Netflix Revenue Beats, Stock Slides

Netflix’s latest forecast gave Wall Street plenty to cheer on revenue, but a profit miss and a Brazilian tax hit still sent the stock lower.

Quick Take

Netflix reported Q3 2025 revenue of $11.51 billion, up 17.2% from a year earlier.
The company said Q4 revenue should reach $11.96 billion, above analyst estimates.
Netflix cut its 2025 operating margin outlook from 30% to 29% after a Brazilian tax dispute.
Shares fell after the earnings release as investors focused on the earnings per share miss.

Revenue Growth Stayed Strong

Netflix said third-quarter revenue reached $11.51 billion, which was up 17.2% year over year and matched the broad revenue target on Wall Street. The company said growth came from more members, higher prices, and stronger advertising sales. Management also kept its full-year revenue forecast at $45.1 billion, which points to a year of solid top-line growth even after the market reaction.

The next quarter outlook also looked firm on the surface. Netflix projected Q4 revenue of $11.96 billion, above the $11.90 billion expected by analysts, and it forecast earnings of $5.45 per share versus a $5.42 estimate. The company also said it expects ad revenue to more than double in 2025, which supports its push to build a second growth engine beyond subscriptions.

Profit Pressure Triggered the Sell-Off

Investors did not focus on revenue alone. Netflix reported earnings per share of $5.87, which fell short of market expectations, and that gap drove the headline that the forecast disappointed Wall Street. The company also reported a 28% operating margin for the quarter, below the 31.5% forecast, because of an expense tied to an ongoing tax dispute in Brazil.

That tax issue also forced Netflix to trim its 2025 operating margin outlook from 30% to 29%. For market watchers, that mattered more than the better-than-expected revenue guide. The stock dropped in after-hours trading and later extended its losses as traders reacted to the weaker profit picture.

Why the Market Reacted So Fast

The reaction fits a familiar Wall Street pattern. A small miss on earnings can overshadow strong sales growth, especially when investors already expect a lot from a large company. Reuters reported that Netflix’s shares fell 9.2% before the open, while other market reports said the stock lost more than 10% during trading after the results. That kind of move shows how little patience investors have for any sign of friction.

Netflix earnings forecast disappoints Wall Street, shares tumble

Netflix forecast third-quarter revenue of $12.86 billion and diluted EPS of 82 cents

Shares drop more than 8% in after-hours trading

— ✖️ The Gaming Monkeys 🎮- Vérified (@GamerMonkey_) July 17, 2026

Netflix still enters the next quarter with several positive signs. Free cash flow for 2025 is now expected to reach about $9 billion, and the company said it has a “solid foundation” and growing confidence in advertising. Even so, the Brazilian tax dispute and the earnings shortfall gave critics a clear reason to question whether fast revenue growth alone is enough to keep the stock moving higher.