Netflix shares slide as Sarandos talks up Rice

Netflix posted a solid set of results for its much-talked about Q3 earnings report but shares still slumped 6% in after-hours trading as the streamer lowered its advertising revenue projection for the year.

The global streamer’s latest quarterly figures were being closely monitored around the world after the company cut 1,000 jobs last week – including that of content chief Bela Bajaria and film boss Dan Lin – as it attempts to improve engagement among subscribers.

Revenue rose almost 12% year-on-year to hit $12.9bn for the quarter, beating its own forecast of $12.8bn and Wall Street estimates, with the rise put down to subscription hikes, membership growth and rising ad revenues.

Profit was $3.7bn and earnings per share stood at $0.87 – again beating analysts’ estimates and marking a 49% increase year-on-year from $0.59 – but that did not stop investors from selling off Netflix shares.

The primary reason was that the streamer lowered its 2026 ad revenue forecast from around $3bn to $2.7bn “due to slightly slower than expected rollout of some ad product capabilities”.

Netflix still expects to hit a revenue target of $51.1bn for the full year, which would represent growth of 13% year-on-year, but slowing growth is impacting the company’s appeal to investors.

It has been a tumultuous 12 months for Netflix, whose share price has fallen almost 45% over the past 12 months to now stand at $64.45, a price that the streamer had first passed in 2021.

Praise & hopes heaped on Rice

In a subsequent earnings call, Netflix co-chief execs Greg Peters and Ted Sarandos talked up the streamer’s upcoming offering but suggested they expected bigger hits more frequently.

Peters talked up Netflix’s partnership with TF1 in France and said the company “certainly believes we can replicate similar results with other partners,” although no other deals have yet been revealed.

Sarandos, meanwhile, praised newly appointed chief content officer Peter Rice, who he said had been drafted in to ensure “better execution in the US”.

Sarandos said fundamental strategy shifts to content strategy were not expected in the wake of Bajaria’s departure, adding: “There’s a lot to be excited about, but I know we can do better.”

He continued: “I’ve known Peter for about 15 years, and the outpouring of excitement of him coming to Netflix from across the industry and from the creative community has been nothing short of overwhelming.”

He described former Fox and Disney exec Rice as “one of the really rare people in the industry who’s led TV networks, movie studios, streaming services”, and said the UK-born leader “understands” talent relations.

“In a competitive market where creative talent have choices of where they want to work, we want Netflix to always be the place that they love to do the best work of their life, and Peter is the exact right person to lead those efforts in the US and around the world,” Sarandos said.

Sarandos praised Bajaria’s “incredible decade-long run” and pointed to her “incredible international team who’s been making local-for-local content around the world, which has become a great competitive differentiator for us over the last decade.”

Indeed, viewing hours in India rose 24% year-on-year partly down to daily reality series Lock Upp, while a deal with regional online retailer Flipkart - allowing customers to unlock membership by purchasing products - drove its largest ever quarter of paid net additions in the subcontinent and grew Q3 revenue approximately 18% year-on-year.

Execs pointed to limited series The Murder Of Jon Benét Ramsey with Melissa McCarthy and Clive Owen, The Diplomat S4, and new seasons of Nobody Wants This and Lupin, among upcoming TV highlights, as well as three NFL American Football games and the Tyson Fury vs. Anthony Joshua boxing match.

Sarandos also praised growth in South Korea and Japan, Europe and the Middle East – picking out the mature Nordic region as a market that was “killing it” – but suggested output from other markets was not delivering as expected.

That has been reflected not only with shows struggling to reach multiple seasons but also by its recent awards hauls, with the streamer’s 16 Emmy Awards wins earlier this year down from 30 in 2025 and more than 40 in 2021.