and the Q3 2026 shareholder letter. Figures on the letter, consensus numbers and the stock quote come from the wire summary supplied for this article and secondary reports; we could not open the letter directly, so confirm against Netflix's filing.