Netflix lowered its 2026 advertising-revenue forecast to about $2.7 billion, from about $3 billion, in its October 20 shareholder letter. The company cited a slightly slower-than-expected rollout of some advertising-product capabilities.
Why Netflix lowered its ad forecast
The revised figure is Netflix’s forecast for advertising revenue in 2026. The company said subscription revenue growth had outperformed expectations, even as some advertising-product capabilities rolled out more slowly than planned.
How the ad target fits Netflix’s wider outlook
For 2026, Netflix projected $51.1 billion in total revenue, up 13% year over year, and a 31.5% operating margin, the share of revenue left after operating costs. The company said its updated revenue outlook was 0.2% below the midpoint of its previous forecast range.
Netflix reported third-quarter revenue of $12.874 billion for the three months ended September 30, 2026, up 11.8% year over year. Its operating margin was 34.6%, compared with 28.2% in the third quarter of 2025.
Netflix’s workforce-related margin estimates
Netflix estimated that its recently announced headcount reductions would lower its fourth-quarter operating margin by about 120 basis points and its full-year 2026 margin by about 30 basis points. A basis point is one-hundredth of a percentage point. The company’s fourth-quarter margin forecast was 26.0%.
NeoTeo previously covered the reported plan for Netflix job cuts.
