Netflix revenue rose 11.9% to $12.9 billion in Q3 as operating margin widened
Revenue grew 11.9% to $12.9 billion and operating margin reached 34.6%, from 28.2% a year earlier. Share buybacks rose to $4.8 billion.
Revenue
$12.9B
↑ 11.9% vs Q3 FY2025
Operating margin
34.6%
↑ 6.4 pts vs 28.2%
Net income
$3.7B
↑ 43.9% vs $2.5B
Free cash flow
$2.9B
↑ 8.4% vs $2.7B
Share buybacks
$4.8B
2.6 times vs $1.9B
Netflix's revenue grew 11.9% to $12.9 billion in the third quarter of 2026. Operating margin was 34.6%, up 6.4 points on the same quarter a year earlier. Net income rose 43.9% to $3.7 billion.
Revenue growth slowed, but stayed in double digits
Revenue of $12.9 billion was 11.9% above the third quarter of 2025. Growth was 17.2% a year ago and 13.4% in the second quarter of 2026. The company said the increase came primarily from $1,057 million of growth in subscription revenue, which it said reflects increases in memberships and pricing, and $256 million of growth in advertising revenue.
Operating margin widened as cost of revenues fell
Operating income was $4.5 billion, up 37.3%. Cost of revenues, which is mainly the amortization of content, fell 1.4% to $6.1 billion while revenue grew. Gross margin was 52.8%, against 46.4% a year earlier.
The company said the prior-year quarter included $619 million of expense for non-income tax assessments in Brazil. Content amortization was up $233 million in the quarter. Technology and development spending was $1.0 billion, up 21%, faster than revenue.
Cash flow and buybacks
Cash from operations was $3.2 billion and capital spending was $279 million, up from $165 million. Free cash flow, which is the first minus the second, was $2.9 billion, a free cash flow margin of 22.4%. Netflix repurchased $4.8 billion of its stock in the quarter, against $1.9 billion a year earlier. Diluted shares were 4,195 million, down 3.3% from a year earlier.
The first quarter of 2026 stands out in the charts. The company said its cash from operations for the nine months includes the receipt of a $2.8 billion termination fee after the WBD transaction ended in the first quarter of 2026.
What the company said about the rest of the year
In its earnings letter, Netflix said it expects, for 2026, revenue of $51.1B and an operating margin of 31.5%. This is the company's own statement, not our forecast.
Cash, debt and equity are at quarter end; other figures are for the three months. Total debt is the balance sheet's long-term debt plus its current debt line. Comparisons are with the same quarter a year earlier.
Sources: Form 10-Q, filing index, earnings release (Exhibit 99.1), EDGAR company facts. More figures for Netflix are on its company page.
Twelve quarters of figures
| Quarter | Q4 '23 | Q1 '24 | Q2 '24 | Q3 '24 | Q4 '24 | Q1 '25 | Q2 '25 | Q3 '25 | Q4 '25 | Q1 '26 | Q2 '26 | Q3 '26 |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Revenue | $8.8B | $9.4B | $9.6B | $9.8B | $10.2B | $10.5B | $11.1B | $11.5B | $12.1B | $12.2B | $12.6B | $12.9B |
| Revenue growth | 12.5% | 14.8% | 16.8% | 15.0% | 16.0% | 12.5% | 15.9% | 17.2% | 17.6% | 16.2% | 13.4% | 11.9% |
| Gross margin | 39.9% | 46.9% | 45.9% | 47.9% | 43.7% | 50.1% | 51.9% | 46.5% | 45.9% | 51.9% | 51.9% | 52.8% |
| Operating margin | 16.9% | 28.1% | 27.2% | 29.6% | 22.2% | 31.8% | 34.1% | 28.2% | 24.5% | 32.3% | 33.4% | 34.6% |
| Net income | $938M | $2.3B | $2.1B | $2.4B | $1.9B | $2.9B | $3.1B | $2.5B | $2.4B | $5.3B | $3.4B | $3.7B |
| Diluted EPS | $0.21 | $0.53 | $0.49 | $0.54 | $0.42 | $0.66 | $0.72 | $0.59 | $0.56 | $1.23 | $0.80 | $0.87 |
| Cash from operations | $1.7B | $2.2B | $1.3B | $2.3B | $1.5B | $2.8B | $2.4B | $2.8B | $2.1B | $5.3B | $1.7B | $3.2B |
| Capital expenditure | $81.6M | $75.7M | $78.3M | $127M | $159M | $128M | $156M | $165M | $239M | $196M | $219M | $279M |
| Free cash flow | $1.6B | $2.1B | $1.2B | $2.2B | $1.4B | $2.7B | $2.3B | $2.7B | $1.9B | $5.1B | $1.5B | $2.9B |
| Dividends and buybacks | $2.5B | $2.0B | $1.6B | $1.7B | $964M | $3.5B | $1.7B | $1.9B | $2.1B | $1.3B | $4.7B | $4.8B |
This story describes figures the company has published. It is for information only and is not investment advice or a recommendation to buy, sell or hold any security. Check the original filings before relying on any figure. Stoqly is not affiliated with the SEC or Netflix.
