Netflix saw revenue jump 17% year-over-year in Q3 of 2025 to eclipse US$11.5 billion in revenues, but a conflict with Brazilian tax authorities caused it to miss its operating margin projections for the quarter.

In the streaming giant’s latest earning report, which was issued on Tuesday (Oct. 21), Netflix stated that the dispute caused its Q3 operating margin to come in at 28%, below its original estimate of 31.5%. That discrepancy, along with a corresponding decrease in operating-margin projection for 2025 overall (29% versus 30%), caused share prices for Netflix stock to fall during early trading on Wednesday (Oct. 22).

Playback offers a look at some of Netflix’s key Q3 2025 results and Q4 projections below:

Q3 revenue: $11.5 billion

Year-over-year (YOY) change: Up 17% from $9.825 billion

Reason for increase: Netflix attributed the rise in revenue to higher pricing, membership growth, and what it claimed to be its “best ad sales quarter ever” for its advertiser-supported tier. (The streamer does not provide details about the amount of its advertising revenue.)

While Netflix no longer reports its subscriber numbers, the report did single out such programming highlights as season two of Wednesday, the long-awaited Adam Sandler sequel Happy Gilmore 2 and the breakthrough hit KPop Demon Hunters, which the streamer claims is its “most popular film ever.”

Speaking to the company’s growing slate of live sporting events, the report also noted the recent championship boxing match between Terence Crawford and Saul “Canelo” Alvarez. Netflix claims that the event attracted more than 41 million viewers worldwide, making it “the most-viewed men’s championship fight this century”

Q3 operating margin: 28.2%

YOY change: Down 1.4% from 29.6%

Reason for decrease: Netflix stated that its Q3 operating margin came in below its estimates of 31.5% due to an unforeseen expense of $619 million “related to an ongoing dispute with Brazilian tax authorities regarding certain non-income tax assessments.” The company claimed that it would have exceeded its estimate absent that expense, adding that they “don’t expect this matter to have a material impact on future results.”

However, the charge has caused Netflix to revise its 2025 operating margin projection to 29%, down from its prior expectation of 30%.

Diluted earnings per share (EPS): $5.87

YOY change: Up 9% from $5.40

Reason for increase: The rise in EPS is tied to Netflix 12% growth in operating income for Q3 2025, which hit $3.2 billion from $2.91 billion in the third quarter of 2024. However, both the Q3 operating income and EPS came in below Netflix’s projections due to the Brazilian tax matter.

Projected total revenue for 2025: $45.1 billion

YOY change: Up 16% from $39 billion

Reason for increase: Netflix anticipates repeating the percentage bump it reported for the 2024 fiscal year with support from a projected 17% revenue growth in Q4.

On the programming front, Netflix cited such forthcoming highlights as the fifth and final season of its flagship series Stranger Things, as well as high-profile original feature films such as Guillermo del Toro’s Frankenstein, Kathryn Bigelow’s A House of Dynamite and Rian Johnson’s Wake Up Dead Man: A Knives Out Mystery.

Image courtesy of Netflix