Netflix Shares Slide 5.9% as Ad-Revenue Forecast Cut Overshadows Earnings Beat

3-line summary

• Netflix reported third-quarter EPS of $0.87, beating the $0.82 estimate, on revenue of $12.87 billion that matched expectations; fourth-quarter revenue guidance of $13.4 billion came in below the roughly $13.51 billion analyst consensus, and the company cut its full-year 2026 advertising revenue outlook to about $2.7 billion from about $3 billion, citing a slower-than-expected rollout of ad-product features.
• Shares fell 5.9% in after-hours trading to $64.64, near the stock's 52-week low of $65.08 and down about 25% year-to-date; the guidance miss and ad-revenue cut came against a backdrop of internal turmoil, including roughly 1,000 job cuts (about 6% of staff), the replacement of content chief Bela Bajaria with Peter Rice, and the departure of film division head Dan Lin.
• The company also faces competitive pressure from YouTube, a weaker content slate than a year earlier, and recent analyst downgrades; in its shareholder letter, Netflix acknowledged "some investor concern about our view hours growth."

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