Overview
- Shares fell about 10% after the Oct. 21 report and now sit roughly 17% below the all-time high, though the stock remains up about 23% for the year.
- Revenue rose 17% year over year to $11.51 billion, but operating margin came in at 28% versus 31.5% guided and EPS of $5.87 missed the $6.97 consensus.
- Management attributed the earnings shortfall to a one-time Brazilian tax assessment that was not included in prior guidance.
- Netflix maintained a constructive outlook with guidance calling for roughly 16.7% revenue growth in the fourth quarter.
- The advertising tier is scaling with ad revenue on track to double this year, aided by live events programming and new AI-driven ad tools, while free cash flow reached $2.7 billion in Q3 with full-year guidance of $8 billion to $8.5 billion.