Netflix Q3 revenue hits $12.87B, ad forecast cut to $2.7B

Netflix reported third-quarter revenue of $12.87 billion on October 20, 2026, up 12% from a year earlier. The bigger news was in advertising. Netflix cut its 2026 ad revenue forecast to about $2.7 billion from about $3 billion, blaming a slower rollout of its own ad technology.

The Q3 2026 numbers

Revenue matched both the company's forecast and analyst estimates, according to Netflix's shareholder letter and Yahoo Finance. Profit came in higher, mainly because some spending landed later than planned, the letter says.

Measure	Q3 2026	Q3 2025
Revenue	$12.87 billion (+12%)	$11.51 billion
Operating income	$4.46 billion (+37%)	$3.25 billion
Operating margin	34.6%	28.2%
Net income	$3.66 billion	$2.55 billion
Earnings per share	$0.87 (analysts expected $0.82)	$0.59
Free cash flow	$2.88 billion	$2.66 billion

Operating margin is the share of revenue left after running the business. Free cash flow is the cash left after spending on content and equipment.

Netflix also bought back 63.9 million of its own shares for $4.8 billion in the quarter. The letter calls that its largest quarter of buybacks ever.

Why the ad forecast fell

Netflix now expects about $2.7 billion in ad revenue for 2026. It blames "slightly slower than expected rollout of some ad product capabilities." The letter does not say which features were late.

It does describe what is shipping. Netflix's Ad Suite, its in-house system for selling ads, now offers automated buying through connected-TV marketplace deals worldwide. It added MercadoLibre in Latin America and AdForm in Europe as partners. Measurement of reach, frequency and attribution inside ad buyers' own platforms is also expanding.

The cheaper ad-supported plan will launch in 15 more countries in 2027. The first group arrives in March 2027: nine countries in Europe, the Middle East and Africa, plus Colombia, Peru and New Zealand.

The forecast for Q4 and 2026

Netflix expects fourth-quarter revenue of $13.44 billion. Analysts had expected $13.51 billion, Yahoo Finance reports, and the shares fell about 5% after hours. They were already down about 25% this year.

Forecast	Figure
Q4 revenue	$13.44 billion
Q4 operating margin	26.0% (24.5% a year earlier)
Q4 earnings per share	$0.67
2026 revenue	$51.1 billion, up 13%
2026 operating margin	31.5%
2026 free cash flow	About $12.0 billion, down from $12.5 billion

The lower cash forecast reflects a real estate deal Netflix expects to close in the fourth quarter, the letter says.

The cost of last week's job cuts

Netflix cut about 1,000 jobs, mostly in product and technology, the week before the results. Yahoo Finance puts that at about 6% of staff. The letter says those cuts take about 1.2 percentage points off fourth-quarter operating margin and 0.3 points off the full year. It did not give severance costs or savings.

Yahoo Finance also reports that Peter Rice, a former Disney executive, replaces Bela Bajaria as chief content officer. "Our engagement is solid, and it will allow us to continue to grow as we have for the last several years," co-CEO Greg Peters said of the US market.

What this means for developers

Netflix's ad business is running behind its own plan, and that changes the picture for teams that buy or build around it.

• Ad buyers, check what is live in your platform. Netflix's own words point to features rolling out late. Confirm reach and attribution data is available in your buying tool before you commit budget.
• Plan for the March 2027 markets now. Twelve countries get the ad plan in that first wave. Teams running connected-TV campaigns there can line up budgets and measurement partners early.
• Ad tech vendors, note the partners. MercadoLibre and AdForm joined in their regions. Netflix is widening third-party access rather than keeping buying in-house.
• Expect fewer product changes for a while. The job cuts fell mostly on product and technology staff, so new viewer and partner features may arrive more slowly.