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Netflix (NFLX) holders have one figure to watch: the pace of revenue growth. Sales rose 11.8% from a year earlier in fiscal Q3 2026, marking the third consecutive quarter of decelerating growth. Management aims to sustain double-digit revenue growth, and Netflix’s growth is now closer to falling below that line than it was a year ago. So where does Netflix say its growth is falling short?
Where Netflix Says Its Growth Is Falling Short
During its October 20, 2026 call, management pointed to ads and the U.S. market. Executives said Netflix is “a bit behind” its aggressive target for the ads business in 2026, noting that some new ads products have faced delays in rollouts and partner integrations. Netflix cut its ad revenue forecast to $2.7 billion from $3 billion.
The ad tier also continues to generate less revenue per member than the standard plan without ads. Management said this gap is narrowing, but that it means under-realized revenue growth in the near term.
In the U.S., management said the business is working but not growing as fast as it could or would like. Separately, executives stated they want view hours to grow faster and are not satisfied. In each case, management itself described growth below what it wants.
How Far Netflix’s Revenue Growth Has Dropped
Netflix’s growth in fiscal Q3 2026, which ran from July to September, fell well below the 17.2% it posted in the same quarter of 2025. Over twelve months, the drop is milder: revenue grew 14.7% in the four quarters to September 2026, compared with 15.4% in the four prior quarters.
Management says its financial objectives remain unchanged: double-digit revenue growth, wider margins and more free cash flow. Of those three, growth is the only metric that came in lower in the latest quarter than a year earlier.
Netflix Stock Now Trades Below The S&P 500’s P/E
Netflix stock lost 43.6% over the twelve months to October 30, 2026, while the S&P 500 gained 11.3%. At the October 30 close, the stock traded at 17.4 times its earnings over the past twelve months, compared with 22.6 for the S&P 500. The price likely assumes that slower growth will last.
Netflix’s profits and members offer the strongest counter to these concerns. The company posted an operating margin of 34.6% in fiscal Q3 2026, up from 28.2% in fiscal Q3 2025. Over the four quarters to September 2026, the margin rose less: 31.3%, against 29.1% in the four quarters before. Management also said churn, the rate at which members cancel, improved from a year earlier both globally and in the U.S., and that the ads business, though behind its target, is still growing over 80% in 2026.
Holders have reason for concern rather than alarm: growth is lower than a year ago, but it remains in double digits and profits are rising. Netflix is expected to report fiscal Q4 2026 results in January 2027, when management plans to give its 2027 guidance. Revenue growth from a year earlier is the figure to watch in that report. Netflix has guided for 11.5% revenue growth in fiscal Q4 2026, which would be a fourth straight quarter of slower growth.
How To Act On NFLX?
Not necessarily on Netflix alone, if your goal is long-term wealth. Wealth is built by owning the companies that keep outperforming, the leaders of their industries, wherever they are. Here is one company from Netflix’s own industry that has beaten it. Over the five years to October 2026, Live Nation Entertainment stock rose 76%, while Netflix stock fell 10.1%.
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