I’ve noticed how easy it is to make streaming part of your routine. After a long day or week at work, sitting down to watch a good movie or catching up on a series feels really refreshing.
What interests me most is how quickly a service like Netflix can go from being an occasional source of entertainment to something people rarely think about giving up. I remember once telling myself I was done watching TV series because I kept getting hooked.
One episode would turn into another, and before I knew it, I’d spent hours on Netflix. So I decided to stick to movies instead. But even then, I often found myself looking for something else to watch. That’s the thing about Netflix: there’s always something pulling you back.
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Millions of people share that habit. Netflix (NFLX) now has more than 325 million paid subscribers, nearly double its closest rival, and an audience approaching 1 billion people, Netflix said in its shareholder letter.
In its third quarter, reported Oct. 20, 2026, revenue rose 12% to $12.87 billion, operating margin hit 34.6% from 28.2% a year ago, and diluted EPS jumped 49% to $0.87 vs. $0.59 in Q3’25.
Pershing Square’s second-quarter fiscal 2026 investor letter mentioned that Netflix has “effectively won the streaming wars.”
Founder Bill Ackman went further on CNBC’s Squawk on the Street, calling Netflix a “high-growth utility,” on Oct. 22. However, Netflix has cost Ackman dearly before, and not every number this quarter was perfect.
Ackman returns to Netflix after a $400 million loss
Back in August, my colleague Peace Longe covered Pershing Square when it disclosed a new Netflix position of 3.15 million shares, about 4.9% of its portfolio.
Ackman bought more than 3 million shares in early 2022 and sold the whole stake about three months later, after Netflix reported its first subscriber decline in a decade. The loss was more than $400 million.
His reason then was predictability. Changes to Netflix’s business model made results too hard to forecast for a fund that runs a small number of large bets. Four years later, he sees a clear leader whose scale allows it to spend more on shows while maintaining strong margins.
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He also says the price is right. Ackman said the stock trades near 18x earnings, one of its lowest valuations in history, with earnings growth he expects in the mid-to-high teens.
He noted that the two now trade at similar multiples, whereas four years ago, the gap between earnings and cash flow was large. Netflix generated $2.88 billion in free cash flow in the third quarter, and operating income rose 37% to $4.46 billion.
What Netflix’s latest numbers show about its global customers
Growth is global. Revenue in the U.S. and Canada was $5.63 billion, up 11%. Europe, the Middle East and Africa brought in $4.11 billion, up 11% (9% excluding currency), Latin America $1.60 billion, up 17%, and Asia-Pacific $1.54 billion, up 12%.
India shows what that looks like on the ground. According to the Q3 report, Netflix had its largest quarter of paid net additions there, aided by a loyalty bundle with Flipkart, and revenue grew about 18% excluding currency. View hours rose 24%. Across the service, non-English content now makes up more than a third of viewing, up from under 10% a decade ago.
Related: Netflix Q3 2026 Earnings: Recap of $NFLX Earnings, Outlook
I find Netflix’s growing focus on international content particularly interesting. It’s appealing to see a global streaming platform finding stories from different cultures and languages, rather than just Hollywood productions. It helps explain why Netflix is attracting viewers far beyond the U.S.
Customers are sticking. Netflix said churn improved year over year globally and in the U.S., and that members responded to 2026 price increases as expected, with subscription revenue growth driven by more members and pricing. That matters to Ackman, who says it is hard to get someone to cancel and that he doesn’t know who would displace Netflix.
Netflix also repurchased 63.9 million shares for $4.8 billion, its largest quarterly buyback ever, which Ackman put at about 3% of outstanding shares.
Ackman sees disappointment as the opportunity
Not everything beats. Netflix cut its 2026 advertising revenue outlook to about $2.7 billion from about $3 billion, citing a slower rollout of ad product capabilities. Netflix says it plans to bring the ad tier to 15 more countries in 2027, starting in March across nine European, Middle Eastern and African markets, Colombia, Peru and New Zealand.
Ackman acknowledged the need for bigger hits like Squid Game, saying management is adjusting the team. In fact, he called management excellent.
He argues that short-term investors are always looking for something to be disappointed about, and that a cheaper stock helps Pershing Square because Netflix then buys back more shares. He expects a return well into the 20s per year.
For investors, the story is the contrast. In 2022, a decline in subscribers was enough to make Ackman walk away. Now he is betting that a steadier, cash-rich Netflix can survive a few soft spots.
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