Earnings
Netflix beat Wall Street, so why did the stock keep falling?
By the newsroom · · 1 min read · ▶ 1:01
The essentials
- Netflix reported diluted earnings per share of $0.87 for the third quarter, up from $0.59 a year earlier.[1]
- The company bought back 63.9 million of its own shares for $4.8 billion, its largest quarter ever of stock repurchases.[1]
- Netflix now expects about $2.7 billion in 2026 ad revenue, versus approximately $3 billion previously.[1]
- The shares closed Tuesday at $68.69 and continued to tumble in after-hours trading, reaching a new 52-week low.[2]
What happened
Netflix posted a third-quarter profit of $3.664 billion and earnings per share of 87 cents.[2] Revenue of $12.87 billion, up 12% from a year earlier, matched the Street estimate.[3] The shares tumbled after hours as the company lowered its full-year advertising guidance and issued a revenue outlook that disappointed Wall Street.[3] The new full-year revenue forecast is slightly below the analysts' consensus.[3] Netflix said the ad revenue cut came from a slightly slower than expected rollout of some ad product capabilities.[1][3] The results came after the recent layoff of about 1,000 workers.[3]
Free newsletter
The market stories that matter. Sourced, no hype.
What the video doesn't say
The company also lowered its expected 2026 free cash flow to approximately $12.0 billion, from a prior projection of $12.5 billion.[1] Among the executives pushed out was content chief Bela Bajaria.[3] In its letter, Netflix wrote: "We know there's some investor concern about our view hours growth."[3] The service counts 325 million subscribers worldwide, according to Deadline.[3] Netflix shares finished the regular session down $1.16 before falling further after hours.[4]
What's next?
For the fourth quarter, Netflix expects revenue of $13.4 billion, up 12% from a year earlier.[1]
Sources
- 1Documentsec.gov
- 2Netflix Beats Q3 Earnings Estimates But Braces Wall Street for 2026 Ad Sales WhiffThe Hollywood Reporter · October 20, 2026
- 3Netflix Q3 2026 Earnings: Stock Drops Again On Lowered GuidanceDeadline · October 20, 2026
- 4Netflix (NFLX) Q3 2026 earnings results beat EPS expectations, revenue in-line with estimatesShacknews · October 20, 2026
Photos: Kstanhope of Netflix (CC BY-SA 4.0), Coolcaesar (CC BY-SA 4.0), Donald Trung Quoc Don (CC BY-SA 4.0), Coolcaesar (CC BY-SA 4.0), Coolcaesar at English Wikipedia (CC BY-SA 3.0), Rafi B. from Somewhere in Texas :) (CC BY 2.0), Flickr Stock Catalog (CC BY 2.0), Donald Trung Quoc Don (CC BY-SA 4.0), Sry85 (CC BY-SA 4.0), ajay_suresh (CC BY 2.0), Tom Woodward from Richmond, VA, US (CC BY-SA 2.0). Cropped.
Free newsletter
The market stories that matter. Sourced, no hype.