WORLD (Enmaeya News) - October 22, 2025
Netflix missed Wall Street’s profit expectations for the third quarter of the year due to unexpected expenses stemming from a tax dispute with Brazil, while providing guidance that exceeds Wall Street estimates for the rest of the year.
Netflix shares, a leader in video streaming, fell 5.6% to $117.24 in after-hours trading on Tuesday. The stock had surged 39% this year prior to the earnings release.
The company is seeking to expand into new areas such as advertising and video games, after attracting more than 300 million subscribers worldwide. It faces competition from YouTube, Amazon’s Prime Video, Disney+, and others.
Netflix reported a net income of $2.5 billion and earnings per share of $5.87 for July through September, a period during which the animated film "K-Pop Demon Hunters" became the most-watched film in Netflix history.
According to the London Stock Exchange, the net income fell short of analysts’ expectations of $3 billion, and earnings per share were below the estimated $6.97.
Revenues were in line with expectations, reaching $11.5 billion.
Netflix announced an operating margin of 28% for Q3, noting that without the Brazilian tax expense of approximately $619 million, the margin would have exceeded the company’s guidance of 31.5%. The company added that it does not expect the matter to have a material impact on future results.
For Q4, Netflix projected revenue of $11.96 billion, compared with Wall Street estimates of $11.90 billion. The company also expects earnings per share to exceed analysts’ targets by one cent, at $5.46.
