Netflix Faces Earnings Test as Stock Options Signal 10% Swing

Netflix is approaching a closely watched quarterly earnings report as investors assess whether the streaming company's recent stock decline can stabilize. The company is scheduled to release third-quarter results after the market closes Tuesday, October 20, 2026, with options pricing indicating a potential share-price move of approximately 9% to 10% by Friday, October 23.

According to analyst estimates compiled by LSEG and reported by CNBC, Netflix is expected to post earnings of 82 cents per share on revenue of $12.87 billion for the quarter ended September 30. The company also scheduled an analyst conference call for 4:45 p.m. ET Tuesday.

Netflix shares have fallen approximately 40% over the past year and nearly 50% from their all-time highs, according to CNBC's October 20 coverage. The stock's median move following earnings over the previous eight quarters was 7.25%, while current options prices imply a larger-than-usual reaction.

CNBC reported that the implied move reached its highest level since Netflix's third-quarter 2022 earnings report, when options indicated an 11% move. Shares subsequently surged 13% that quarter, exceeding the expected range.

Options activity ahead of the latest report showed demand for both bullish positioning and downside protection. CNBC reported that, as of noon ET Tuesday, investors had purchased calls at 1.5 times the volume of puts purchased, while put selling exceeded its average daily volume by more than 150%.

Six of the 10 most actively purchased contracts were calls, five of which expired Friday, October 23. The largest reported transaction involved the sale of November 20 puts with a $70 strike price, totaling approximately $2 million.

Investors also purchased more than 3,500 $80 call contracts expiring Friday, paying more than $210,000 in premiums. Based on CNBC's analysis, the stock would need to rise at least 20% by expiration for those contracts to break even, more than twice the implied upside move.

Separate options data published by Yahoo Finance, in an article first published on GuruFocus, showed a different mix of activity across contracts expiring October 23. The $60 put was the most actively traded contract, with 13,588 contracts changing hands and open interest of 10,061.

Trading also included 5,242 contracts in the $35 put, 5,021 in the $62 put and 4,851 in the $65 put. On the call side, the $70 contract recorded 4,700 trades, the $85 call recorded 4,664 against open interest of 8,232, and the $73 call added 3,768 contracts.

The range of positions reflected uncertainty about the direction of Netflix's next share-price move. Yahoo Finance reported that a straddle built around options near a $70 share price cost approximately $7, consistent with expectations of a substantial reaction following the results.

Netflix is also confronting organizational changes and intensifying competition across the streaming market. CNBC reported the previous week that the company planned to lay off approximately 6% of its workforce, or about 1,000 employees, while Chief Content Officer Bela Bajaria was departing that position.

The company faces stagnating viewership and competition from platforms including YouTube, while subscriber additions have slowed across the streaming industry in recent years. Advertising has become an increasingly important revenue source for media companies, and Netflix continues to offer a lower-priced, ad-supported subscription tier.

On Tuesday, Netflix announced additional advertising features intended to help brands reach relevant audiences and measure advertising performance. The initiatives come as executives explore new growth opportunities amid pressure on the company's share price.