Netflix released its Q3 2025 earnings on Tuesday, revealing adjusted earnings per share (EPS) of $5.87, falling short of Wall Street targets and the company’s own guidance. However, revenue reached $11.51 billion, meeting analyst expectations for the July–September quarter.

The earnings shortfall was attributed to an unexpected expense stemming from a Brazilian tax dispute, which reduced the operating margin to 28%, below the 31.5% forecast. Netflix emphasized that without this one-time charge, it would have exceeded its Q3 margin expectations and does not anticipate a material impact on future results. Despite this, Netflix shares fell up to 6% in after-hours trading.

On a positive note, Netflix recorded its “best ad sales quarter ever,” doubling commitments in the U.S. upfront market and positioning the company to more than double ad revenue in 2025. Leveraging AI, Netflix plans to test innovative ad formats, optimize creative placement for members, and accelerate media planning, with dozens of new formats slated for experimentation by 2026.

Netflix reaffirmed full-year 2025 revenue guidance at $45.1 billion, up 16% year-over-year (17% on an FX-neutral basis). The operating margin forecast was revised down to 29% from 30%, reflecting the Brazilian tax issue. Free cash flow projections increased to approximately $9 billion, up from a previous range of $8–8.5 billion, due to timing of cash payments and lower content spend.

Q3 highlights included the breakout success of “KPop Demon Hunters,” which drove both streaming viewership and box office revenue, supported by merchandise deals with Mattel and Hasbro. Other notable Q3 performers were “Wednesday” Season 2, “Bon Appétit,”South Korea’s “Your Majesty,”“Happy Gilmore 2,” and the Canelo vs. Crawford boxing match, which became the most-viewed men’s championship fight of the century.

Following the decision to stop reporting subscriber totals in Q1 2025, Netflix now emphasizes revenue as the primary growth indicator. The last publicly confirmed subscriber count was 301.6 million at the end of 2024. Q3 revenue growth by region included 17% in the U.S. and Canada, 18% in Europe, the Middle East, and Africa, 10% in Latin America, and 21% in Asia-Pacific.

For Q4 2025, Netflix projects revenue of $11.96 billion (up 16.7% YoY) and EPS of $5.45, with an estimated operating margin of 23.9%. Anticipated releases include the fifth and final season of “Stranger Things”, new seasons of “The Diplomat” and “Nobody Wants This,” and major films like Guillermo del Toro’s “Frankenstein”, Kathryn Bigelow’s “A House of Dynamite”, and Rian Johnson’s “Wake Up Dead Man: A Knives Out Mystery”. Live events include NFL Christmas Day games and a Jake Paul vs. Tank Davis boxing match.