The tax charge, linked to cross-border payments made between 2022 and 2025, led to a net income of $2.5 billion and diluted earnings per share of $5.87, below analysts’ expectations of $3 billion and $6.97. 

The company reported an operating margin of 28%, noting it would have exceeded its 31.5% guidance without the unexpected charge.

Chief Financial Officer Spence Neumann explained that the tax issue is not unique to Netflix, saying it affects “other global streaming and technology companies operating in Brazil.” The company added that the development does not mean a long-term threat to its financial outlook.

Despite the setback, Netflix forecast fourth-quarter revenue of $11.96 billion, slightly above Wall Street’s $11.90 billion projection, and projected earnings per share of $5.45, just ahead of analysts’ estimates. “We’re finishing the year with good momentum and have an exciting Q4 slate,” Netflix said in its letter to shareholders.

The company’s shares, which had risen 39% this year before the report, fell 5.6% to $1,171.24 in after-hours trading on Tuesday. Paolo Pescatore, an analyst at PP Foresight, said, “All things considered, this was another robust quarter, despite a blip due to an unforeseen expense.”

Netflix continues to diversify beyond streaming, investing heavily in advertising, gaming, and new technologies. The company said it recorded its best ad sales quarter in history, driven by its ad-supported plan launched in late 2022. 

Although it withheld figures, analysts believe advertising could become a growth driver by 2026 as subscriber growth steadies.

Netflix’s gaming vision is also in focus. With over 80 titles in development or live, including tie-ins to popular series like Stranger Things and The Queen’s Gambit, the company is testing cloud gaming in select regions to allow users to play directly on TVs and PCs without downloads. Analysts, however, caution that gaming will take time to deliver meaningful revenue.

Co-CEOs Ted Sarandos and Greg Peters addressed industry consolidation and acquisition speculation during an analyst call. Sarandos said the company remains selective: “Nothing is a must-have for us to meet our goals that we have for the business.” 

Peters added that ongoing mergers in the media sector don’t necessarily alter Netflix’s competitive position, stating, “Watching some of our competitors potentially get bigger via (mergers and acquisitions) does not change in and of itself, at least our view, the competitive landscape.”

Netflix plans to close the year with several major releases, including the final season of Stranger Things, new international hits like Berlin (a Money Heist spinoff), and two live NFL games on Christmas Day.

Although its path this quarter was impacted by a financial stumble, Netflix appears to be leaning into its strengths such as content, technology, and advertising, to maintain growth in the streaming market.

Unfortunately, the desire of ardent fans to see new episodes as soon as possible has been actively abused by fraudsters.

Kaspersky researchers found numerous examples of spam emails and phishing pages designed to steal these fans’ money and personal information.

Even though new episodes have already been released, fans are still not safe, because not all of them choose to watch the series on the official site.

When users refuse to pay for a subscription to a streaming service and choose to watch a movie or show on an illegitimate page, they end up paying a heavier price than they are saving – losing their personal information and card data.

Taking advantage of the interest around this popular series, some cybercriminals have offered users the ability “to watch the new episodes for only $1.” To access this offer they were asked to register a new account and enter their address and bank details.

After entering their information, fraudsters then drained victims’ wallets, without the victims gaining access to the new season of their favourite series.

Kaspersky experts have detected spam emails which also abuse the popularity of Stranger Things. Such emails are used to sell products of dubious quality and are spread through promotional emails without the consent of the recipient.

For example, in one of the spam emails users were given the opportunity to buy limited-edition graphic t-shirts related to the new season of Stranger Things. The site supported all languages and all currencies for payment.

It may not necessarily be a phishing page, but the fact that the ads for these products were promoted through spam and the domain itself was only recently created raises suspicions about the safety of buying from this page.

“The season four finale was a roller coaster for many viewers, including myself, as a personal fan of the show. However, the painful and challenging ending has only stoked fans’ appetite for more, with excitement already brewing for Stranger Things season five. And as we know, where there is audience demand, scammers will always try to cash in. We can therefore expect that cybercriminals will soon start to actively exploit the popularity of this last season. The danger for users remains as urgent as ever. Fans need to be careful as trying to save money on a streaming service subscription can lead to them losing much more than they could ever save,” comments Olga Svistunova, security expert at Kaspersky.

To avoid falling victim to scams, Kaspersky recommends users:

• Avoid links promising early viewings of films or TV series. If you have any doubts about the authenticity of the content, check with your entertainment provider;
• Check the authenticity of the website before entering personal data, and only use official, trusted web pages to watch or download movies. Double-check URL formats and company name spellings;
• Pay attention to the extensions of the files you are downloading. A video file will never have a .exe or .msi extension;
• Use a reliable security solution, such as Kaspersky Security Cloud, that identifies malicious attachments and blocks phishing sites.