Netflix Reports Record Q3 Operating Margin, Raises Caution on Ad Revenue Pace

Netflix said in a filing with the Securities and Exchange Commission that third-quarter revenue grew 12% year over year to $12.9 billion, with operating margin climbing to 34.6% from 28.2% a year earlier.

The company's quarterly results, detailed in an exhibit to its latest filing, showed diluted earnings per share of $0.87, up from $0.59 in the same period last year. Netflix attributed the margin outperformance primarily to the timing of expenses and a slight revenue upside versus its own forecast.

For the full year 2026, Netflix expects revenue of $51.1 billion, representing 13% growth, and an operating margin of 31.5%, compared with 29.5% in 2025. The company said this outlook is slightly below the midpoint of its prior forecast range because expected 2026 advertising revenue was lowered to approximately $2.7 billion from roughly $3 billion, which it attributed to a slower-than-expected rollout of some ad product capabilities.

Netflix forecast fourth-quarter revenue of $13.4 billion, up 12% year over year, with an operating margin of 26.0% that includes a roughly 120-basis-point negative impact tied to recently announced headcount reductions. The company said these organizational changes allow it to continue investing in high-impact areas to drive growth and innovation.

On content, Netflix pointed to Q3 titles including The Last House, Facing El Chapo, Death of the Pastor's Wife, and an NFL game from Melbourne, along with a strong slate in India led by the reality series Lock Upp. The company said its audience is approaching one billion people and highlighted its licensing partnership with France's TF1 and a new deal with Disney bringing titles including the Ice Age films to the service. Netflix also said it plans to introduce its advertising tier to 15 additional countries beginning in March 2027. The company said member response to its 2026 price changes has been consistent with prior adjustments and its expectations.

Finazon · prior-day close, indicative (IEX-derived, not the official close) · Oct 19, 2026