TLDR
- Netflix (NFLX) closed Tuesday at $68.69, down 1.66%, and traded at $64.69 overnight.
- Q3 EPS of 87 cents beat the 82 cents expected, while revenue of $12.87 billion matched estimates.
- Q4 revenue guidance of $13.44 billion fell short of the $13.51 billion consensus.
- The 2026 ad revenue forecast was lowered to about $2.7 billion from $3 billion.
- The stock is down about 48% from its June 2025 high and roughly 25% this year.
Netflix (NFLX) stock closed Tuesday at $68.69, down 1.66%. In overnight trading it was at $64.69, a drop of 5.82%.
The move came after the company posted third-quarter results and a fourth-quarter outlook that missed. The profit looked good, but the forecast got all the attention.
Earnings per share were 87 cents, ahead of the 82 cents analysts expected. Revenue of $12.87 billion matched estimates.
Revenue grew almost 12% from a year earlier. Netflix pointed to membership growth and a price increase that began in March.
Net income reached $3.66 billion, compared with $2.55 billion a year ago. The company said the timing of expenses played a part.
Guidance Disappoints
For the fourth quarter, Netflix expects revenue of $13.44 billion, up more than 11%. The consensus estimate was $13.51 billion.
The full-year 2026 forecast was narrowed to $51.1 billion, up 13%. That is the low end of the earlier range of $51 billion to $51.4 billion.
Analysts had been looking for $51.2 billion. So even the narrowed number came in a touch light.
The ad business took a hit too. Netflix now expects about $2.7 billion in 2026 ad revenue, down from roughly $3 billion.
The company blamed a slower rollout of some ad product features. Co-CEO Greg Peters said Netflix is “a bit behind our aggressive target for the year.”
Geetha Ranganathan, a Bloomberg Intelligence analyst, told Yahoo Finance the outlook points to a slowing growth algorithm. She said it “spells trouble for the company.”
Engagement and Staffing
Netflix addressed the worry over view hours growth in its shareholder letter. It said engagement remains healthy.
Peters said US engagement is solid but has room to improve. “It’s our goal to go from very good to great,” he said.
Last week, Netflix announced it would cut about 6% of its workforce, or roughly 1,000 jobs. It is the company’s largest cut since 2022.
Chief Content Officer Bela Bajaria is leaving, and former Disney executive Peter Rice will take over. Netflix expects the job cuts to weigh on fourth-quarter operating margin by about 120 basis points.
The stock is down about 48% from its June 2025 record high and roughly 25% this year. Overnight, it sat at $64.69.
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