Netflix's revenue grew 12% year over year to $12.9bn in the third quarter of 2026, the streaming company said in its latest letter to shareholders on October 20th.
Operating income rose 37% to $4.46bn, giving an operating margin of 34.6%, up from 28.2% a year earlier. Diluted earnings per share came to $0.87, against $0.59 in the same quarter of 2025. Netflix said the margin beat its own forecast "primarily due to the timing of expenses."
GTA VI and third-party content
In a section on licensing, Netflix pointed to its work with Take-Two, the publisher that owns Rockstar Games. "We partnered with Take-Two to unveil a sneak peek of the highly anticipated Grand Theft Auto VI in August," the company wrote. It also cited a new licensing deal with Disney, which brings all five Ice Age films to the service ahead of Ice Age: Boiling Point in February 2027, and a partnership with French broadcaster TF1.
The letter said Netflix now serves "an audience approaching one billion people." It did not discuss Netflix's games business directly. Instead, it described the core of the service as streaming TV, film and live events, which it said brings in "nearly all of our revenue."
What's next for Netflix
For the fourth quarter, Netflix expects revenue of $13.4bn and an operating margin of 26%, which includes a hit of about 120 basis points from its recently announced headcount reductions. It now expects 2026 ad revenue of about $2.7bn, down from around $3bn, and blamed a "slightly slower than expected rollout of some ad product capabilities." Full-year revenue is forecast at $51.1bn, up 13%.
Netflix also said its advertising tier will reach 15 new countries in 2027, starting in March with nine in EMEA (Europe, the Middle East and Africa), plus Colombia, Peru and New Zealand. Its Q4 live slate includes the NFL's first Thanksgiving Eve game, a Christmas Day doubleheader and the Tyson Fury vs. Anthony Joshua fight. Co-CEOs Greg Peters and Ted Sarandos were due to take analysts' questions in a live video interview at 1:45 PM PT / 9:45 PM BST.
