Netflix reported third-quarter results that exceeded analyst expectations on earnings while revenue aligned with projections, though the stock declined in extended trading. Net income for the quarter reached $3.66 billion, or 87 cents per share, compared with $59 cents a share in the prior year period. Revenue grew nearly 12% year over year, driven by membership expansion and subscription price increases implemented in March.
The streaming platform narrowed its full-year revenue forecast to $51.1 billion, representing 13% growth from the previous year. This figure fell at the lower end of the company’s prior guidance range of $51 billion to $51.4 billion and slightly below Wall Street expectations of $51.2 billion. Fourth-quarter revenue is projected to exceed 11% growth, reaching $13.44 billion, supported by membership gains, pricing actions, and advertising revenue.
Netflix reduced its full-year advertising revenue forecast to approximately $2.7 billion from a prior estimate of around $3 billion, citing slower-than-anticipated rollout of certain ad product capabilities. Despite the shortfall, company executives characterized the ads business as delivering strong growth since launch and expressed confidence in future expansion. The company announced new advertiser features designed to enhance audience targeting and ad performance measurement.
The earnings report comes amid organizational changes, including a recent 6% workforce reduction affecting roughly 1,000 employees and the departure of Chief Content Officer Bela Bajaria. Peter Rice, formerly with Disney, was appointed to replace her. Netflix indicated fourth-quarter results would experience an estimated 120 basis point negative impact on operating margin from the staffing reductions. The company emphasized its strategy to accelerate viewership growth through enhanced entertainment offerings, technology improvements, and monetization enhancements.
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