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1h ago

Netflix Revenue Jumps as Profit Misses on $619 Million Brazil Tax Charge

Management kept sales guidance intact to underscore a pivot toward revenue metrics alongside a booming ads business.

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FILE - This Aug. 13, 2020 photo shows a logo for Netflix on a remote control in Portland, Ore. (AP Photo/Jenny Kane, File)
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The Netflix logo is shown on one of their Hollywood buildings in Los Angeles, California, U.S., July 12, 2023. REUTERS/Mike Blake

Overview

  • Third-quarter revenue rose 17.2% year over year to $11.51 billion, matching Wall Street forecasts.
  • Net income was $2.5 billion with EPS of $5.87, missing expectations after an unexpected $619 million expense tied to a Brazilian tax dispute cut operating margin to 28%.
  • The company reported its best ad sales quarter to date and said ads revenue is on track to more than double in 2025, with new AI-driven ad formats beginning tests in Q4.
  • Netflix guided Q4 revenue to $11.96 billion and reaffirmed full-year 2025 sales of about $45.1 billion, trimming its operating margin outlook to 29% and projecting roughly $9 billion in free cash flow.
  • Shares fell about 5%–7% in after-hours trading as investors weighed the earnings shortfall despite strong engagement from hits like KPop Demon Hunters and high-profile live events.