Netflix reported lower-than-expected profits in the third quarter of 2025 after accounting for billions in expenses related to a tax dispute in Brazil. According to the financial statement released on Tuesday (21), the company made a profit of $2,5 billion between July and September, lower than the $3 billion expected by analysts.
The streaming platform explained that the result was affected by an ongoing tax process in Brazil, which forced the company to record an extraordinary expense of $619 million.
With the announcement, Netflix shares fell, causing the company's market value to fall from $527 billion to $494 billion (from R$2,8 trillion to R$2,6 trillion) on the same day.
Tax dispute in Brazil
The expense is related to the Economic Domain Intervention Contribution (Cide), a Brazilian tax whose application was expanded by a Supreme Federal Court (STF) decision in August. The change also now affects foreign technology and streaming companies, such as Netflix.
The company does not usually disclose its revenue specifically in Brazil, but admitted that the impact of the new Cide interpretation directly affected its overall results.
The case reignites the debate over the taxation of digital services in the country, an issue that also involves other technology giants and which could serve as a precedent for future charges in different markets.
