{"id":322193,"date":"2025-10-21T21:57:17","date_gmt":"2025-10-21T21:57:17","guid":{"rendered":"https:\/\/www.europesays.com\/us\/322193\/"},"modified":"2025-10-21T21:57:17","modified_gmt":"2025-10-21T21:57:17","slug":"netflix-shares-sell-off-after-q3-earnings-miss-warning-about-brazilian-tax-dispute","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/us\/322193\/","title":{"rendered":"Netflix Shares Sell Off After Q3 Earnings Miss, Warning About Brazilian Tax Dispute"},"content":{"rendered":"

\n\tNetflix<\/a> fell short of Wall Street analysts\u2019 earnings expectations in the third quarter<\/a> and said a dispute with Brazilian tax authorities kept operating margins from meeting its guidance.<\/p>\n

\n\tRevenue came in on target during the June-to-September period, reaching $11.51 billion.<\/p>\n

\n\tEarnings per share of $5.87 on a diluted basis came in more than a dollar shy of analysts\u2019 consensus outlook for $6.97.<\/p>\n

\n\tIn its quarterly letter to shareholders, the company said its operating margin of 28% undershot guidance of 31.5% \u201cdue to an expense related to an ongoing dispute with Brazilian tax authorities that was not in our forecast. Absent this expense, we would have exceeded our Q3\u201925 operating margin forecast. We don\u2019t expect this matter to have a material impact on future results.\u201d<\/p>\n

\n\tShares in Netflix slumped on the earnings miss in after-hours trading, falling as much as 7% before stabilizing a bit and remaining in the red. The stock had been on a tear, rising almost 40% in 2025 to date and recently trading above $1,200, close to its all-time high.<\/p>\n

\n\tWednesday\u2018s Season 2 premiere in September drove significant viewership to close out the quarter. The series racked up more than 7 billion viewing minutes during the month, according to Nielsen, more than twice the No. 2 title. <\/p>\n

\n\tThe Addams Family spinoff was a key part of Netflix\u2019s pitch to advertisers in the upfront, and helped deliver the best ad revenue quarter in the company\u2019s history. In the letter, the company said it remains on track to double ad revenue for the full year compared with 2024.<\/p>\n

\n\tHigher ad revenue, along with price increases and subscriber growth, drove 17% year-over-year revenue growth, the company said.<\/p>\n

\n\tA lengthy section of the letter outlined a strikingly optimistic outlook on the impact of AI on the company and its customers. In addition to production, the company said it uses AI and machine learning already to fine-tune its user interface, place relevant ads on shows across its subscriber footprint, localize promotional assets and improve other functions. <\/p>\n

\n\t\u201cGiven our significant data assets and at-scale products and business processes, we are very well positioned to effectively leverage ongoing advances in AI,\u201d the letter said. \u201cWe believe Generative AI presents a significant opportunity for us to deliver benefits to our members, creators, and business.\u201d<\/p>\n

\n\tAs Netflix and other major streamers and studios approach another negotiation with above-the-line unions, which are all on edge over AI, Netflix\u2019s letter characterized the technology as \u201cempowering\u201d for creators. GenAI tools can \u201chelp them achieve their visions and deliver even more impactful titles for members,\u201d it said. \u201cFor example, in Happy Gilmore 2, filmmakers used GenAI coupled with ML and Eyeline\u2019s proprietary volumetric capture technologies to de-age characters during the opening flashback scene. And the producers of Billionaires\u2019 Bunker used various GenAI tools during pre-production, including for pre-visualization to explore wardrobe and set designs.\u201d<\/p>\n

\n\tNetflix recently issued guidelines for the use of AI in production, the letter recalled.<\/p>\n","protected":false},"excerpt":{"rendered":"Netflix fell short of Wall Street analysts\u2019 earnings expectations in the third quarter and said a dispute with…\n","protected":false},"author":3,"featured_media":322194,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[6],"tags":[64,4659,49784,38272,67,132,68],"class_list":{"0":"post-322193","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-business","8":"tag-business","9":"tag-netflix","10":"tag-netflix-earnings","11":"tag-third-quarter","12":"tag-united-states","13":"tag-unitedstates","14":"tag-us"},"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@us\/115414397653276625","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts\/322193","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/comments?post=322193"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts\/322193\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/media\/322194"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/media?parent=322193"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/categories?post=322193"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/tags?post=322193"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}