Netflix Revenue Rises 12 Percent to $12.87 Billion as Margins Expand

Netflix earnings revenue for the third quarter of 2026 came in at $12.87 billion, up 11.9 percent from a year earlier, the company reported after the market closed on 20 October 2026. Diluted earnings were $0.87 a share, against $0.82 expected, and the operating margin expanded to 34.6 percent from 28.2 percent a year earlier. Net income was $3.664 billion. The revenue figure matched the company’s own forecast of $12.86 billion, while the margin topped its projection of 33.2 percent. For the fourth quarter, Netflix forecast revenue of $13.44 billion and a 26.0 percent operating margin.

The company cut its 2026 advertising revenue outlook to about $2.7 billion from roughly $3 billion, and pushed the expansion of its advertising-supported tier to 15 new countries back to 2027. It replaced its 2026 revenue range with $51.1 billion and kept its 31.5 percent margin target for the year. The advertising business, which the company had hoped would grow faster, was therefore a smaller contributor than expected, even as the core subscription business continued to grow. Netflix no longer reports subscriber counts, so revenue and operating margin now carry the story for investors.

Why Netflix earnings revenue beat did not lift the shares

Despite beating profit forecasts, Netflix shares fell about 6 percent in after-hours trading, to $64.84 from a close of $68.69, and the stock recorded its fifth straight post-report decline. Investors focused on the weaker advertising outlook and on fourth-quarter earnings guidance of $0.67 a share, below the $0.73 consensus. The reaction showed that a company can beat on the quarter just ended and still disappoint if its outlook for the next quarter is softer than expected. The shares had already fallen in the four previous quarters after results, with declines of 10.1 percent, 2.2 percent, 9.7 percent and 7.3 percent.

For viewers, the results matter mainly through what they say about the company’s spending on programmes and its pricing. A higher operating margin gives Netflix more room to invest in new shows and films, but the slower advertising growth suggests that the company will lean more on subscription revenue. The fourth-quarter forecast of $13.44 billion in revenue, up 11.5 percent, will be the next test of whether the company can keep growing while holding its margin near the 26 percent it has guided for the final quarter of the year.

Source: AI Stock Wire