LOS GATOS, California — Netflix reported third-quarter earnings after the US market close on Tuesday, posting revenue growth while flagging continued pressure on operating margins from investments in live programming and generative artificial intelligence. The company's shares moved sharply in after-hours trading.

The streaming service has expanded aggressively into live sports, advertising-supported tiers, and AI-driven production tools over the past year. Analysts at Morgan Stanley and Wedbush had forecast revenue above $11.5bn for the quarter, with subscriber additions slowing from earlier highs.

Netflix co-chief executives Ted Sarandos and Greg Peters addressed margin concerns during the company's earnings call, reiterating guidance on content spending for the year. The company said its advertising business continued to scale, though it remained a small share of total revenue.

The results carried weight for the broader streaming and media sector, where competitors Disney, Warner Bros. Discovery, and Amazon have each expanded live and ad-supported offerings. Investors scrutinized operating margin figures closely after the company signalled in prior quarters that AI and content costs were rising.

Netflix finished 2025 as the dominant subscription streamer by revenue. Its quarterly reports have increasingly become a barometer for the sector's shift toward advertising and live events.