Brief

Netflix reports Q3 earnings, cuts staff and lowers ad revenue forecast

The streaming giant posted a 12% revenue rise but warned of slower ad rollout and announced major layoffs.

By Felo News Desk · Published Wed, 21 Oct 2026 03:26:09 GMT

Netflix announced third‑quarter 2026 results on Tuesday, showing revenue of $12.874 billion, up 12% year‑over‑year, and net income of $3.7 billion, a 44% increase. Earnings per share came in at $0.87, surpassing FactSet analysts’ expectation of $0.82.

At the same time, the company confirmed it had cut about 6% of its workforce – roughly 1,000 jobs – in its largest layoff since 2022, and it said former Disney executive Peter Rice will replace longtime content chief Bela Bajaria as chief content officer. Film chief Dan Lin also exited the firm.

Looking ahead, Netflix projected fourth‑quarter revenue of $13.4 billion, a 12% rise from the prior year, and full‑year revenue of $51.1 billion. However, the firm lowered its 2026 ad‑supported revenue estimate to $2.7 billion, down from an earlier $3 billion forecast, citing a slower rollout of certain ad‑product capabilities.

Shares fell 2% in after‑hours trading, closing at $68.69 before the report and dropping about 5% after the earnings release. The stock is down 44% from a year ago.

Analysts noted that Netflix’s viewership has slipped on some flagship series. The second season of “Avatar: The Last Airbender” delivered 8.7 million views in its first four days, a 59% decline from the debut season. By contrast, rival platforms such as YouTube captured 14.2% of U.S. TV‑watching time in July, compared with Netflix’s 7.8%.

Netflix said in a shareholder letter that its strategy remains focused on “investing in differentiated, exclusive, professionally‑produced entertainment” and pairing originals with a broad third‑party library to drive subscriptions and ad revenue.