Netflix stock faces ad growth test after Q3 profit beat

Netflix reported its third-quarter results on Tuesday, October 20, for the period ended September 30. Earnings per share reached USD 0.87, ahead of the USD 0.82 consensus, while revenue rose 11.8 percent year over year to USD 12.87 billion and matched the analyst estimate. CNBC reported the figures and the company outlook.

Profit beat meets slower ad rollout

Net income rose to USD 3.66 billion from USD 2.55 billion a year earlier. Netflix said the year-over-year increase was partly influenced by the timing of expenses. Revenue growth was supported by membership gains and subscription price increases introduced in March, with advertising also contributing.

The main setback came from the advertising business. Netflix now expects 2026 advertising revenue of about USD 2.7 billion, down from its earlier forecast of roughly USD 3 billion. The company attributed the reduction to a slower-than-expected rollout of some advertising product capabilities. Co-CEO Greg Peters said the business was still growing strongly but was behind its aggressive target for the year.

Guidance puts execution in focus

Netflix expects fourth-quarter revenue of USD 13.44 billion, representing growth of more than 11 percent and reflecting contributions from memberships, pricing and advertising. The company narrowed its 2026 revenue forecast to USD 51.1 billion, the low end of its previous USD 51.0 billion to USD 51.4 billion range and below the USD 51.2 billion analyst expectation cited by CNBC.

Management also acknowledged investor concerns about view-hour growth. Its response is built around improving entertainment value for members, using technology across the service and increasing monetization. The company said engagement remains healthy, but sustained viewing growth is important for pricing power and the advertising proposition.

Netflix is also reducing its workforce by about 6 percent, or roughly 1,000 positions. The company expects those cuts to reduce fourth-quarter operating margin by about 120 basis points. Former Disney executive Peter Rice has been selected as chief content officer after Bela Bajaria left the role, adding an organizational transition to the operating agenda.

Netflix stock remains tied to delivery

Netflix stock traded at EUR 57.27 on Lang & Schwarz at 13:18 CET on Wednesday, November 4. The quote reflects the current European trading venue and is not paired here with a dated Xetra close. Investors are likely to focus on whether Netflix can convert its large audience into faster advertising monetization while maintaining subscription momentum.

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More news and analyses on Netflix stock will follow as the company reports on advertising execution, viewing trends and its next earnings outlook.