NFLX US S&P 500NASDAQ-100Russell 1000 Earnings call · transcribed from the recording
Netflix (NFLX) · Q3 2026 results and valuation
Share price: $64.54 · 2026-11-11
Netflix provides streaming entertainment services, including TV series, films, games, and live programming. The company operates globally and generates revenue from monthly membership fees from its members. Source: 10-K annual report (2026-01-23)
Results Q3 2026 vs Q2 2026 · previous quarter · published 20 Oct 2026 and 16 Jul 2026
Net income up 7.7% on the previous quarter. The language turned more upbeat.
1 · Numbers
+7.7%
Net income vs Q2 2026
Outlook given
Net income 3.66B vs 3.40B
Revenue +2.5%
Why Against the same quarter last year (+43.9%), net income rose because all three revenue levers—member growth, pricing, and ads—were working and contributing to nearly 20% year-over-year revenue growth.
2 · How management spoke
More upbeat
Language tone vs last period
Language: typical — more upbeat than in Q2 2026.
3 · What stood out
Netflix reported that view hours in India grew 24% on an absolute basis in Q3.
Valuation
Is Netflix undervalued?
Reverse DCF. Free cash flow from the last full fiscal year (2025-12-31), grown for 10 years, discounted back, plus a terminal value. “Implied growth” is the rate the current price assumes.
At 12.6% growth a year (3-year revenue growth), the model's fair value is $64.07 a share — the stock trades 1% above it. Today's price assumes 12.7% growth a year.
Current price
$64.54
close of 2026-11-11
Market implies growth of iThe yearly free-cash-flow growth, for the next 10 years, that today’s share price already assumes. If you believe the company grows faster than this, the stock is cheap under this model; slower, and it is expensive.
+12.7% for 10 yrs
Fair value / share
$64.07
Buy below
$48.05
Price vs fair value
Overvalued 1%
Price vs buy-below price
Overvalued 34%
Read between the lines
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Figure
Revenue increased on a per-member basis to drive membership and achieve nearly 20% year-over-year revenue growth.
Source quote
“They were also up on a per-member basis, all of which drives membership, it drove membership, and nearly 20% year-over-year revenue growth.”
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Key theme
Member response to price changes across all market types remained consistent with prior price changes and company expectations while engagement remained unaffected.
Source quote
“So across all market types where we've done price changes, the member response, you mentioned churning, engagement. Engagement usually isn't really impacted by these things, but that member response is consistent with prior price changes and our expectations.”
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Guidance
Netflix reported better than forecast results due to continued healthy retention in every region, churn globally, and U.S. performance that improved year over year.
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Guidance
Netflix expects member growth to be the most significant driver of overall revenue growth in certain countries.
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Figure
Growth in 2026 is driven by all three revenue levers—member growth, pricing, and ads—working and contributing to the company's performance.
Source quote
“We're delivering strong growth in 2026 to start with, and that's because all three revenue levers that we have, they're working and they're contributing. That's member growth, pricing, and ads.”
1 more
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Figure
Netflix grew its ads business over 80% this year, indicating continued growth for the advertising segment.
Source quote
“We're still growing, just to set the context or put this in perspective, we're still growing our ads business over 80% this year.”
Tone
How upbeat the language was, compared with other companiesiTone counts positive minus negative finance words, adjusted for length. Executives mostly speak positively, so the labels compare each call with every company's latest call: “typical” is the middle third, “very upbeat” the top tenth, “cautious” the bottom tenth.. Dot: Q3 2026. Ring: Q2 2026.
Typical — more upbeat than in Q2 2026.
Sentences that drove the tone
“But as we did note in our letter, that work, that hard work that Greg walked through, that prioritization ensures that we can continue to invest aggressively into the highest...”
“And the reason it's a win-win deal is that we benefit by expanding the entertainment offering for sure.”
“And then since that launch point, we've been committed to building an innovative advertising platform, differentiated offering for our clients, bringing the best of digital advertising to the best of...”
Full figures
USD · SEC EDGAR XBRL (10-Q, period end 2026-09-30)
| Metric | Q3 2026period end 2026-09-30 | Q2 2026period end 2026-06-30 | Change | Q3 2025 | YoY |
|---|---|---|---|---|---|
| Revenue | 12.87B | 12.56B | +2.5% | 11.51B | +11.8% |
| Gross profit | 6.80B | 6.52B | +4.2% | 5.35B | +27.1% |
| Operating income | 4.46B | 4.19B | +6.3% | 3.25B | +37.3% |
| Net income | 3.66B | 3.40B | +7.7% | 2.55B | +43.9% |
| EPS | 0.87 | 0.80 | +8.7% | 0.59 | +47.5% |
| P/E today 18.3 | 20.1 | 22.5 | −2.4 | 12-mo loss | — |
Topics
Most discussed now
- Even with modest view hour growth, the modest view hour growth that Netflix is delivering, it is delivering that increasing value to...
