Netflix Shares Fall 5.2% at Midday After Ad Forecast Cut

Netflix shares were down 5.2% at 12:40 p.m. ET (16:40 UTC) Wednesday, Oct. 21, following an earnings beat, a lower advertising forecast and fourth-quarter guidance below analyst expectations.

The stock had fallen about 6% in premarket trading. For the quarter ended Sept. 30, Netflix earned $0.87 per diluted share, above the $0.82 analysts expected. Revenue rose 11.8% from a year earlier to $12.874 billion, roughly matching estimates.

Operating margin rose to 34.6% from 28.2% a year earlier. The timing of expenses helped Netflix exceed its operating-margin forecast.

Netflix lowered its 2026 advertising revenue forecast to about $2.7 billion from approximately $3 billion. The revision reflects a slightly slower-than-expected rollout of some advertising product capabilities. Membership growth, pricing and advertising all contributed to third-quarter revenue growth.

For the fourth quarter, Netflix projected $13.442 billion in revenue, below a $13.51 billion analyst estimate, and earnings of $0.67 per share. Its full-year revenue forecast of $51.1 billion is near the low end of its earlier $51 billion to $51.4 billion range. The company also expects a 26.0% operating margin in the fourth quarter.