Netflix Q3 2026: Profit Surges 37% Even as Ad Revenue Outlook Is Cut

Netflix posted third-quarter 2026 GAAP earnings per share of $0.87, beating expectations, with revenue of $12.87 billion essentially in line with estimates. Operating income climbed 37% to $4.46 billion as operating margin expanded to 34.6% from 28.2% a year ago.

That margin expansion came even as Netflix absorbed the cost of roughly 1,000 job cuts and leadership reshuffles that had weighed on sentiment in recent months. Net income rose 43.86% year over year, showing how efficiently the business now converts revenue into cash.

Management trimmed its full-year 2026 advertising revenue outlook to approximately $2.7 billion from a prior estimate of roughly $3 billion, citing a slower rollout of ad product capabilities. The ad tier expansion to 15 new countries has been pushed to 2027, with the first tranche launching in March of that year.

For the fourth quarter, Netflix guided for revenue of $13.44 billion while flagging that headcount reductions will weigh on Q4 operating margin by about 120 basis points. The full-year operating margin target of 31.5% was held in place, implying more than 20% annual operating income growth.

Netflix repurchased 63.9 million shares for $4.8 billion in Q3 2026, its largest quarter ever for buybacks, with $22.3 billion of remaining capacity under existing authorizations. For investors focused on capital return, that commitment is hard to overlook after the valuation reset the stock experienced before these results arrived.