Netflix grew revenue 12% year over year to $12.9 billion in Q3, with growth driven primarily by subscriptions, pricing, advertising and a favorable impact from foreign exchange rates, according to an earnings statement.
However, the streaming giant lowered its revenue guidance for 2026 to $51.1 billion, or growth of 13%, with ad revenue now expected to come in at approximately $2.7 billion for the year rather than the $3 billion previously forecast.
“We set big growth targets for our ads business this year. We established an aggressive product road map that was consistent with that strategy… but we are currently a bit behind our aggressive target for the year,” Co-CEO Greg Peters said on an earnings call, noting that Netflix’s ad business is growing over 80% this year.
The company in the quarter continued to invest in its Netflix Ads Suite, extending programmatic access to ad inventory through global connected TV marketplace deals and expanding its tools around targeting and measurement, but delays in the rollouts and integrations for some new ads products has dragged on the ad business. Netflix’s priorities for its ad business remain unchanged, executives said.
“We want to advance our full-funnel optimization solutions. We want to deliver new ad formats, new ad products. We want to increase the availability of our first-party measurement and reporting,” Peters said. “General demand remains strong, breadth of advertisers continues to expand, and ultimately, advertisers want our new products and features, and that's a big mechanism of growth for us.”
Netflix will extend its ads plan to 15 new countries, with Austria, Belgium, Colombia, Denmark, Ireland, the Netherlands, Norway, Peru, Poland, Sweden and Switzerland joining in March 2027.
New capabilities, new growth
Ahead of its earnings report, Netflix on Oct. 20 also announced a handful of new ad suite capabilities. The company has enhanced its Conversion API and built a new Netflix Pixel that will allow advertisers to test first-party measurement solutions and build audience segments based on conversion data.
Advertisers next month will be able to activate any third-party data partner or leverage their own first-party audiences with The Trade Desk audiences now available across ads on Netflix. The new partnership builds on previous tie-ups with Yahoo DSP and Amazon Ads Agent that opened additional audience targeting on the streamer. Netflix will also roll out in-DSP measurement with Yahoo and The Trade Desk.
Netflix’s earnings and ad suite announcements come after the company laid off about 6% of its workforce, including top executives including Chief Content Officer Bela Bajaria.
"When a company makes big layoffs and changes key leadership, it doesn’t exactly scream things are going 'honky-dory,’” Mike Proulx, vice president and research director at Forrester, said in emailed comments.
“While Netflix is growing, the pace of growth is slowing. That’s a wake-up call for the company that once defined the streaming market and is now in need of growth reacceleration. And now there’s even more reason to question just how much of that growth can come from advertising given the company just lowered its 2026 ad revenue forecast by 10%,” Proulx added.
With a core business that remains delivering streaming TV, film and live events, monetized via subscriptions and advertising, Netflix will need to continue to work to connect those consumer experiences and engagements, according to Julie Clark, the senior vice president of diversified markets, media and entertainment at TransUnion.
“That unified view, tied to measurable outcomes, is what will determine whether Netflix can give advertisers the confidence to keep increasing their investment,” the executive said in emailed comments.
