Netflix, Inc. (NFLX)

Netflix reported third-quarter revenue of $12.9 billion on 20 October 2026, up 12 percent from a year earlier 1. Operating margin, the share of revenue left after running costs, rose to 34.6 percent from 28.2 percent 1. The company said subscriptions grew on more members and higher prices, and advertising revenue rose by $256 million 2.

The same letter lowered a goal: Netflix now expects about $2.7 billion of ad revenue in 2026, against about $3 billion before, and blames a slower rollout of some ad tools 1. For the full year it expects revenue of $51.1 billion and an operating margin of 31.5 percent 1.

On 14 October 2026 Netflix told staff it would let go of about 6 percent of its workforce, nearly 1,000 jobs, mostly in product, technology, legal and human resources, AP reported 8. The company said the cuts take about 120 basis points off its fourth-quarter operating margin, which it guides to 26.0 percent 1.

The open question is viewing time: the letter names "some investor concern about our view hours growth" and says the company seeks to speed it up 1. Members watched more than 97 billion hours in the first half of 2026, up 2 percent 4.

Netflix was incorporated in Delaware in August 1997 and went public in May 2002, renting DVDs by mail before it launched streaming in 2007 14. Its first country outside the United States was Canada, in September 2010 14.

By the end of 2017 Netflix counted over 117 million streaming memberships in over 190 countries 14. Revenue rose 32 percent that year, driven mainly by members abroad, and international revenue reached 44 percent of the total 14.

Between 2016 and 2020 revenue grew from $8.8 billion to $25.0 billion, and operating margin from 4 percent to 18 percent, as spending on its own shows was spread over far more members 9. In 2020 revenue rose 24 percent and paid memberships reached 203.7 million 9. The company tied that year's 36.6 million new members partly to pandemic stay-at-home rules 9.

The boom faded in 2022 1210. In the letter of 19 April 2022 Netflix reported a net loss of 0.2 million paid members, partly from leaving Russia, and estimated that over 100 million more households used shared accounts 12. Revenue grew 6 percent for 2022, while operating margin fell to 18 percent from 21 percent as content costs grew faster 10.

Netflix answered with two changes 13. In November 2022 it launched a cheaper plan with ads in 12 countries, and it planned paid sharing, charging for accounts used outside one household, through 2023 13. It also closed the DVD-by-mail service on 29 September 2023 27.

The changes worked: paid memberships rose by 29.5 million in 2023 and 41.4 million in 2024, to 301.6 million 11. Revenue grew 16 percent in 2024 to $39.0 billion on more members and price increases, and operating margin reached 27 percent 11.

In 2025 revenue rose 16 percent to $45.2 billion and net income 26 percent to $11.0 billion, helped by advertising, which grew more than 2.5 times to over $1.5 billion 36. That year Netflix stopped reporting member counts, passed 325 million paid memberships in the fourth quarter and split each share into ten on 14 November 3620.

On 4 December 2025 Netflix agreed to buy Warner Bros Discovery's studios and streaming business, including HBO Max 2. On 27 February 2026 Warner Bros ended the deal for a rival offer from Paramount Skydance, which paid Netflix a $2.8 billion termination fee 72. Netflix said the studio "would have been a nice accelerant for our strategy, but only at the right price" 5.

The streaming service

Netflix sells monthly memberships to a streaming service of series, films, games and live events, and it reports as one business segment 3. Plan prices ran from the US dollar equivalent of $1 to $37 a month on 30 September 2026, depending on the country 2.

In the United States, prices rose in March 2026 to $8.99 a month for Standard with ads, $19.99 for Standard and $26.99 for Premium, BGR reported 21. Netflix said member response to its 2026 price changes matched earlier rounds and its expectations 1.

Tom's Guide gave Netflix an overall B- in its 2026 report card, praising the original shows but faulting the films and the "increasingly expensive ad-free tiers" 22. Engadget's guide says "no one offers more high-quality content at a single price than Netflix" 23.

Advertising

The cheaper plan with ads drew over 60 percent of sign-ups in its ad countries in the first quarter, and Netflix now works with over 4,000 advertisers 5. Ad revenue grew by $864 million in the first nine months of 2026 2.

Netflix builds its own ad technology, the Netflix Ads Suite, and in the third quarter added partnerships with MercadoLibre in Latin America and AdForm in Europe 1.

Live events, games and new formats

Live events are a small part of viewing but a lever for sign-ups: the company expects them to take just over 5 percent of 2026 content spending and about 1 percent of viewing hours 4. It says live events made six of the ten best sign-up days of the last five years 4.

Tom's Guide counts weekly WWE Raw, NFL games, boxing and the service's first live baseball events in 2026 22. In games, Netflix focuses on narrative, party and puzzle, mainstream and children's titles, and it launched a games app for young children, Netflix Playground 5.

