Profits keep climbing as the stock drops. Has the price finally fallen far enough?
Profits keep climbing as the stock drops.
Has the price finally fallen far enough?
Shares of Netflix (NFLX -5.31%) closed at around $69 on Oct. 20, down about 27% in 2026. If the year ended at that price, it'd be the stock's worst calendar year since 2022, when shares slid 51%.
And it got worse after the bell. Following the streaming giant's third-quarter results, the stock dropped about 6% in after-hours trading to around $65. That was under its lowest close of the year.
But the business behind the stock looks nothing like it did in 2022. Its profits are still rising fast, even as the stock price falls.
Profits are still climbing
In 2022, Netflix's trouble was the business itself. The company lost around 1 million paid memberships in the second quarter of that year alone, and revenue grew just 9% year over year in the period.
This year's different. Showing how profitable the streaming service has become, Netflix's third-quarter revenue rose 12% year over year to $12.9 billion, while its operating income jumped 37%. Its operating margin widened to 34.6%, up from 28.2% a year earlier. And earnings per share jumped 49% to $0.87.
Granted, these comparisons flatter the quarter a little. Last year, Netflix booked an expense of around $619 million linked to a dispute with Brazilian tax authorities, which weighed on its operating margin in the third quarter of 2025.
Leaving out that charge, Netflix's operating income would still have climbed about 15%, and its operating margin would still have widened by about a percentage point.
Averytin News Financial update.