Netflix (NFLX) reported Q3 revenue of $12.9 billion (up 11.8% year over year), operating income of $4.5 billion (up 37.3%) and EPS of $0.87 (up 47.5%), but its Q4 revenue and earnings guidance fell short of analyst projections. The company also cut its full-year advertising revenue estimate by about $300 million from the previously expected $3 billion, citing a slower-than-expected rollout of some ad product capabilities, and the stock fell sharply after earnings to near its 52-week low. Management is not changing strategy and will rely on original content, especially in the U.S., and recently appointed Peter Rice, a former leader at Fox and Disney, as chief content officer. The article argues Netflix still has the largest streaming subscriber base in the industry, strong pricing power and viewer data, and can grow through live events and advertising, with its ad tier set to launch in 15 new countries in 2027. The author expects the company to address its execution problems over the medium term and says the stock may appeal to investors willing to stay the course.
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