Netflix issues weak fourth-quarter forecast, shares drop
NFLX•Netflix forecast fourth-quarter net income of $2.79 billion and earnings per share of 67 cents, below analyst forecasts of $3.07 billion and 73 cents. It also cut its 2026 advertising forecast to roughly $2.7 billion from about $3 billion, and shares fell more than 5% after hours.
1. Fourth-quarter outlook
Netflix forecast fourth-quarter net income of $2.79 billion and earnings per share of 67 cents, below analyst forecasts of $3.07 billion and 73 cents. Third-quarter revenue rose 11.8% to $12.87 billion, in line with forecasts, while earnings per share of 87 cents topped the 82-cent average forecast. Shares fell more than 5% to $68.69 in after-hours trading.
2. Advertising forecast cut
Netflix reduced its 2026 advertising forecast to roughly $2.7 billion from about $3 billion, saying some ad product capabilities rolled out slightly slower than expected.
3. Content strategy
Netflix said it would continue licensing more third-party content and focus on streaming TV, film and live events, while investing in original shows. The company laid off about 1,000 employees, or 6% of its workforce, last week and made changes to its programming leadership.
