Netflix shares fall as quarterly profit misses expectations

October 22, 2025 / 9:22 AM

Sharjah24 - AFP: Netflix shares tumbled more than 5% in after-market trading Tuesday after the streaming giant reported a quarterly profit that failed to meet analyst expectations. The company posted $2.5 billion in profit on $11.5 billion in revenue, but said results were impacted by a $619 million expense tied to an ongoing dispute with Brazilian tax authorities.

In a letter to shareholders, Netflix stated that without the Brazil-related charge, it would have surpassed its operating margin forecast. “We don’t expect this matter to have a material impact on future results,” the company said.

Strong viewership and Ad growth

Despite the financial setback, Netflix reported record-high viewership in the United States and Britain, fueled by the hit film “KPop Demon Hunters,” its most-watched title ever. The ad-supported tier also achieved its best sales quarter to date, reinforcing Netflix’s push into diversified revenue streams.

Analyst Ross Benes of Emarketer noted, however, that Netflix’s decision not to disclose the size of its ad business “suggests that ongoing revenue growth will mainly continue to come from subscription fees.”

Expansion ambitions and future lineup

Netflix, now boasting over 300 million paid memberships across 190 countries, continues to dominate the global streaming market. Industry speculation suggests it may be exploring a bid for Warner Brothers Discovery (WBD). Benes said a potential acquisition would benefit Netflix if WBD’s planned corporate split leaves its film studio independent of slower-moving TV networks.

Looking ahead, Netflix expressed optimism for the current quarter, citing upcoming releases such as the final season of “Stranger Things,” “The Diplomat,” and a new “Knives Out Mystery.” The company also plans to expand its slate of live sports and entertainment events, including American football and boxing broadcasts.