Netflix Takes $619 Million Brazil Tax Charge That Weighs on Q3 Results

Overview

• Netflix reported Q3 revenue of about $11.51 billion, diluted EPS of $5.87 and an operating margin near 28%, all short of some analyst forecasts.
• The $619 million charge, recorded as cost of revenue, covers 2022 through Q3 2025 with roughly 20% tied to 2025 and it cut the quarter’s operating margin by more than five percentage points.
• The company said it does not expect a material impact on future results and guided for Q4 revenue of roughly $11.96 billion and diluted EPS of $5.45.
• Shares fell sharply after the release, erasing about $33 billion in market value according to an external estimate.
• CFO Spencer Neumann said the dispute involves a CIDE-style non‑income tax at roughly 10% on payments from Netflix Brasil to Netflix US, and that the STF decision led management to deem a loss probable.