Netflix Cuts 2026 Ad Revenue Forecast by $300 Million, Stock Hits 2-Year Low

Netflix stock fell more than 6.4% to $64.23 in premarket trading after the company cut its full-year 2026 ad revenue forecast by $300 million, to roughly $2.7 billion from the $3 billion it had previously projected. That 10% reduction drove shares of Netflix Inc. (Nasdaq: NFLX) to their lowest level since August 2024.

The drop followed the company's Q3 2026 earnings report, released yesterday. The numbers themselves weren't the problem. Revenue totaled $12.87 billion, up 11.8% year over year, and diluted earnings per share reached 87 cents — beating Wall Street's EPS expectations by five cents, according to CNBC. Netflix hit the revenue target investors were expecting, at nearly $12.9 billion.

The guidance was what spooked the market.

What did Netflix project?

For the fourth quarter, Netflix guided to revenue of about $13.44 billion, or roughly 11.5% growth. Wall Street wanted $13.51 billion, as TipRanks noted. The miss is small, but it compounds a bigger one.

For full fiscal 2026, Netflix now expects $51.1 billion in revenue — about 13% year-over-year growth, but on the lower end of the $51.0 to $51.4 billion range it had previously forecast.

The sharpest cut hit the ad business. Netflix now expects full-year 2026 ad revenue of around $2.7 billion — $300 million, or 10%, below its prior $3 billion forecast.

The key numbers at a glance:

• Q3 2026 revenue: $12.87 billion, up 11.8% year over year
• Q3 diluted EPS: 87 cents, five cents above expectations
• Q4 revenue guidance: $13.44 billion vs. $13.51 billion Wall Street consensus
• Full-year 2026 revenue guidance: $51.1 billion, up about 13%
• Full-year 2026 ad revenue: $2.7 billion, cut from $3 billion

Why does the ad forecast matter so much?

Netflix has spent years raising prices on ad-free subscriptions. The strategy, as the company sees it: higher ad-free prices push cost-conscious subscribers toward cheaper, ad-supported tiers rather than out the door. Netflix earns less up front from those subscribers, but expects to make more per user over time by serving them ads.

Nearly every major streaming service has introduced ad-supported tiers in recent years, and investors have loaded their revenue growth expectations onto them. That's exactly why a 10% cut to the ad forecast hit the stock so hard.

Co-CEO Greg Peters pointed to delayed product rollouts as a primary cause.

"[S]pecifically in this case, we've seen some delays in the rollout and partner integrations for some of those new ads products," Peters said on the company's financial call, according to a PitchBook transcript. "So getting to the integration model that we want sometimes takes a bit more work with our partners, but we strongly believe that a modest short-term hit for a better long-term strategic position is a good ultimate tradeoff."

Peters argued the slower rollout won't affect long-term gains. Investors, though, tend to think in quarters — and the reduced ad forecast dragged the stock down with it.

How have NFLX shares reacted?

The premarket decline to $64.23 marks an ignominious milestone: Netflix's share price hasn't traded this low since August 2024, more than two years ago. The fall came after shares closed down 1.66% yesterday at $68.69.

The damage predates this report. Even before today's 6.4% drop, Netflix stock was down more than 26% for the year. Over the past 12 months, it has declined a staggering 44.5% as of yesterday's close, per Yahoo Finance data.

Where the stock goes next is anyone's guess, but the ad business will be the number investors watch. Peters says he has faith in it.

"[U]ltimately, advertisers want our new products and features, and that's a big mechanism of growth for us," he told analysts on yesterday's call. "So we are very focused on getting those out to them as quickly as we possibly can."

By Grace Kim