The numbers
12% — Netflix’s Q3 revenue grew 12% year over year to $12.9 billion.
13% — Growth expected for the full year, reaching $51.1 billion.
$2.7 billion — Netflix’s new expected ad revenue for the year, down from $3 billion.
The watercooler talk
Netflix is adjusting its expected ad revenue for the year.
In a previous Q1 earnings report, the streaming giant said it was targeting $3 billion in ad revenue for 2026, which would double its take year over year. However, in its latest quarterly earnings, Netflix is adjusting its expectations, targeting $2.7 billion instead.
According to a company letter to shareholders, the adjustment is due to “slightly slower than expected rollout of some ad product capabilities.” The company didn’t identify which capabilities had caused delays; however, on an earnings call, co-CEO Greg Peters noted that the company was still growing its ads business over 80% for the year: “If you are sufficiently aggressive with your roadmap, you’re going to occasionally be behind some milestones,” Peters said.
The co-CEO said the ad product delays wouldn’t impact the company’s long-term gains.
Earlier in the day, Nicolle Pangis, vice president of U.S. and Canada advertising at Netflix, announced that the streamer would roll out a number of updates to its ad measurement and programmatic capabilities. Among the highlights, Netflix’s Ad-Suite is expanding its programmatic audience capabilities beyond Yahoo DSP and Amazon DSP to include The Trade Desk audiences. Additionally, Netflix will have an enhanced Conversion API and a new Netflix Pixel, which provide advertisers access to more than 20 lower-funnel conversion events.
The key quote
“Specifically, in this case, we’ve seen some delays in the rollout and partner integrations for some of those new ads products. So, getting to the integration model that we want sometimes takes a bit more work with our partners, but we strongly believe that a modest short-term hit for a better long-term strategic position is a good ultimate trade-off.” — Netflix co-CEO Greg Peters
