Netflix fell short of Wall Street analysts’ earnings expectations in the third quarter and said a dispute with Brazilian tax authorities kept operating margins from meeting its guidance.

Revenue came in on target during the June-to-September period, reaching $11.51 billion.

Earnings per share of $5.87 on a diluted basis came in more than a dollar shy of analysts’ consensus of $6.97.

In its quarterly letter to shareholders, the company said its operating margin of 28% undershot guidance of 31.5% “due to an expense related to an ongoing dispute with Brazilian tax authorities that was not in our forecast. Absent this expense, we would have exceeded our Q3’25 operating margin forecast. We don’t expect this matter to have a material impact on future results.”

Shares in Netflix slumped on

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