Netflix Beats Earnings but Slashes Ad Forecast — Stock Tumbles After Hours

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Netflix made more money than Wall Street expected last quarter — but investors cared more about where growth is heading, and the streaming giant's stock slipped after hours on Tuesday.

The company reported third-quarter revenue of $12.87 billion, up about 12% from a year earlier and in line with forecasts. Earnings per share came in at $0.87, beating the $0.82 analysts expected, while net income surged 44% to $3.66 billion. Operating margin widened to an impressive 34.6% from 28.2% a year ago.

But Netflix cut its 2026 advertising revenue forecast to about $2.7 billion from roughly $3 billion, citing a slower-than-expected rollout of its ad products. Its fourth-quarter outlook also disappointed, sending shares down around 4–6% in after-hours trading.

The company said it plans to bring its ad-supported plan to 15 additional countries in 2027. With subscriber growth steady and churn improving, the ad business is now the number investors are watching most closely.

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