Netflix shares sank to a two-year low after the streamer's third-quarter 2026 results showed slowing revenue growth and a cut to its advertising forecast. Variety reported the stock fell 7% in premarket trading on Wednesday, October 21 (US time), to under USD 64 a share, its lowest since August 2024 and down nearly 30% this year. It closed down 5.3% at USD 65.04.

Netflix now expects 2026 ad sales of USD 2.7 billion, USD 300 million less than its earlier forecast, because "some ad product capabilities" are rolling out more slowly than planned. Its fourth-quarter revenue guidance was also slightly below Wall Street expectations, Variety said.

The numbers

According to Vietnam+, third-quarter revenue rose 12% year on year to nearly USD 12.9 billion, the company's slowest quarterly growth in three years, while net profit jumped 44% to nearly USD 3.7 billion. Revenue in the US and Canada grew 11%, down from 17% a year earlier, and full-year revenue is expected to rise about 13%. Netflix has more than 325 million subscribers worldwide, Variety noted. Vietnam+, citing Nielsen, said Netflix took 7.8% of US TV viewing time in July, down 1% from a year before, while YouTube held more than 14%.

The engagement problem

Co-CEO Ted Sarandos argues the fix is better execution of the core model: more must-watch shows and films. He replaced content chief Bela Bajaria with Peter Rice last week, saying on the earnings call: "I know that we could do better."

Some analysts want more. New Street Research's Dan Salmon wrote on October 20 that investors should stay skeptical of a strategy that doubles down on premium TV, film and live events while Netflix "remains largely absent" from mobile and short-form video. Pivotal Research Group's Jeff Wlodarczak said short-form "is doing to streaming what streaming has done to traditional Pay TV" and cut his end-2026 price target by USD 5 to USD 65. More upbeat, MoffettNathanson's Robert Fishman kept a "buy" rating while lowering his target by USD 10 to USD 90, and Wedbush's Alicia Reese said Netflix "is in control", trimming her target from USD 90 to USD 80. These are analysts' views, not advice from KBVN+.

A turbulent week

  • October 15: KBVN+ reported Netflix was cutting about 1,000 jobs, or 6% of staff.
  • October 16: film chief Dan Lin was let go after two and a half years, Vietnam+ said.
  • October 20: Q3 results; shares fell more than 5% after hours.
  • October 21: shares hit a two-year low.

What comes next

Peter Rice is tasked with rebuilding ties with creative talent and reviewing the slate, Vietnam+ reported. Upcoming titles include David Fincher's "The Mis-Adventures of Cliff Booth" and Greta Gerwig's "Narnia: The Magician's Nephew", and Netflix is testing a 45-day cinema run for "La Bola Negra"; no release dates were given. More in Screen and Entertainment.