- New She also did the hard work of building this incredible international team who's been making local for local content around...
- New There's no change to Netflix's philosophy of obviously investing in its business to drive that growth an innovation and also...
- Differentiated, exclusive, ambitious, professionally produced series and films and live events.
- Netflix's local titles from those regions are driving engagement and they're driving business growth.
Faded since Q2 2026
- Fading World Baseball Classic is like these other big live events, they behave a lot like Netflix's returning seasons of its...
- Dropped Netflix is making higher quality output more quickly and efficiently than it could have using traditional methods.
- Dropped There is no change to Netflix's capital allocation philosophy.
- Fading The Q3 revenue drivers are very similar to Q2.
Latest announcements
Official filings, newest first. Summaries are generated from each filing and its attachment; every figure is checked against the source.
- Results of operations · SEC 8-K
- Director or officer change · SEC 8-K
Anne Sweeney resigned from the Board of Directors of Netflix, Inc. effective July 26, 2026, with no reported disagreement with the company.
- Other events · SEC 8-K
Netflix, Inc. completed a registered public offering of $1 billion in principal amount of 5.250% senior unsecured notes due 2036 on July 22, 2026.
- Results of operations · SEC 8-K
Q2 revenue reached $12.6 billion, an increase of 13% year over year, with an operating margin of 33% and a diluted EPS of $0.80 compared to $0.72 in the same period last year.
- Shareholder vote results; Other events · SEC 8-K
Netflix, Inc. held its 2026 annual meeting where shareholders approved the appointment of Ernst & Young LLP as the independent registered public accounting firm and the executive officer compensation.
- Other events · SEC 8-K
On April 22, 2026, the Board authorized an additional $25 billion for common stock repurchases, following a previous program that had $6.8 billion available as of March 31, 2026.
- Results of operations; Director or officer change · SEC 8-K
Q1 revenue grew 16% year over year, while operating income grew 18% and diluted EPS increased from $0.66 to $1.23 compared to the same period last year.
- Agreement terminated · SEC 8-K
Netflix, Inc. reported the termination of a material definitive agreement regarding a merger with Warner Bros. Discovery, Inc. as of February 27, 2026.
Balance sheet & ownership
From SEC filings; short interest is FINRA data via Yahoo. Collected 2026-10-26.
Cash & runway
Cash & equivalents
$8.19B
2026-09-30
Short-term investments
$28.7M
total $8.22B
Implied runway
—
operating cash flow positive over the TTM window
Dilution
weighted-average basic shares, per quarter. Change: -2.6% YoY, -1.3% QoQ.
| Quarter | Shares |
|---|---|
| Q1 2025 | 4.27B |
| Q2 2025 | 4.25B |
| Q3 2025 | 4.24B |
| Q1 2026 | 4.22B |
| Q2 2026 | 4.19B |
| Q3 2026 | 4.13B |
Shares outstanding: 4.11B (2026-09-30)
Insider transactions
Form 4 open-market trades (codes S/P), trailing 12 months. Coverage: newest 50 of 189 filings; 50 filings parsed.
Sold by insiders
179.8K shares
$13.2M · 10 transactions
Bought by insiders
0 shares
0 transactions
Net direction
net selling
Catalyst calendar
management-stated targets — from the latest earnings call; plans, not promises.
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Q4
upcoming series and films in the U.S.
Source quote
“So coming from the U.S. in Q4, on series side, we're already off to a great start with limited series East of Eden.”
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2027
upcoming slate of content
Source quote
“And then moving to 2027, our slate includes Narnia.”
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Q4 slate
upcoming content slate
Source quote
“Now, there's a ton to be excited about in our Q4 slate and a ton to be excited about in 2027.”
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2026
delivering strong growth
Source quote
“We're delivering strong growth in 2026 to start with, and that's because all three revenue levers that we have, they're working and they're contributing.”
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into 2027
deliver strong revenue growth
Source quote
“And we expect to deliver strong revenue growth into 2027 as well with those same three levers.”