Netflix beats profit forecasts but slides on soft fourth-quarter outlook

Netflix has posted a stronger-than-expected third-quarter profit, but a cautious fourth-quarter forecast overshadowed the results and knocked the streaming giant’s shares in after-hours trading.

The company reported after the market closed on Tuesday that revenue grew 11.8% to $12.87 billion, in line with Wall Street expectations, according to TheWrap, while net income came in at $3.7 billion, or 87 cents per share, ahead of the 82 cents analysts had forecast on average, Reuters reported.

For the fourth quarter, Netflix guided net income of $2.79 billion and earnings of 67 cents per share — below the average analyst forecast of $3.07 billion and 73 cents — with shares falling nearly 7% to $63.99 in after-hours trading, per Reuters. Fourth-quarter revenue guidance of $13.4 billion was separately reported by Barron’s.

Netflix also trimmed its 2026 advertising revenue forecast to roughly $2.7 billion from about $3 billion, saying some ad product capabilities rolled out more slowly than expected.

The results arrived days after the company cut around 6% of its workforce — roughly 1,000 jobs, its largest reduction since 2022 — and ousted chief content officer Bela Bajaria and film chief Dan Lin, with former Disney and Fox executive Peter Rice brought in to lead programming.

Netflix said it plans to spend $20 billion on content in 2026, expanding live events, sports, gaming and podcasts in a bid to rekindle growth in viewer engagement.