Originally published: 15 October 2026 | Last updated: 21 October 2026 This article has been substantially updated to include Netflix’s Q3 financial results, revised advertising forecast and senior leadership changes.
Netflix is still making more money than it was a year ago. But its latest financial results have arrived at an awkward moment: advertising is falling short of the company’s earlier ambitions, around 1,000 jobs are being cut and two of the executives responsible for what viewers watch are leaving.
On Tuesday 20 October, Netflix reduced its forecast for 2026 advertising revenue from about $3bn to $2.7bn. Third-quarter revenue and profit both increased, although sales growth has slowed to its weakest pace in almost three years. The figures landed just days after a major shake-up of the company’s film and television leadership.
It is a striking combination for a business that remains highly profitable. The pressure is not simply to attract paying members, but to persuade them to keep watching — and to make its growing advertising business deliver what investors expect.
Netflix’s profits are rising, so why the weaker outlook?
Netflix brought in $12.87bn in revenue during the third quarter of 2026, up 11.8% from the same period last year. Net profit climbed almost 44% to $3.66bn, while operating margin increased from 28.2% to 34.6%. There is no suggestion here of a company suddenly struggling to turn a profit.
The difficulty is the pace of growth. Revenue is rising more slowly than it has for nearly three years, and expectations for the months ahead are less buoyant. Netflix’s shares fell in after-hours trading after the results were published, despite the stronger quarterly profit. Reuters reported that the company’s fourth-quarter earnings forecast missed analysts’ expectations.
Netflix now expects approximately $2.7bn in advertising revenue across 2026, compared with its previous estimate of around $3bn. Executives attributed part of that reduction to some advertising product features taking longer to launch than planned. That is an explanation of the forecast change, not evidence that advertisers are abandoning the service.
Its full-year revenue forecast remains around $51.1bn, representing expected annual growth of about 13%. For the fourth quarter, Netflix projects revenue of $13.44bn and net income of roughly $2.79bn. It expects earnings of 67 cents per share, below the 73 cents analysts had been forecasting. These are projections for a quarter that has not finished, rather than results already achieved.
A week of job losses and departures at the top
The financial announcement followed a difficult seven days inside Netflix. On 14 October, co-chief executives Ted Sarandos and Greg Peters told staff the company planned to cut roughly 1,000 jobs — about 6% of its workforce and its largest round of redundancies since 2022. Most of the affected roles are in product, technology, legal and human resources, according to an internal memo reported by Reuters. Netflix employed around 16,000 full-time staff at the end of 2025.
The following day brought another significant change. Netflix announced on 15 October that Peter Rice would become Chief Content Officer on 26 October, replacing Bela Bajaria after nearly a decade at the company. Bajaria had led its global content operation since 2023, overseeing a vast slate of films, television, unscripted programming and live entertainment.
Rice has held senior roles at Fox and Disney, including chairman of Walt Disney Television. His new position puts him in charge of Netflix’s film, scripted and unscripted television, live events and other content operations worldwide. It is one of the most influential creative jobs in streaming, particularly while Netflix is under pressure to give viewers more reasons to open the app.
On 19 October, news followed that film chief Dan Lin was leaving. Lin had led the film division since 2024. Rice is expected to oversee films temporarily until Netflix appoints a permanent replacement, meaning the incoming content chief will inherit an unusually broad brief from his first day.
The timing connects the announcements, but the reasons should not be muddled. Netflix has not established that its lower advertising forecast caused either executive departure or the workforce reductions. The company has described the job cuts as part of a decision to concentrate resources on its priorities.
Netflix is fighting for time, not just subscriptions
The battle for attention has changed. Disney+ and Prime Video compete directly for subscription money, while YouTube, TikTok and free streaming services compete for the same spare hours. Someone can keep paying for Netflix and still spend less of the week watching it. That is a problem for a service trying to grow both viewing time and advertising income.
Netflix has been developing ad-supported plans, live programming and games alongside its traditional film and television catalogue. Advertising gives the company another way to earn from each household, but the cheaper plan only becomes more valuable to its business if it can attract audiences and make its advertising tools work for the brands buying space on the platform.
The attraction of lower-cost, ad-funded viewing is clear from the wider market. A Roku survey of UK streaming habits found that advertising-supported viewing accounted for a substantial share of television time among its respondents. It is useful context, although those survey figures are not a measurement of Netflix’s own advertising audience.
Netflix’s response will not be judged on advertising software alone. Its programmes still have to be good enough to pull people back, week after week. Sarandos acknowledged after the results that the company could improve its content offering. Bringing in new creative leadership raises expectations, but an appointment on its own cannot guarantee better films or more hit series.
Will UK Netflix viewers notice a difference?
Nothing announced during the restructuring or the third-quarter results introduces a new UK subscription price, removes a particular plan or confirms the cancellation of a film or series. Netflix has already made a separate change to UK prices in September; it would be misleading to treat that earlier increase as a consequence of this month’s job cuts.
There are unanswered questions, especially about future commissioning. Rice will have a say in which projects go ahead and where Netflix directs its production spending, but the company has not published a list of programmes affected by his appointment. Nor has it provided a country-by-country breakdown of the redundancies.
Competition is unlikely to ease in the meantime. The Paramount–Warner Bros. Discovery merger has brought another large film and television catalogue under one owner. For households juggling several streaming subscriptions, the question remains which services are worth keeping each month. Netflix’s corporate changes do not answer that for them.
What happens next?
Rice is due to take over as Chief Content Officer on 26 October, initially including responsibility for the film division. The immediate business tests are whether Netflix can deliver the remaining advertising features on schedule, sustain subscriber interest and meet the final-quarter forecasts it has just set out.
Those targets will take time to assess. The third-quarter profits are real; the full-year advertising figure and fourth-quarter earnings are still predictions. The effects on particular productions, staff in the UK and the viewing experience will need separate confirmation rather than assumptions drawn from a financial report.
Tech Torque Verdict
Netflix is not short of cash or subscribers’ attention overnight. It is a profitable streaming giant discovering that keeping people engaged — and turning that engagement into a larger advertising business — is becoming harder work. Cutting the ad forecast by $300m matters precisely because the company had been counting on that part of the business to grow.
The job losses are already a serious consequence for employees. Whether Peter Rice can sharpen Netflix’s film and television slate is a question for the months ahead, not something the latest earnings can settle. For viewers, the sensible response is to judge Netflix by its programmes and the price of a subscription, rather than assume the boardroom upheaval will immediately change what appears on screen.
