Netflix reported a 12 per cent revenue increase to nearly US$12.9 billion in the third quarter of 2026, alongside a 44 per cent rise in net income. However, stagnating viewer attention time and slowing growth in the US and Canada have left executives and Wall Street analysts questioning future momentum.
After a tumultuous week that included laying off 1,000 employees and replacing its chief creative officer alongside its film chief, the streaming giant proved its financial machinery remains intact according to Businesstimes. Net income climbed to nearly US$3.7 billion for the third quarter, while overall revenue hit nearly US$12.9 billion, matching Wall Street expectations.
Yet that revenue figure represented the company’s lowest quarterly percentage growth in three years. Investors reacted swiftly, sending shares down nearly 6 per cent to US$64.66 in after-hours trading following the earnings report.
Ted Sarandos Defends Strategy Amid Engagement Pressure
Co-chief executive officer Ted Sarandos pushed back against calls for radical change during a post-earnings investor conference call according to Businesstimes.
There is no need for a fundamental shift in the strategy. We do need better execution in the US.
Ted Sarandos, co-CEO of Netflix
Despite maintaining 325 million subscribers worldwide as the most-watched paid streaming service, leadership faces mounting pressure over view-hours according to Businesstimes. Revenue growth in the US and Canada slowed to 11 per cent in the recent quarter, dropping from 17 per cent a year earlier. Analysts point to TikTok and YouTube as competition eating into viewer attention spans.
Executive Shake-up and Programming Resets at Netflix
The company’s recent leadership overhaul saw chief creative officer Bela Bajaria replaced by former Disney and Fox executive Peter Rice, who will also oversee the film division temporarily following the departure of film chief Dan Lin according to Businesstimes. Sarandos noted that Rice understands talent relations in a competitive market where creative talent have multiple choices.
Netflix also struggled to maintain viewership numbers for returning seasons of shows such as Beef, The Night Agent, and Avatar: The Last Airbender, while summer film releases failed to produce a breakout hit according to Businesstimes. New programming introduced during the quarter included Monster: The Lizzie Borden Story, the second season of The Gentlemen, the final installment of Outer Banks, and a reboot of Little House on the Prairie.