The service has added video podcasts and shows from online creators such as Ms. Rachel 4. Since this summer French members also get the channels and on-demand shows of the broadcaster TF1 at no extra cost 41.

Shows, films and what they cost

Content is the main cost: Netflix wrote off $12.8 billion of content as amortization in the first nine months of 2026, and it had $25.2 billion of content commitments on 30 September 1. Amortization spreads what a title cost over the years it is watched 1.

Non-English titles now make up more than a third of viewing, up from under 10 percent a decade ago 1. Third-quarter hits included The Last House with 91 million views and Facing El Chapo with 58 million 1.

Where the revenue comes from

In the third quarter the United States and Canada brought in $5.6 billion, Europe, the Middle East and Africa $4.1 billion, Latin America $1.6 billion and Asia-Pacific $1.5 billion 1. About 57 percent of revenue in the first nine months of 2026 came in currencies other than the dollar 2.

India is a growth example the company points to: viewing hours there grew 24 percent and revenue about 18 percent at steady exchange rates in the third quarter 1.

Rivals

Netflix competes for free time with YouTube, other streamers, pay television, video games and social media, its annual report says 3. In Nielsen's August 2026 Gauge, YouTube took 15.8 percent of television viewing in the United States and Netflix 7.7 percent, Tubefilter reported 24.

Streaming guide JustWatch puts Netflix's share of the streaming market at 19 percent, ahead of Prime Video and Disney+, AP reported 8. Paramount's purchase of Warner Bros Discovery, closed in October, put HBO Max and Paramount+ under one owner 8.

People and places

Ted Sarandos and Greg Peters run Netflix as co-chief executives, with Spencer Neumann as finance chief 31. Founder Reed Hastings left the board at the June 2026 annual meeting, having chosen not to stand again 1718.

Netflix had about 16,000 full-time employees at the end of 2025, 68 percent of them in the United States and Canada 3. It leases its main offices in Los Gatos and Los Angeles, California, and owns and leases production space around the world 3.

Problems on file

In Brazil, Netflix booked about $619 million in the third quarter of 2025 for disputed non-income taxes, which pulled that quarter's margin down 32. The quarterly report lists no lawsuit the company considers material, and no change to its risk factors 2.

The umbrella, in words

Netflix, Inc. owns all of each significant subsidiary its annual report lists, among them Netflix International in the Netherlands, Netflix Studios and Netflix Worldwide Entertainment in the United States 15. The list also names service companies in France, the United Kingdom, Germany, Mexico and Singapore, and leaves out smaller ones 15.

The quarterly report records a cash acquisition of about $587 million in March 2026, without naming it 2. That month Netflix announced it had bought InterPositive, an AI filmmaking tools company founded by Ben Affleck, who became a senior adviser, NewsNation reported 25.

Netflix has one class of common stock, listed on Nasdaq 3. Its April 2026 proxy names three holders above 5 percent: The Vanguard Group with 8.65 percent, BlackRock with 7.34 percent and FMR with 5.29 percent, from their Schedule 13G filings 16. Directors and officers together held 1.24 percent 16.

For the fourth quarter of 2026 Netflix expects revenue of $13.4 billion, up 12 percent, and an operating margin of 26.0 percent after the layoff costs 1. For the year it expects revenue of $51.1 billion, up 13 percent, and a margin of 31.5 percent against 29.5 percent in 2025 1.

It expects free cash flow of about $12.0 billion for 2026, meaning cash from operations less spending on property and equipment 1. That is down from $12.5 billion because it expects a real estate deal to close in the fourth quarter 1.

The company expects content amortization to rise about 10 percent in 2026, and cash spent on content to run about 1.1 times amortization 41.

Netflix plans to bring its ad plan to 15 new countries in 2027, starting in March with nine in Europe, the Middle East and Africa, plus Colombia, Peru and New Zealand 1.

The year-end slate includes the film The Further Mis-Adventures of Cliff Booth, the final season of Emily in Paris, three NFL games and the Tyson Fury and Anthony Joshua fight 1. A new Disney licensing deal brings all five Ice Age films ahead of Disney's next one in theatres in February 2027 1.

A $1 billion bond matures in November 2026, and on 22 July Netflix sold $1 billion of 5.250 percent notes due 2036, saying it would use the money to repay it 192.

The company said in July that it is adding lifestyle videos from Condé Nast, Hearst and People, more cloud TV games and more shows from online creators such as the Stokes Twins 4.

The company says it puts reinvestment first, including "selective M&A", then returns spare cash through repurchases, with $22.3 billion of authorization left 1. For 2026 it also listed product work such as live voting, recommendations that respond to moods and vertical video on phones 6.