Netflix, Inc. 8-K

Summary

Q3 2026 results with Q4 and FY2026 guidance. Revenue rose 12% Y/Y to $12.9B and operating margin was 34.6%, above the company’s forecast mainly due to expense timing; revenue was in line with forecast. FY2026 advertising revenue and free cash flow outlooks were lowered, citing slower ad-product rollout and an expected Q4 real-estate transaction closing, respectively.

Key Figures

• Revenue growth was driven by subscription revenue, including membership and pricing increases, advertising growth and favorable foreign exchange; retention improved Y/Y. Operating income and margin were above forecast mainly because of expense timing and slightly higher revenue.
• Repurchased 63.9M shares for $4.80B, vs $1.86B in Q3 2025; diluted weighted-average shares were 4.20B, down from 4.34B. Remaining repurchase authorization was $22.3B.
• Gross debt was $15.3B and cash and cash equivalents were $8.2B; non-GAAP net debt was $7.11B. Gross debt was ≈$1B higher Q/Q after a $1B bond deal to fund a $1B Q4 maturity.

Against earlier guidance (derived from earlier filings)

Guidance

Q4 revenue growth is expected from membership, pricing and advertising; the Q4 margin forecast includes an ≈120 bp negative impact from headcount reductions. FY2026 margin guidance includes an ≈30 bp impact from those reductions.

Guidance changes, derived from earlier filings

Metric	Period	Earlier guidance	Guidance now	Change
Revenue (GAAP)	FY2026	$51.0B-$51.4B; 13%-14% (≈12% FX-neutral)	$51.1B; +13% Y/Y, +12% F/X-neutral	narrowed (raised low end, lowered high end)
Advertising revenue	FY2026	≈$3B; projected to roughly double	≈$2.7B	lowered
Free cash flow (non-GAAP)	FY2026	≈$12.5B	≈$12B	lowered
Operating income growth (GAAP)	FY2026	20%+	20%+ Y/Y	reaffirmed

Investor Takeaways

• Watch Q4 revenue and operating margin against guidance, including whether expense timing and headcount reductions affect the margin outcome.
• Track FY2026 advertising revenue and free cash flow against the revised outlook; Netflix cited slower-than-expected ad-product capability rollout and an expected Q4 real-estate transaction closing.
• The advertising tier is planned for 15 additional countries in 2027, with the first launches in March across nine EMEA countries, Colombia, Peru and New Zealand.