The EPS beat is largely mechanical (expense timing, share buybacks) and does not offset the revenue miss and lowered ad revenue guidance. Watch Q4 margin compression (26.0% vs 34.6% in Q3) and whether ad revenue shortfall persists into 2027.
Price Chart
Executive Summary
Netflix Q3 2026 revenue of $12.87B (+12% YoY) was in-line with its own forecast but below the $13.45B consensus estimate, while diluted EPS of $0.87 beat the $0.68 consensus by 28% due to operating margin expansion and expense timing. Full-year 2026 revenue guidance was trimmed to $51.1B (from a prior midpoint of ~$51.2B) and ad revenue guidance was cut to $2.7B from ~$3B, offsetting the EPS beat and strong operating cash flow.
Key Financial Metrics
Key Facts
- Q3 2026 revenue: $12.874B, +12% YoY, in-line with company forecast but below $13.45B consensus
- Q3 2026 diluted EPS: $0.87 vs $0.59 YoY (+49%), beating consensus of $0.68 by 28%
- Q3 operating margin: 34.6%, up from 28.2% YoY, ahead of forecast due to expense timing
- Full-year 2026 revenue guidance lowered to $51.1B (0.2% below prior midpoint), ad revenue guidance cut to $2.7B from ~$3B
- Q4 2026 revenue forecast: $13.442B (+11.5% YoY), operating margin 26.0% (includes 120bps headcount reduction impact)
- 2026 FCF forecast reduced to ~$12.0B from $12.5B due to real estate transaction timing
- Q3 share repurchases: 63.9M shares for $4.8B (largest quarter ever), $22.3B remaining authorization
- Advertising tier represents over 60% of Q1 sign-ups in ad countries; ad revenue now expected at $2.7B for 2026 (down from $3B)
Financial Impact
Revenue miss vs consensus of ~$580M (4.3% below $13.45B); EPS beat of $0.19 (28% above $0.68 consensus); full-year revenue guidance trimmed by ~$100M
Risk Factors
- Ad revenue guidance cut from $3B to $2.7B signals slower ad product rollout and potential competitive pressure
- Q4 operating margin of 26.0% includes headcount reduction costs, a significant sequential drop from 34.6%
- Revenue growth decelerating from 16% in Q1 to 12% in Q3, with Q4 forecast at 11.5% YoY
- Full-year revenue guidance slightly below prior midpoint despite subscription revenue outperformance
Investment Themes
Documents Analyzed
This report is based on 6 SEC documents filed with EDGAR.
| Document | Accession Number |
|---|---|
| 8-K Filing (Primary) | 0001065280-26-000290 |
| Document: nflx-20261020.htm | 0001065280-26-000290 |
| Document: 0001065280-26-000290-index-headers.html | 0001065280-26-000290 |
| Document: 0001065280-26-000290-index.html | 0001065280-26-000290 |
| Document: 0001065280-26-000290.txt | 0001065280-26-000290 |
| 8-K Data (Synthetic) | 0001065280-26-000290 |
Filters
| Type | Now | ||||
|---|---|---|---|---|---|
Oct 26, 2026 1d ago | 144 | $63.78 | awaiting T+60 | — | $62.52 (−1.98%) |
Oct 21, 2026 6d ago | Institutional Cluster | $67.05 | awaiting T+60 | — | $62.52 (−6.76%) |
Oct 21, 2026 6d ago | ANALYST-DOWNGRADE | $65.04 | awaiting T+60 | — | $62.52 (−3.87%) |
Oct 20, 2026 7d ago | 8-K | $65.04 | awaiting T+60 | — | $62.52 (−3.87%) |
Sep 29, 2026 28d ago | ANALYST-UPGRADE | — | awaiting T+60 | — | — |
Sep 18, 2026 5w ago | ANALYST-DOWNGRADE | — | awaiting T+60 | — | — |
Sep 14, 2026 6w ago | Press Release | $80.32 | awaiting T+60 | — | $62.52 (−22.16%) |
Aug 10, 2026 11w ago | Insider Cluster | $74.79 | awaiting T+60 | — | $62.52 (−16.41%) |
Aug 6, 2026 11w ago | Insider Cluster | $74.14 | awaiting T+60 | — | $62.52 (−15.67%) |
Aug 4, 2026 11w ago | Insider Cluster | $74.20 | awaiting T+60 | — | $62.52 (+15.74%) |
US Market Status
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