Netflix profit up 44% but shares fall on ad revenue concerns
Summarised from 2 outlets · Updated 20 Oct, 23:32 · Archive
Netflix's third-quarter profit rose 44 per cent to $US3.66 billion, beating Wall Street expectations, but the company lowered ad sales guidance.
Netflix posted third-quarter profit of $US3.66 billion, or 87 cents per share, for the July-September period, up 44 per cent from $US2.55 billion a year earlier. Revenue rose 12 per cent to $US12.87 billion from $US11.51 billion. The results exceeded analyst forecasts of 82 cents per share on revenue of $US12.87 billion.
Despite beating expectations, investors sent Netflix shares down after the company lowered its ad sales guidance, prompting concerns about slowing revenue growth. Emarketer senior analyst Ross Benes said the reduced ad business estimate was concerning as Netflix seeks alternative revenue beyond subscriptions. He noted that revamping content strategy alone would not fix the challenge.
Last week, Netflix announced plans to lay off about six per cent of its workforce, nearly 1,000 positions, as part of wider organisational changes. At the end of 2025, the company had about 16,000 full-time employees worldwide. The layoffs mark the largest round of cuts in years. Netflix also announced that Peter Rice will replace Chief Content Officer Bela Bajaria, who spent nearly a decade at the company. Rice will lead Netflix's global content organisation from Monday.
How it is being reported
- Netflix revenue and profit grows in third quarterUS streaming service Netflix's profit has increased 44 per cent for the third quarter, above Wall Street's expectations.The West Australian · 20 Oct, 23:15
- Netflix revenue and profit grows in third quarterUS streaming service Netflix's profit has increased 44 per cent for the third quarter, above Wall Street's expectations.Perth Now · 20 Oct, 23:15
In this story: Netflix · Los Gatos · California · Peter Rice · Bela Bajaria · Ross Benes · Emarketer · FactSet
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