Overview
- Netflix posted Q3 revenue of $11.5 billion and diluted EPS of $5.87 after a roughly $619 million Brazilian tax expense cut operating margin to 28%, with management saying the matter should not materially affect future results.
- Fourth-quarter guidance called for $11.96 billion in revenue and $5.45 in EPS, both a touch ahead of consensus forecasts.
- Shares fell about 7% to 8% in after-hours and premarket trading as investors reacted to the profit shortfall and lower-than-expected margin.
- The ad business notched its best quarter on record, with U.S. upfront commitments doubling as the ad-supported tier continues to scale from a still-small base.
- Content and engagement remained strong, highlighted by 'KPop Demon Hunters' becoming Netflix’s most-watched film and record U.S. TV view share in the quarter, alongside successful live events such as Canelo vs. Crawford.