Netflix Shares Decline Following Third Quarter Earnings Despite Rising Profits
Netflix (NFLX) shares experienced a significant decline following its third-quarter earnings report, dropping approximately 6% in after-hours trading to around $65. While the stock is on track for its worst calendar year since 2022, the company's underlying fundamentals show improved profitability compared to previous downturns. Third-quarter revenue rose 12% year-over-year to $12.9 billion, and operating income surged by 37%, driven by an expanded operating margin of 34.6%. Despite strong earnings per share growth of 49%, investors are reacting to cooling revenue growth and a downward revision in advertising revenue projections for 2026. Management lowered ad revenue expectations to $2.7 billion due to slower-than-planned feature rollouts. Additionally, while the company executed its largest-ever share buyback program this quarter, slowing growth in the mature U.S. and Canada market remains a primary concern for long-term expansion.
Tickers: $NFLX
Topics: earnings report operating margin revenue growth share buybacks stock price movement
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