Netflix Posts Q3 Revenue of $12.87 Billion as Shares Slip on Soft Guidance
Netflix reported Q3 2026 revenue of $12.87 billion and EPS of $0.87, but issued weak guidance that sent its stock down 6%. The results coincide with massive industry shifts, including Paramount's merger with Warner Bros.
Streaming giant Netflix reported its financial results for the third quarter of 2026, posting revenue of $12.87 billion, matching analyst expectations of $12.88 billion. Earnings per share came in at $0.87, topping the consensus estimate of $0.82. Despite the solid earnings beat, the company issued a softer revenue guidance for the upcoming quarter, expecting $13.44 billion compared to the projected $13.51 billion.
Market Reaction and Stock Performance
Following the earnings release, Netflix shares dropped 6% in after-hours trading, bringing its year-to-date losses to approximately 22%. The broader streaming market recently experienced a seismic shift after Paramount completed its massive acquisition of Warner Bros. in a deal valued at $111 billion. The newly merged entity, named Skydance, will be led by David Ellison alongside co-CEO Ynon Kreiz, one of the most prominent Israeli executives in the American entertainment industry.
Strategic Challenges and Layoffs
The historic merger creates a media behemoth uniting major brands and platforms such as HBO, CBS, and CNN, with plans to cut $6 billion in costs over the next three years while producing at least 30 films annually. This intense competitive pressure coincides with reports that Netflix is planning a global layoff round affecting roughly 6% of its workforce, or about 1,000 employees, primarily targeting product, legal, and human resources departments.
"Netflix continues to face shifting market dynamics and heightened competition in the global streaming landscape," noted market analysts following the earnings announcement.
Despite these headwinds, prominent investor Bill Ackman has reinstated a stake in Netflix through Pershing Square, expressing confidence in the company's leading market position and its base of over 325 million subscribers. Meanwhile, Chief Content Officer Bela Bajaria is reportedly set to step down, with former Disney and Fox executive Peter Rice expected to take her place.
