Netflix Beats Profit Estimates but Shares Dip After Hours

Netflix reported its third-quarter earnings on Tuesday, and the results came in above what analysts had expected, according to CNBC. The company's earnings per share were 87 cents, compared with 82 cents estimated by analysts polled by LSEG. The third-quarter period ended on Sept. 30.

Netflix's revenue for the quarter was $12.87 billion, which matched the estimate. That amount was almost 12% higher than a year earlier. Net income was $3.66 billion, up from $2.55 billion a year earlier. The company said the jump in profit was partly due to the timing of expenses.

Netflix raised its subscription prices, and the increase took effect in March. The company said the response to the price hikes has been consistent with prior changes and with its expectations.

Looking ahead, Netflix expects fourth-quarter revenue to rise more than 11% to $13.44 billion. The company also narrowed its 2026 revenue forecast to $51.1 billion, which is a 13% increase. Its previous forecast range was $51 billion to $51.4 billion, and LSEG analysts had expected 2026 revenue of $51.2 billion.

The company made some changes to its staff last week. Netflix laid off about 6% of its employees, or roughly 1,000 workers. Chief Content Officer Bela Bajaria is leaving her role, and former Disney executive Peter Rice was named as the new Chief Content Officer. Netflix expects the layoffs to hurt its fourth-quarter operating margin by about 120 basis points.

Netflix also lowered its 2026 ad revenue expectation to around $2.7 billion, down from about $3 billion. The company said the change was due to a slower-than-expected rollout of ad product capabilities. On Tuesday, Netflix announced new features for advertisers. Co-CEO Greg Peters said the ads business is currently behind its aggressive target for the year.

Despite the stronger earnings, Netflix shares fell about 6% in extended trading on Tuesday.