Key Highlights

  • NFLX shares fell 6.51% pre-market to $64.22, down $4.47 from the prior close of $68.69.
  • Q4 revenue guidance of $13.44 billion and EPS of $0.67 came in below consensus.
  • The 2026 ad revenue forecast was cut to about $2.7 billion from $3 billion.
  • Q3 adjusted EPS of $0.87 beat the $0.82 estimate on revenue of $12.9 billion.
  • Q3 revenue growth of 11.8% was the slowest in nearly three years.

Q3 Beat Overshadowed by Soft Q4 Guidance

Netflix (NASDAQ:NFLX) shares fell 6.51% pre-market today to $64.22, down $4.47 from the prior close of $68.69. The stock sits below its 52-week low of $65.08 as investors weigh a third-quarter profit beat against a soft fourth-quarter outlook.

Q3 revenue of $12.9 billion matched estimates and adjusted EPS of $0.87 beat the $0.82 estimate. Revenue growth of 11.8% was the slowest in nearly three years, and fourth-quarter guidance of $13.44 billion in revenue and $0.67 in EPS landed below consensus.

Netflix, based in Los Gatos, California, is a global streaming entertainment company offering TV series, films, documentaries, games and live programming in about 190 countries. Revenue comes mostly from tiered monthly memberships, with a fast-growing ad-supported plan adding a second stream.

Ad Forecast Cut and Delayed Partner Rollouts

Netflix cut its 2026 ad revenue forecast to about $2.7 billion from $3 billion. Management said the ads business is growing more than 80% this year but is slightly behind its aggressive target because of delays in rolling out partner integrations for new ad products. Ad tiers are set to launch in 15 new countries next year.

Layoffs, Content Changes and Analyst Target Trims

The report follows last week's layoffs of about 6% of staff and a shake-up of content leadership. Management said Q4 guidance includes about 120 basis points of cost tied to the headcount reductions and will give 2027 guidance, including margin, in January.

Analysts are trimming targets, with Bernstein at $80, Evercore at $90, Barclays at $65 and Morgan Stanley at $77. Netflix reports earnings of $3.10 per share and a forward P/E near 19, within a 52-week range of $65.08 to $116.73.

Next Up: 2027 Guidance in January

The move looks stock-specific rather than sector-driven. Investors will watch international engagement, which was strong in Asia-Pacific, Latin America and EMEA with India view hours up 24%, along with the ad rollout and January's 2027 guidance.