Netflix reported third-quarter revenue of $12.87 billion, up 11.8% from a year earlier, and net income of $3.66 billion, Variety reported. Revenue growth slowed to its lowest rate in three years, according to Variety. AFP reported that revenue and net income were above investor expectations, citing FactSet.

The company now expects about $2.7 billion in advertising revenue for 2026, down from its earlier forecast of $3 billion, and blamed a "slightly slower than expected rollout of some ad product capabilities," Variety reported. It forecast fourth-quarter revenue of $13.4 billion, below Wall Street's prior expectation of $13.5 billion, according to Variety.

Netflix stock dropped more than 5% Tuesday afternoon after the release, AFP reported. In premarket trading Wednesday, shares were at $64.88, down 5.55%, as of 4:09 AM Eastern time, according to CNBC market data.

"We know there's some investor concern about our view hours growth," the company said in its letter to shareholders, according to AFP and Variety. Co-CEO Ted Sarandos said on the analyst call that the US business is working but is "just not growing as fast as it could or as fast as we'd like," AFP reported.

Netflix laid off about 1,000 employees, about 6% of its workforce, last week and replaced chief content officer Bela Bajaria with veteran TV executive Peter Rice, Variety reported. Jefferies analysts estimate that average monthly viewing per member fell from 66 hours in the first half of 2023 to about 49 hours in the first half of 2026, according to Variety.

The company stopped reporting subscriber numbers in the first half of 2025, AFP reported. It plans to launch its ad-supported tier in 15 more countries in 2027, starting in March, Variety reported.

What we know: Netflix cut its 2026 ad revenue target to about $2.7 billion, and its shares fell after the report.
What we don't: Whether viewing growth will pick up as the company says it will.