Netflix revenue rose 12% in the third quarter as it cut its ad sales outlook

Netflix said on October 20, 2026, that revenue rose 12% from a year earlier to $12.9 billion in the third quarter, or 11% excluding currency moves, in line with its own forecast. Operating margin was 34.6%, up from 28.2% a year earlier, which the company said was ahead of its forecast “primarily due to the timing of expenses.”

The company also lowered its advertising outlook. It now expects 2026 ad revenue of about $2.7 billion, against approximately $3 billion previously, citing a “slightly slower than expected rollout of some ad product capabilities.” In its July letter to shareholders, Netflix had described the $3 billion figure as “a projected rough doubling of our ads revenue.”

At about $2.7 billion, advertising would be a little over 5% of the $51.1 billion in revenue Netflix forecasts for 2026. Netflix said it will introduce its advertising tier in 15 new countries in 2027, with the first launches in March 2027.

Results by region

Latin America grew fastest in reported terms, though currency moves helped: excluding them, growth was 12%. Asia-Pacific grew 15% on that basis. The U.S. and Canada, still the largest region at $5.6 billion, grew 11%, down from 17% growth in the same quarter of 2025.

Outlook and cash

For the fourth quarter, Netflix expects revenue of $13.4 billion, up 12%, and an operating margin of 26.0%, compared with 24.5% a year earlier. That forecast includes about 120 basis points of negative impact from what the company called “our recently announced headcount reductions.”

For the full year, Netflix expects revenue of $51.1 billion, up 13%, and an operating margin of 31.5%. The revenue figure is 0.2% below the mid-point of the $51.0 billion to $51.4 billion range it gave in July. It also lowered its 2026 free cash flow forecast to about $12.0 billion from $12.5 billion, mainly because of a real estate transaction it expects to close in the fourth quarter.

Third-quarter free cash flow was $2.9 billion, up from $2.7 billion. Diluted earnings per share were $0.87, up 49% from $0.59 a year earlier; both figures reflect the ten-for-one stock split that took effect on November 14, 2025.

Members and viewing

The letter gives no subscriber total. Netflix describes itself as “serving an audience approaching one billion people” and said membership growth “benefited from continued, healthy retention in every region.” Globally and in the U.S., it said, churn improved on a year earlier and was better than forecast. Member response to its 2026 price changes, it said, was consistent with prior adjustments.

The company addressed viewing time directly: “We know there’s some investor concern about our view hours growth.” It said view hours in India grew 24% year over year, while view hours per member grew by low-to-mid single digits in the quarter. Among third-quarter releases, it cited The Last House with 91 million views and Facing El Chapo with 58 million. Netflix counts views over the first 91 days after each episode's release.

What comes next

Netflix said the fourth quarter brings “our biggest quarterly live slate to date,” led by the NFL's first Thanksgiving Eve game, with a halftime performance by U2, a Christmas Day doubleheader and the Tyson Fury vs. Anthony Joshua boxing match. Its next letter, covering the fourth quarter, will show whether the full-year revenue and ad forecasts held.

For how outside measurement tracks Netflix's share of U.S. TV viewing, see our report on Nielsen's August Gauge.