The firm’s stats showed strengths and some hard parts as it tries to grow all over. While business is great, with solid income and sign-ups, odd overseas tax issues are causing snags.
Profit Miss and Market Mood
Netflix’s stock dropped by about 7% after hours on Tuesday after revealing its Q3 profits. The streaming giant showed earnings per share EPS at $5.87, less than the $6.97 that analysts had expected. Still, income hit $11.51 billion, matching market hopes.
The firm said that the profit gap was mainly due to a 10% Brazil tax on some payments from local groups to outfits outside Brazil. This tax wasn’t in Netflix’s past guesses. Once it seemed Netflix would lose its tax fight, the firm chose to put the hit in Q3.
Chief Money Guy Spence Neumann said in the call that this tax isn’t just for Netflix, but a broad tax issue in Brazil. Neumann added that without this tax, Netflix would have beaten its income forecast for the quarter. He told investors the problem is not likely to hurt future results.
Great Income Surge Despite Issue
Despite a tax ding, Netflix had a good run in business land. Third-quarter money went up seventeen per cent from last year, like adding members, tweaking prices, and more ad dough.
For the next round, Netflix sees another 17% money hop, meaning it’s still growing like a champ. The company made two points $55 billion, up from two points $36 billion last year.
Netflix said it still thinks it will make $45.1 billion dollars this year, up 16% from 24%, same as before. But because of a tax thing in Brazil, it would make a bit less, like 29% instead of 30%.
Ads Sell Great, Business Grows More
Even with the tax fuss, Netflix sold a lot of ads. The company had its best ad sales ever, showing people really want to pay less and see ads.
Co-boss Greg Peters said ad money will more than double this year. Expert Ross Benes said Netflix still won’t know how much ad money it makes, hinting that most money still comes from folks paying for no ads.
Netflix made a plan with ads to get folks who care about price, and it helps them grow a lot. The company also charged more in January, even for the ad plan, making even more money.
Good Shows Keep People Watching
Netflix still banks on cool shows to get folks to join and stay. The next three months will be huge for the site, with lots of new stuff coming out.
The last part is the fifth and last time we see Stranger Things, a big show that everyone watches on Netflix. Also coming are The Diplomat and Nobody Wants This but newer, plus Frankenstein by Guillermo del Toro and Rian Johnson’s next story, Wake Up Dead Man: A Knives Out Mystery.
Netflix also keeps making great cartoons. A movie called “KPop Demon Hunters”, which came out in June, was watched more than any other movie on Netflix, with over 325 million views. Because of this, they will sell new things with Hasbro and Mattel, like dolls and toys, coming in the spring of 2026.
Netflix also wants to try live shows, books, makeup, and even food related to the movie. The movie will play in theatres again for Halloween, which shows how Netflix wants to find new ways to make their popular stories even bigger.
Problems Around the World and What They Want to Do
Even though Netflix is watched everywhere, working in many countries means facing new problems. A fight about taxes in Brazil shows how different rules in each place can change things for big companies.
These kinds of problems can worry people who invest money, even when the company is doing well. Netflix said that even though the tax problem was a surprise, it doesn’t mean their business is doing badly or that they won’t grow.
The company keeps spending money on shows, ads, and growing in other countries, which means they believe they will keep growing. Netflix wants to make more money from ads and shows from all over the world, not just from people paying for subscriptions.
What Investors Think and What Will Happen
Even if the stock dipped for a bit, many experts still feel good about what Netflix will do. A lot of fans, rising ad money, plus okay movies mean it’s still doing great.
Netflix makes money grow fast, despite some rules and tax stuff, which tells us it’s tough. People may watch how it deals with taxes and regulations in other countries later on.
Soon, how Netflix does in the last part of the year will tell if it can keep growing fast. Its new shows, world ads, and link-ups hint it may do great by 2026.
Finally
Netflix’s results show it’s growing well, but it had some odd bumps. Although a tax issue in Brazil stung and made the stock dip a bit, it’s still doing great overall.
With money growing fast, more ad sales, plus cool shows, Netflix still rules the streaming world. It’s into new stuff like ads and live shows, showing it can change with the times.
As Netflix gets past the tax thing, things look good for it. More fans and ads hint that its plan works, even as it deals with being a big global media thing.
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