Netflix shares fell on Tuesday after the world’s leading streaming company reported a quarterly profit that fell short of market expectations.
Netflix reported a profit of $2.5 billion on revenue of $11.5 billion for the just-ended quarter, while noting that the company took a $619 million charge due to an ongoing dispute with tax authorities in Brazil.
Netflix management told financial analysts that if not for higher costs in Brazil, the company would have beaten its operating margin forecast for the quarter.
Netflix shares fell more than 6% to about $1,163 in after-market trading, following the release of its latest earnings results.
Netflix’s third-quarter revenue rose 17%, in line with analysts’ expectations, driven by subscriber growth, pricing adjustments and higher ad revenue.
For the fourth quarter, Netflix expects revenue to continue to grow 17% year-over-year, in line with that growth momentum.
Netflix also reported third-quarter net income of $2.55 billion, or $5.87 per share, up from $2.36 billion, or $5.40 per share, in the same quarter a year ago.
Netflix’s viewership in Britain and the United States also hit its highest level in nearly three years, helped by its most popular film to date, “KPop Demon Hunters,” according to the company’s earnings report.
The animated film is now the most-watched on the platform, with more than 325 million views.
Netflix expressed confidence in its performance in the current quarter, citing several shows expected to attract viewers, including the final season of “Stranger Things” and “The Diplomat.”
At the same time, Netflix announced a partnership with Hasbro and Mattel to expand the reach of the animated film, with the launch of themed dolls and toys in the spring of 2026.
According to analyst Benes, there have been rumors that Netflix is interested in acquiring global entertainment company Warner Bros. Discovery.
