Netflix reported third quarter results that met revenue forecasts and exceeded earnings expectations. Revenue grew 12% year-over-year to $12.9 billion, while operating margins expanded significantly to 34.6%, outperforming guidance due to revenue upside and the timing of expenses. While subscription growth remained robust, management moderated its full-year advertising revenue outlook.
Key Highlights
- Operating margin reached 34.6% in the third quarter, a substantial increase from 28.2% in the prior year period, though management projects a seasonal decline to 26.0% in the fourth quarter.
- Full-year 2026 advertising revenue guidance was lowered to approximately $2.7 billion from the previous $3 billion target, cited as a result of a slower-than-anticipated rollout of specific ad product features.
- The company executed its largest-ever quarterly share repurchase program, buying back 63.9 million shares for $4.8 billion during the period.
- India emerged as a major growth engine, delivering its largest-ever quarter of paid net additions and 18% revenue growth on a constant currency basis.