Netflix's Big Wins and Misses in Q3 2025

Revenue Boost and Earnings Miss

Netflix's third quarter of 2025 brought a 17% revenue boost, but the company missed earnings targets. This was partly due to an unexpected tax dispute expense in Brazil. Despite this setback, Netflix remains optimistic about its future.

Focus on Ad Sales and AI-Driven Ads

The company is shifting focus to ad sales and AI-driven ad formats. They had their best ad sales quarter ever and plan to double ad revenue in 2025. Netflix is also testing new AI-powered ad formats to make ads more relevant and faster to develop.

Hit Shows and Revenue Growth

Netflix's success in Q3 was largely driven by the hit animated musical "KPop Demon Hunters." The movie's popularity led to a theatrical re-release and merchandise deals with Mattel and Hasbro. Other shows like "Wednesday" Season 2 and "Bon Appétit" also contributed to their success.

Shift to Revenue as Growth Indicator

Netflix has stopped reporting subscriber numbers and is now focusing on revenue as a growth indicator. Revenue grew in all regions, with the biggest jump in the Asian-Pacific territories at 21%.

Q4 Lineup and Future Forecast

Looking ahead, Netflix has a packed lineup for Q4, including the final season of "Stranger Things" and live events like NFL games.

Despite the earnings miss, Netflix's revenue forecast for the year remains strong. They expect to end 2025 with about $9 billion in free cash flow, up from previous forecasts. This growth is attributed to the timing of cash payments and lower content spending.