Netflix Q3 revenue rises 12% to $12.9B, shares drop 5% after hours

Netflix shares fell 5.1% in after-hours trading on October 20, 2026, as investors reacted to the company's third-quarter earnings report. The stock closed the regular session at $68.66, down 1.70%, before the post-market decline widened following the release of financial results.

The company reported that Q3 revenue increased 12% year over year to $12.9 billion. Diluted earnings per share rose from $0.59 to $0.87. Netflix stated that it outperformed all metrics for which it provides quarterly guidance, noting that profit surprises were larger than revenue surprises.

Despite the strong current quarter, management's guidance for the fourth quarter indicated slower year-over-year sales growth and lower profits. The source attributes the reduced Q4 margins to seasonal effects and impairment costs associated with recently announced job cuts.

During the regular trading session, Netflix trading volume came in about 47% above its three-month average. The broader market showed mixed results, with the S&P 500 closing at 7,711, up 0.26%, and the Nasdaq Composite finishing at 26,425, down 0.02%. In the entertainment streaming sector, Walt Disney closed at $111.65, up 1.88%, while Amazon.com closed at $262.63, up 0.07%. Netflix's performance trailed these industry peers during the regular session.

A Motley Fool contributor noted that they viewed the stock as undervalued prior to the report but now see an additional discount added to existing rebates. The contributor expects the business reorganization to provide long-term benefits despite the short-term headwinds.