"Although revenue rose 17% year-over-year to $9.8 billion, meeting management's guidance and Wall Street expectations, earnings of $5.87 per share missed consensus estimates of $5.95 due to a one-time $360 million charge tied to a Brazilian tax dispute. Management emphasized the hit was non-recurring and should not affect long-term performance. The company also said it will no longer meet its full-year operating margin target of 30%, though it remains on track for strong profitability growth."
"Ad revenue - now a core growth driver - hit record levels and remains on pace to double for 2025, despite Netflix not disclosing specific figures. During the conference call, one analyst interpreted management's comments as hinting at another potential doubling of ad revenue in 2026, though executives declined to confirm and said they will provide more detail in Q4. However, executives reiterated confidence in the ad business trajectory."
Netflix's revenue increased 17% year-over-year to $9.8 billion, meeting guidance, while EPS of $5.87 missed estimates because of a one-time $360 million Brazilian tax charge. Management characterized the charge as non-recurring and affirmed long-term performance expectations, while acknowledging the company will not meet its 30% full-year operating margin target though profitability growth remains on track. Ad revenue reached record levels and is projected to double by 2025, with possible further expansion discussed but not confirmed. The stock fell sharply as a premium 52x forward valuation left little room for error amid growing competition and plateauing developed-market subscriber growth.
Read at 24/7 Wall St.
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