Overview
- The stock fell about 7–8% in early trading after the company disclosed the Brazil payment and reported an earnings shortfall.
- Netflix recorded a $619 million charge to settle a multi‑year dispute with Brazilian tax authorities dating to 2022, which it characterizes as non‑recurring.
- The charge reduced Q3 operating margin to 28% versus a 31.5% forecast, with diluted EPS of $5.87 missing analyst estimates; management said it would have topped internal targets without the expense.
- Revenue rose 17% year over year to roughly $11.51 billion, and free cash flow reached about $2.66 billion for the quarter with full‑year FCF guided to around $9 billion and plans for buybacks and content investment.
- Full‑year operating margin guidance was cut to about 29% from ~30%, while outlook calls for roughly $12 billion in Q4 revenue as subscription gains, advertising growth, and hit titles like K‑Pop Demon Hunters support momentum alongside new merchandising deals with Hasbro and Mattel.