Netflix Reports Q3 Revenue of $11.51 Billion with 8% Year-on-Year Profit Growth

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On October 22, 2025, Netflix released its financial report for the third quarter of fiscal year 2025. The report indicates that the company's revenue for the third quarter reached $11.51 billion, marking a 17.2% increase compared to $9.83 billion in the same period last year. The net profit for the quarter was $2.55 billion, up 8% from $2.36 billion a year earlier, resulting in earnings per share of $5.87, up from $5.40 in the previous year.

While Netflix's revenue and earnings per share fell short of Wall Street analysts’ expectations, the company's guidance for the fourth quarter of fiscal year 2025 exceeded predictions.

Following the earnings release, Netflix's stock saw a significant drop of over 6% in after-hours trading.

Key Performance Metrics: For the quarter ended September 30, Netflix reported a net profit of $2.55 billion, a rise from $2.36 billion year-over-year. The earnings per share of $5.87 surpassed analysts' previous estimates, which expected the earnings per share to reach $6.94.

The total revenue for the quarter amounted to $11.51 billion, slightly below the average analyst expectation of $11.52 billion.

Regionally, the revenue from streaming services in the U.S. and Canada totaled $5.07 billion, reflecting a 17% increase compared to $4.32 billion in the same quarter last year. In Europe, the Middle East, and Africa, revenue from streaming services reached $3.70 billion, an 18% increase from $3.13 billion, with a year-on-year growth of 15% excluding currency fluctuations. Revenue from Latin America was $1.37 billion, up 10% from $1.24 billion year-on-year, with a 20% increase without considering currency fluctuations. Finally, the Asia-Pacific region generated $1.37 billion, reflecting a 21% increase from $1.13 billion year-on-year, with a 20% increase excluding currency effects.

The operating profit for the third quarter was $3.25 billion, an increase from $2.91 billion in the same period last year, while the operating profit margin declined to 28.2% from 29.6% a year prior.

Netflix reported net cash provided by operating activities was $2.83 billion, up from $2.33 billion in the same quarter last year; free cash flow was $2.66 billion, an increase from $2.19 billion year-on-year. The company now expects its annual free cash flow for fiscal year 2025 to reach approximately $9 billion (plus or minus a few hundred million), an upward revision from the prior estimate of $8 to $8.5 billion, reflecting a reduction in cash payment timing and content spending.

Netflix's cost of revenue for the third quarter rose to $6.16 billion, compared to $5.12 billion in the same quarter last year. Marketing expenses climbed to $786 million from $643 million, while technology and development spending was $854 million, up from $735 million, and general and administrative expenses increased to $458 million from $417 million.

In the third quarter, Netflix repurchased 1.5 million shares, using a total of $1.9 billion for buybacks. The company is also authorized to repurchase an additional $10.1 billion of stock under its existing share repurchase program.

As of the end of the third quarter, Netflix's total debt stood at $14.5 billion, with cash and cash equivalents of $9.3 billion.

Performance Outlook: Netflix forecasts its revenue for the fourth quarter of fiscal year 2025 to reach $11.96 billion, representing a year-on-year increase of 16.7%, which surpasses analyst expectations. The company anticipates an operating profit of $2.86 billion, up from $2.27 billion in the same quarter last year, and an operating margin of 23.9%, an increase from 22.2% a year earlier. Earnings per share are expected to be $5.45, higher than $4.27 a year prior, which also exceeds analysts' predictions.

Analysts had previously estimated Netflix's fourth-quarter revenue to reach $11.9 billion, with earnings per share of $5.42.

For the entire fiscal year 2025, Netflix projects a revenue of $45.1 billion, a 16% increase compared to fiscal year 2024, with a projected growth rate of 17% year-on-year excluding currency fluctuations. This aligns with the previous revenue growth expectation of 15% to 16% (16% to 17% excluding currency effects). The anticipated operating margin has been adjusted down to 29% from the previously predicted 30%, largely due to tax issues in Brazil.

Stock Price Movement: On the day of the report, Netflix's stock rose $2.79 to close at $1,241.35, a gain of 0.23%. However, in subsequent after-hours trading, by 6:44 PM EST (6:44 AM on October 22, Singapore time), the stock plummeted by $78.39 to $1,162.96, a drop of 6.32%. Over the past 52 weeks, Netflix's stock has reached a high of $1,341.15 and a low of $744.26.

Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.

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