Overview
- Q3 revenue reached $11.51 billion in line with forecasts, but diluted EPS of $5.87 missed expectations after an unexpected roughly $619 million Brazil tax expense cut operating margin to 28% versus 31.5% guidance.
- Netflix said the Brazil matter is a catch-up cost it does not expect to materially affect future results, and it trimmed its 2025 operating-margin outlook to about 29%.
- The company guided Q4 revenue to $11.96 billion and EPS to $5.45, and maintained full-year 2025 revenue guidance at about $45.1 billion.
- Management reported the best ad-sales quarter in company history, said ad revenue is on track to more than double in 2025 from a small base, and began testing generative-AI ad formats in Q4.
- Shares fell roughly 5%–8% after the report as investors weighed softer margin performance and limited near-term revenue upside, with Netflix continuing to steer focus toward revenue and profit rather than subscriber counts.