❯ Netflix revenue rises 12% as the company lowers its annual advertising outlook

Revenue meets estimates; expense timing lifts profitNetflix reported third-quarter results on October 20. CNBC reported approximately 12% revenue growth to $12.87 billion, matching estimates. Net income increased about 44% to $3.66 billion, partly reflecting expense timing. Membership growth and subscription-price increases supported sales.

Advertising tools trail the rollout planThe company lowered its annual advertising revenue outlook from roughly $3 billion to $2.7 billion because some advertising capabilities were rolling out more slowly than planned. Its cheaper ad-supported tier expands audiences and inventory, while selling that inventory requires tools for placement, audience matching and measuring campaign results.

Guidance and viewing growth draw attentionNetflix now expects annual revenue of around $51.1 billion, at the lower end of its previous $51 billion to $51.4 billion range. It acknowledged investor concerns about viewing-hours growth and emphasized entertainment value, technology improvements and monetization. Shares fell approximately 6% after hours as investors weighed quarterly profit against the growth outlook.

▮ SIGNALScaling streaming advertising requires audiences, inventory and buying tools to mature together; subscriber growth does not automatically produce proportional advertising revenue.