Netflix (NASDAQ: NFLX) is expected to report third-quarter earnings at 4:05 PM ET today, with management targeting $12.86 billion in revenue and a 33.2% operating margin. Investors will be watching closely for signs that the streaming giant can deliver stronger profitability alongside continued revenue growth.
Advertising will be a major focus tonight. Netflix expects ad revenue to roughly double to $3 billion in 2026.
With shares down 25.49% year to date and trading at roughly 22 times earnings, expectations have fallen. The average analyst price target stands at $91.13 vs. today’s $69.53 share price, while management believes Netflix has penetrated less than 45% of its addressable households.
Strong margins and accelerating ad revenue could help revive confidence in Netflix’s long-term growth potential. However, a disappointing quarter could reinforce concerns that the company’s growth is beginning to mature.
This article is updated throughout the trading day. Check back for more.
Netflix (NASDAQ:NFLX | NFLX Price Prediction) is expected to report Q3 earnings today at 4:05 PM ET. The stock is down 41.75% over the past year, and this report will test whether slower content costs as a percentage of revenue finally produces the margin gains management has promised.
Last quarter, revenue reached $12.56B, up 13.4% YoY and just shy of the $12.58B estimate. EPS of $0.80 exceeded expectations of $0.79, and operating margin hit 33.4%, slightly ahead of the company’s internal target.
All four geographic regions grew by double digits, with Latin America leading at 21%. Free cash flow fell to $1.53B from $2.27B because of higher cash tax payments. Shares dropped 7.26% on earnings day despite a record $4.7B buyback quarter.
| Metric | Q3 2026 Estimate | YoY Change | FY 2026 Estimate | FY 2027 Estimate |
|---|---|---|---|---|
| Revenue | $12.88B | +11.9% | $51.21B | $56.98B |
| EPS | $0.82 | N/M | $3.58 | $3.81 |
Consensus for tonight’s results sits right on top of management’s own guidance of $0.82 in EPS, which leaves little room for error. The year-ago EPS of $5.87 was reported before the split and included a roughly $619M Brazilian tax charge, so a clean YoY comparison doesn’t really make sense. EPS estimates have also slid from $0.84 90 days ago.
The first thing I’m watching tonight is advertising revenue. Management said the gap between ad-tier and standard-tier monetization is “essentially near-term under-realized revenue growth.” I’m also looking for updates on how the U.S. upfront negotiations closed and how programmatic Pause Ads and live inventory are doing.
Next, investors are going to be watching margins. Content amortization (content costs) ran heavy in the first half of the year, and management guided full-year content amortization growth of about 10%, with a cost slowdown in the second half of the year. Market-based forecasts put a 66.5% chance of a 32-34% operating margin.
Pricing and engagement come third. Price increases in the U.S., Mexico, and Spain are tracking to plan, and view hours rose 2% in the first half.
Live events matter here too for growing the top of the funnel. 6 out of the top 10 new-member sign-up days in the past five years came from live programming, and the larger NFL schedule starts this fall.
Finally, analysts will be watching whether full-year free cash flow guidance of about $12.5B holds, with $1B of debt maturing later in 2026.
| Quarter | EPS Surprise | Earnings-Day Move | 7-Day Move | 30-Day Move |
|---|---|---|---|---|
| Q2 2026 | +1.48% | -7.26% | +1.65% | +12.79% |
| Q1 2026 | -8.55% | -9.72% | -5% | -8.2% |
| Q4 2025 | +1.43% | -0.84% | -1.93% | -9.84% |
| Q3 2025 | -15.79% | -10.07% | -1.43% | -6.56% |
On average, shares swung -1.68% in the week following earnings over the past year.
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Thomas Richmond is a financial writer and content strategist with 5+ years of experience covering stocks and financial markets. He has published over 500 articles focused on individual stock analysis, helping investors better understand business fundamentals, stock valuations, and long-term opportunities.
Thomas previously served as a Content Lead at TIKR, a stock research platform, where he helped scale the company’s blog to hundreds of articles per month and contributed to a weekly newsletter reaching more than 100,000 investors.
Outside of work, Thomas enjoys weight lifting and soccer.
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