Netflix projects lower-than-expected 2026 ad revenue in latest earnings report
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Set us as preferred Netflix on Tuesday reported stronger-than-expected third-quarter profit but cut its advertising forecast for the year, capping a turbulent stretch for the streaming giant, which in the past week cut 6% of its workforce in its biggest round of layoffs since 2022 and parted ways with two of its top content executives.Revenue rose 12% to $12.87 billion, slightly above analyst expectations, the Los Gatos-based companysaid.Net income jumped 44% of $3.7 billion, and earnings per share of $0.87 beat the $0.82 that analysts surveyed by FactSet had expected.
A year ago, profit was weighed down by a one-time tax charge in Brazil, which inflates this year’s comparison.The weak spot was advertising, a business Netflix has been counting on to drive growth.The company now expects $2.7 billion in ad revenue this year, down from its earlier forecast of $3 billion, citing a slower-than-expected rollout of some ad product capabilities.
As a result, Netflix expects full-year revenue of $51.1 billion, toward the low end of its previous forecast of $51 billion to $51.4 billion.For the fourth quarter, Netflix expects revenue of $13.4 billion, up 12% from a year earlier.The company’s stock price has fallen 44% from a year ago.On Tuesday, the stock closed at $68.69 a share, down about 2% ahead of the results.
In after-hours trading, shares were down 5%.The results arrive as some analysts have grown concerned about Netflix’s future growth.
Last week, the company laid off about 1,000 employees and named former Disney executive Peter Rice as chief content officer, replacing longtime executive Bela Bajaria.On Monday, Netflix announced the exit of its film chief, Dan Lin.Netflix, widely considered the winner of the streaming wars, is now under scrutiny over how it will better compete against rivals like YouTube, which has c...