10-Q · July 17, 2026
Netflix delivered solid Q2 growth, with revenue up 13% to $12.560B and operating income up 11% to $4.193B; every geographic region grew at least 10%. Gross margin was approximately 52.0%, roughly flat year over year,…
Earnings analysis · 10-Q
NFLX earnings analysis
Filed October 21, 2026 · Our reading of the company's report
The latest report
Netflix delivered solid Q3 operating performance, with revenue of $12.874 billion, operating margin of 34.6%, diluted EPS of $0.87 and free cash flow of $2.884 billion. Margins, EPS and cash flow improved both year over…
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Netflix delivered solid Q3 operating performance, with revenue of $12.874 billion, operating margin of 34.6%, diluted EPS of $0.87 and free cash flow of $2.884 billion. Margins, EPS and cash flow improved both year over year and sequentially, but the outlook was weakened by reductions in full-year free-cash-flow guidance to approximately $12.0 billion and advertising-revenue expectations to approximately $2.7 billion. The balance sheet carries $15.3 billion of debt and remains exposed to foreign-currency volatility, with non-U.S.-dollar currencies representing 57% of nine-month revenue.
Gross and operating margin
How much of each revenue dollar the business keeps.
One point per quarterly or annual filing. Both margins are shares of that report's revenue.
How we read each report
Our analysis across the last few reports.
Our model's reading of each filing, not the share price or the market's reaction. Annual and quarterly reports each occupy one position.
Reported figures
- Earnings per share
- $0.87
- Operating margin
- 34.6%
What stood out
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Revenue growth remained solid
Revenue was $12.874 billion, up approximately 11.8% from $11.51 billion in Q3 2025 and 2.5% from $12.56 billion in Q2 2026.
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Operating margin expanded sharply
Operating margin expanded to 34.6% from 28.2% year over year, a 6.4-percentage-point improvement, and increased from 33.4% sequentially.
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EPS improved year over year
Diluted EPS was $0.87, versus $0.59 in Q3 2025 and $0.80 in Q2 2026, representing year-over-year and sequential improvement.
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Free cash flow recovered
Free cash flow was $2.884 billion, up from $2.66 billion in Q3 2025 and $1.53 billion in Q2 2026.
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Share repurchases remained substantial
Netflix repurchased 63,917,979 shares during the quarter; monthly average prices were $72.45 in July, $77.00 in August and $75.79 in September.
What to watch
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Lowered cash-flow and ad outlook
Full-year free-cash-flow guidance was reduced to approximately $12.0 billion from $12.5 billion, while advertising-revenue expectations declined to approximately $2.7 billion from $3.0 billion.
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Interest-rate exposure remains
As of September 30, 2026, debt was $15.3 billion across 13 fixed-rate tranches; $2.4 billion was converted to floating-rate exposure through interest-rate swaps, with a 1% SOFR increase estimated to raise annual interest expense by approximately $24 million.
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Foreign-exchange volatility
Foreign-currency exposure is material: non-U.S.-dollar currencies represented 57% of revenue and 30% of operating expenses for the nine months ended September 30, 2026. Reported revenue was approximately $506 million higher than it would have been on a constant-currency basis.
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No formal risk-factor changes
The filing states that there were no material changes to the risk factors previously disclosed in the 2025 Form 10-K; however, a 10% adverse exchange-rate move would have reduced income before taxes by approximately $76 million as of September 30, 2026.
Management's outlook
The quantitative outlook cited with the filing calls for Q4 2026 revenue of approximately $13.442 billion and diluted EPS of $0.67. Full-year 2026 revenue guidance is $51.1 billion and operating-margin guidance is 31.5%; full-year free-cash-flow guidance was reduced to approximately $12.0 billion from $12.5 billion, while advertising-revenue expectations declined to approximately $2.7 billion from $3.0 billion.
Earlier filings 4
10-Q · April 17, 2026
Netflix reported Q1 revenue of $12,249,757,000, up $1,706,956,000 (≈16.2%) versus Q1 2025, with gross margin expanding to 51.9% and operating margin to 32.3%. Net income rose to $5,282,791,000 and diluted EPS was $1.23;…
10-K · January 23, 2026
Netflix’s 2025 results show continued topline expansion with quarterly revenues peaking at $12.05B in 2025Q4 and full-year revenue of $45.18B (sum of quarters). Free cash flow improved materially to $9.46B in 2025 (sum…
10-Q · October 22, 2025
Netflix reported Q3 revenue of $11,510,307 (in thousands) and diluted EPS of $5.87 for the three months ended September 30, 2025. Revenue, operating income and net income all rose vs. the year-ago quarter, but gross and…
This is our reading of a public filing, not the filing itself. Analysis can contain errors; check the source document for full context.