Netflix (NFLX) Q3 2026 earnings summary

Executive summary

• Q3 revenue rose 12% YoY to $12.87B; operating income increased 37% to $4.46B and net income rose 44% to $3.66B.

• Operating margin expanded to 34.6% from 28.2%, as revenue growth and lower cost of revenues outpaced several expense increases.

• Strategy remains centered on exclusive, professionally produced originals, supported by discovery, global distribution and monetization; ~95% of spend and nearly all revenue focus on the core.

• Live events and third-party programming complement originals, helping attract members, support advertising and add value.

Financial highlights

• Q3 revenue growth included $1.06B higher subscription revenue and $256M higher advertising revenue; FX contributed a favorable $101M, net of hedging.

• Q3 cost of revenues declined $85M YoY, including a prior-year $619M Brazil non-income-tax assessment; content amortization increased $233M.

• YTD revenue rose 14% to $37.68B; reported operating income was $12.61B and net income was $12.35B.

• YTD cash from operations was $10.20B versus $8.04B; reported YTD cash flow includes the $2.8B WBD termination fee.

Outlook and guidance

• Full-year guidance remains on track; strong revenue growth is expected into 2027 from membership, pricing and advertising, with 2027 guidance planned for January.

• Long-term objectives remain double-digit revenue growth, margin expansion and higher free cash flow; management reiterated its approach of investing for growth while steadily expanding margins.

• Cash from operations, available funds and financing access are expected to cover cash needs for the next 12 months and beyond; significant global content investment will continue.

• View-hour growth is an opportunity to accelerate revenue growth; 2027 guidance has not yet been issued.