Netflix cut its 2026 advertising revenue forecast to about $2.7 billion, while its shares fell nearly 6% after hours Tuesday, Reuters reported, putting its ad rollout in focus despite higher quarterly earnings.
The revised estimate is below Netflix’s earlier projection of about $3 billion. In its third-quarter shareholder letter, the company said some advertising product capabilities were rolling out more slowly than expected. It forecast $13.44 billion in fourth-quarter revenue.
Third-quarter revenue rose to $12.87 billion from $11.51 billion a year earlier, Netflix said. Net income increased to $3.66 billion from $2.55 billion. Reuters reported that the shares traded at $64.66 in its after-hours snapshot.
Before the results, CNBC reported that options prices implied a 9% move in Netflix shares after earnings. That was the largest implied move since the third quarter of 2022. The figure described the expected size of a move, not whether shares would rise or fall.
Ahead of that 2022 report, options implied an 11% move; Netflix shares subsequently gained 13%, CNBC reported. The outlet said the stock’s median move over the previous eight quarters was 7.25%.
CNBC also reported that, by noon ET Tuesday, traders had bought roughly three calls for every two puts purchased. Six of the 10 most-bought options contracts were calls, with five of those set to expire Friday. Those purchases showed pre-results positioning but did not give a direction to the 9% implied move.
Netflix said it plans to introduce its advertising tier in 15 additional countries in 2027, beginning with launches in March.
