Netflix shares fell 4% to $63.54 in afternoon trading, even though the company beat Q3 2026 earnings expectations with GAAP EPS of $0.87. Revenue matched estimates, but full-year revenue guidance landed at the low end of the outlook and slightly below consensus, and the 2026 advertising revenue forecast was cut to $2.7 billion from $3 billion. The main worry is engagement: Netflix reported no growth in watch hours for the quarter, and co-CEOs Greg Peters and Ted Sarandos acknowledged the need for better execution in the U.S. Supporters point to improved churn and $4.8 billion of Q3 repurchases funded by free cash flow, while the Q4 2026 content slate is seen as the next test. The company also trimmed its full-year free cash flow outlook to $12 billion from $12.5 billion due to a Q4 real estate transaction.
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