Netflix reported a 12% year-on-year increase in revenue in the third quarter of 2026, supported by subscription growth, higher membership numbers, pricing changes, rising advertising revenue and favourable foreign exchange movements, net of hedging.
The streaming platform’s operating income grew 37% year on year to $4.5 billion, with its operating margin expanding to 34.6% from 28.2% in the corresponding quarter last year. Both metrics exceeded the company’s expectations, aided by the timing of expenses and revenue coming in slightly above forecasts.
Diluted earnings per share rose 49% to $0.87, compared with $0.59 in Q3 2025.
Despite the overall revenue growth, advertising continues to account for a relatively small share of Netflix’s business. The company has revised its full-year advertising revenue forecast downward from $3 billion to $2.7 billion, reflecting softer-than-expected growth in the segment.
Netflix expects to generate $51.1 billion in total revenue in 2026, which would place advertising at less than 6% of its overall revenue. Subscriptions remain the platform’s primary revenue driver.
India records highest-ever quarterly paid net additions
India delivered a strong performance for Netflix in Q3, with view hours increasing 24% year on year. View hours per member also registered growth in the low-to-mid single digits.
The quarter’s performance was supported by a diverse content slate, led by Lock Upp, Netflix’s first daily reality series, which recorded the highest viewership for any title on the platform in India to date.
Other notable performers included the scripted series Musafir Café, which garnered 9 million views in its first 91 days, and Operation Safed Sagar, which recorded 11 million views.
Netflix also introduced its first transaction-based loyalty bundle with Flipkart during the quarter. The combination of original programming and the partnership helped the platform achieve its largest-ever quarterly net additions of paid memberships in India.
Revenue from India grew approximately 18% year on year on a foreign-exchange-neutral basis.
However, Netflix acknowledged that accelerating viewership growth remains a priority. CFO Spencer Adam Neumann said the company wants viewing hours to grow faster and is “not satisfied” with the current pace. He added that the business continues to deliver healthy revenue growth despite relatively modest increases in viewing.
According to Neumann, Netflix’s growth is being driven by three key levers: membership additions, pricing and advertising. The company expects all three to contribute to growth in 2027.
India was highlighted as an example of how stronger engagement can translate into business performance, with the quarter’s content slate driving a 24% increase in view hours alongside nearly 20% revenue growth on an FX-neutral basis.
Netflix strengthens advertising technology and partnerships
Netflix is continuing to develop its advertising infrastructure through Netflix Ads Suite, expanding access for advertisers and improving measurement capabilities.
During Q3, the company broadened programmatic access through globally available connected TV marketplace deals. It also added partnerships with MercadoLibre in Latin America and Adform across Europe, the Middle East and Africa.
The platform is expanding its in-demand-side-platform (DSP) measurement capabilities, including tools for measuring reach, frequency and attribution.
Netflix plans to introduce its advertising-supported subscription tier in 15 additional countries in 2027. The first phase is scheduled for March and will cover nine countries in Europe, the Middle East and Africa, as well as Colombia, Peru and New Zealand.
Q4 revenue projected to grow 12%
For the fourth quarter of 2026, Netflix expects revenue to reach $13.4 billion, representing 12% year-on-year growth. It has projected an operating margin of 26%, compared with 24.5% in the same period last year.
The forecast factors in an approximately 120-basis-point negative impact from recently announced headcount reductions.
Beyond its original programming, Netflix is also looking to broaden its content offering through licensing agreements and partnerships with third-party content providers. Its partnership with French broadcaster TF1 is one example of the platform’s efforts to expand its entertainment catalogue.
