Netflix cuts ad forecast and issues weaker Q4 profit guidance after layoffs
The streaming giant lowered its full‑year ad revenue target and projected Q4 earnings below analysts' expectations, after cutting about 1,000 jobs.
By Felo News Desk · Published
Netflix issued weaker‑than‑expected fourth‑quarter profit guidance and trimmed its 2026 advertising revenue forecast, days after announcing a 6% workforce reduction and replacing two top programming executives, according to the Independent.
What happened
The company reported third‑quarter revenue of $12.87 billion, up 11.8% year‑on‑year, but said its fourth‑quarter net income would be $2.79 billion with earnings per share of 67 cents, below consensus estimates of $3.07 billion and 73 cents. It also reduced its full‑year advertising projection to roughly $2.7 billion from about $3 billion, citing slower rollout of some ad products.
What the reports add
- Shares fell nearly 6% to $64.66 in after‑hours trading, extending a decline of more than 40% over the past year.
- Third‑quarter revenue growth was the slowest in nearly three years, though it met Wall Street forecasts.
- Third‑quarter earnings per share reached 87 cents, beating the 82‑cent consensus from analysts surveyed by LSEG.
- Analyst Paolo Pescatore of PP Foresight warned that Netflix was “focused on too many unwanted distractions” and needed to “get back to basics and focus on compelling content.”
What was said
“I know that we could do better,” Sarandos said in a post‑earnings video call. “Now we’ve seen an opportunity to take our slate to the next level.” – Independent
“Peter Rice understands talent relations, and in a competitive market, creative talent have choices of where they want to work,” Sarandos added. “We want Netflix to always be the place that they love to do the best work of their life.” – Independent
How it came about
Earlier in October, Netflix announced a cut of about 1,000 jobs – roughly 6% of its workforce – affecting product, tech, legal and HR teams, described by co‑CEOs Greg Peters and Ted Sarandos as “disciplined resource prioritisation” ahead of earnings.Netflix to cut about 1,000 jobs in latest workforce reduction
The day before the earnings release, Netflix posted Q3 results showing a 12% revenue rise to $12.874 billion, net income up 44% to $3.7 billion, and EPS of $0.87, while also lowering its 2026 ad‑supported revenue forecast to $2.7 billion.Netflix reports Q3 earnings, cuts staff and lowers ad revenue forecast
Key facts
- Netflix projected fourth‑quarter net income of $2.79 billion and EPS of 67 cents, below consensus estimates. (independent.co.uk)
- The company trimmed its 2026 advertising revenue forecast to roughly $2.7 billion from about $3 billion. (independent.co.uk)
- Shares fell nearly 6% to $64.66 in after‑hours trading following the announcement. (independent.co.uk)
- Third‑quarter revenue rose 11.8% to $12.87 billion, the lowest growth rate in nearly three years. (independent.co.uk)
Timeline
- 2026-10-14 — Netflix announced a cut of about 1,000 jobs, roughly 6% of its workforce.
- 2026-10-20 — Netflix reported Q3 earnings with 12% revenue growth and lowered ad‑revenue forecast.
- 2026-10-21 — Netflix issued weaker Q4 profit guidance and trimmed ad forecast after layoffs.
