Highlights

  • Third quarter revenue grew 12% to $12.87 billion, while operating margin widened to 34.6% from 28.2% a year earlier.
  • Diluted earnings per share rose 49% to $0.87 from $0.59, and net income reached $3.66 billion.
  • The company repurchased 63.9 million shares for $4.8 billion, its largest quarterly buyback, with $22.3 billion of capacity remaining.
  • Management trimmed its 2026 advertising revenue and free cash flow outlooks while guiding to full-year revenue of $51.1 billion.

Netflix (NASDAQ:NFLX) shares were trading near their 52-week low at USD 65.78 on October 21, 2026, down 4.24%. The streaming entertainment company reported third quarter 2026 results on October 20, bought back $4.8 billion of its stock during the quarter and issued guidance that lowered its 2026 advertising revenue and free cash flow estimates.

Based in Los Gatos, California, Netflix is a Delaware corporation that says its mission is to entertain the world while building a wildly successful business. Its core service delivers series, films and live events, monetized through subscriptions and advertising. It reports revenue across four regions: the United States and Canada, Europe, the Middle East and Africa, Latin America, and Asia-Pacific. The company says its audience is approaching one billion people. Its fiscal year ends December 31.

Revenue Up 12% and Operating Margin of 34.6%

Revenue for the quarter ended September 30, 2026 was $12.87 billion, up from $11.51 billion a year earlier and in line with the company's forecast. Growth was 12% as reported and 11% on a currency-neutral basis, a non-GAAP measure. The company tied the increase mainly to subscription revenue, reflecting more memberships and higher prices, along with growth in advertising revenue. Reported growth was below the 17% recorded in the third quarter of 2025.

Operating income climbed 37% to $4.46 billion, and operating margin reached 34.6% against 28.2%. Management said margin ran ahead of its forecast mainly because of the timing of expenses. Net income was $3.66 billion, and diluted EPS rose 49% to $0.87. For nine months, net income was $12.35 billion, which included $2.95 billion of interest and other income compared with $127 million a year earlier.

By region, revenue grew 11% to $5.63 billion in the United States and Canada, 11% to $4.11 billion in Europe, the Middle East and Africa, 17% to $1.60 billion in Latin America and 12% to $1.54 billion in Asia-Pacific. India view hours rose 24%, and paid net additions there were the largest in any quarter. Management acknowledged investor questions about view hours growth and said it aims to accelerate it.

Largest Buyback, Debt and Cash Flow

Operating cash flow was $3.16 billion versus $2.83 billion, and free cash flow, a non-GAAP measure, was $2.88 billion versus $2.66 billion. The 63.9 million shares repurchased for $4.8 billion marked the company's largest quarter of buybacks, and $22.3 billion of authorization remains.

Gross debt ended the quarter at $15.3 billion against $8.2 billion of cash and equivalents. Gross debt was about $1 billion higher than at the end of the second quarter after a $1 billion bond offering, completed to fund a $1 billion maturity due in the fourth quarter.

Content, Partnerships and Advertising Plans

The company cited a TF1 partnership in France and a new Disney licensing agreement. On advertising, it plans to introduce its ad tier in 15 more countries in 2027, starting in March with nine countries in Europe, the Middle East and Africa, plus Colombia, Peru and New Zealand.

2026 Guidance and Fourth Quarter Forecast

Management described its guidance as its actual internal forecast at the time of reporting. For the fourth quarter it expects revenue of $13.4 billion, up 12%, and an operating margin of 26.0%, which includes roughly 120 basis points of negative impact from recently announced headcount reductions. It forecasts fourth quarter diluted EPS of $0.67.

For full-year 2026, the company expects revenue of $51.1 billion, up 13%, which is 0.2% below the midpoint of its prior range. It now expects advertising revenue of about $2.7 billion rather than roughly $3 billion, citing a slightly slower rollout of some ad capabilities. Operating margin is forecast at 31.5% versus 29.5% in 2025. Free cash flow is now expected near $12.0 billion instead of $12.5 billion, mainly because of a real estate transaction expected to close in the fourth quarter.