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Netflix unveiled its third-quarter 2025 financial results on October 21, emphasizing revenue growth after ceasing regular subscriber reporting earlier this year. The streaming giant posted adjusted earnings per share of $5.87, falling short of both Wall Street expectations and its own projections, while revenue reached $11.51 billion, aligning precisely with forecasts. Analysts had anticipated earnings per share of $6.97 for the July-September period.
In a shareholder letter, Netflix attributed the earnings miss to an unforeseen expense tied to a lingering dispute with Brazilian tax authorities. The company noted that its operating margin stood at 28%, below the targeted 31.5%, but excluding this cost, it would have surpassed guidance. Netflix reassured investors that the issue is not expected to significantly affect future performance. Following the announcement, the company’s stock dipped by up to 6% in after-hours trading.
Despite the setback, Netflix highlighted strong progress in its advertising sector, describing the quarter as its most successful for ad sales to date. U.S. upfront commitments doubled, positioning the company to more than double its ad revenue in 2025, albeit from a modest starting point. Looking ahead, Netflix plans to leverage artificial intelligence in the fourth quarter to experiment with innovative ad formats, optimize creative elements and placements for viewers, and streamline media planning. By 2026, these tools are expected to enable rapid testing and refinement of numerous ad variations.
In July, Netflix revised its full-year 2025 revenue outlook upward to between $44.8 billion and $45.2 billion, reflecting 15-16% growth over the previous year. The third quarter’s standout hit was the animated musical “KPop Demon Hunters,” which exploded in popularity and continued driving viewership into the fourth quarter. Building on its streaming success since its June 20 debut, Netflix announced a theatrical re-release of the film after a strong initial cinema run this summer. The company has also secured major merchandising partnerships with Mattel and Hasbro for toys, dolls, games, and other products tied to the franchise.
Beyond “KPop Demon Hunters,” Netflix credited its quarterly performance to a slate of popular titles, including Season 2 of “Wednesday,” the culinary series “Bon Appétit,” the South Korean drama “Your Majesty,” the comedy sequel “Happy Gilmore 2,” and a high-profile boxing event, which drew the largest audience for a men’s championship fight this century.
Netflix discontinued disclosing total subscriber figures starting with the first quarter of 2025, with the last reported count at 301.6 million global paid members at the end of 2024. Shifting focus to revenue as a key growth metric, the company reported regional gains: 17% in the U.S. and Canada, 18% in Europe, the Middle East, and Africa, 10% in Latin America, and 21% in the Asia-Pacific region.
As Netflix enters its fourth quarter (October-December), it anticipates a robust lineup including the fifth and final season of “Stranger Things,” fresh episodes of “The Diplomat” and “Nobody Wants This,” the upcoming “Frankenstein,” the film “A House of Dynamite,” the mystery “Wake Up Dead Man: A Knives Out Mystery,” and live broadcasts such as NFL Christmas Day games and a boxing bout. For the period, Netflix forecasts revenue of $11.96 billion—a 16.7% year-over-year increase—along with earnings per share of $5.45 and an operating margin of 23.9%.
