Netflix Q3 Misses After Brazil Tax Settlement

Netflix reported Q3 revenue of about $11.5 billion and EPS of $5.87, missing estimates after taking a one-time $619 million charge to resolve a multiyear Brazilian tax dispute that reduced operating income to roughly $3.24 billion — about $400 million below its own forecast. Net income was about $2.5 billion, and the earnings miss snapped a six-quarter streak of beating analyst estimates, sending the stock down roughly 5–9% in extended and intraday trading. Management guided Q4 revenue to about $11.96 billion and EPS to $5.45 and said the service now exceeds 300 million members, citing recent hits and two live NFL games as engagement drivers. Advertising was a bright spot: Netflix reported its best ad-sales quarter, expects ad revenue to roughly double in 2025, and is scaling its ad tier while testing interactive formats. Executives highlighted increasing generative-AI use across content, discovery and advertising and emphasized a strong upcoming content slate and live-sports additions. Analysts trimmed price targets and market-watchers cautioned the surprise could raise volatility across tech and correlated assets.