Netflix cut its 2026 advertising revenue outlook to about $2.7 billion as some ad features took longer to roll out, even as its third-quarter revenue and operating margin increased.
The new estimate is roughly $300 million below Netflix’s previous forecast of about $3 billion. In its Oct. 20 shareholder letter, the company tied the reduction to delays in introducing some advertising capabilities.
Netflix reported $12.874 billion in revenue for the quarter through Sept. 30, an 11.8% increase from a year earlier. Its operating margin reached 34.6%, up from 28.2%, while diluted earnings per share rose from $0.59 to $0.87.
The company said revenue from subscriptions grew faster than it had expected. For the full year, Netflix now projects $51.1 billion in total revenue and a 31.5% operating margin. Its earlier annual revenue outlook ranged from $51 billion to $51.4 billion.
Netflix also expects $13.44 billion in fourth-quarter revenue and a 26% operating margin. The margin forecast includes an expected reduction of about 1.2 percentage points from headcount cuts, according to its shareholder letter. The margin in the same quarter last year was 24.5%.
Reuters reported that Netflix shares fell nearly 6% in after-hours trading following the results, a reaction covered in EconoTimes’ earlier report on the advertising forecast cut.
The results also provide new financial figures for traders in Binance’s NFLXUSDT perpetual futures contract. A position in the contract is linked to Netflix shares but carries no ownership of the stock. Trading is available around the clock, and the contract settles in Tether USDt (USDT).
Netflix plans to extend its advertising tier to 15 more countries in 2027, with the first launches scheduled for March.
