Netflix Stock Drops Amid Brazil Tax Dispute, Earnings Miss Estimates
Netflix shares fell sharply after reporting weaker-than-expected Q3 2025 earnings, driven by an unexpected tax dispute in Brazil. The streaming giant's stock traded at $1,203.29 as investors reassessed profitability projections and regulatory risks in key international markets.
The Brazil tax issue forced Netflix to lower its full-year operating margin forecast from 30% to 29%, surprising analysts. While quarterly revenue grew 15.2% year-over-year to $11.75 billion, the figure still missed expectations. The company maintains its $45.1 billion revenue projection for 2025, representing 16% growth from 2024.
Market observers now debate whether Brazil's tax challenge represents an isolated incident or signals broader regulatory headwinds for Netflix's international expansion. The development comes as subscriber growth metrics—typically Netflix's strongest performance indicator—remain under scrutiny.
