Netflix shares slide on rare earnings miss — snapping six-quarter profit streak

Core Insights - Netflix missed earnings expectations due to a significant tax dispute in Brazil, breaking a six-quarter streak of exceeding analyst projections [1][2] - The company reported a net income of $2.5 billion, or $5.87 per share, representing an 8% year-over-year increase, while revenue rose 17% to $11.5 billion, matching analyst forecasts [4][5] Financial Performance - The unexpected $619 million expense related to the Brazilian tax dispute contributed to the earnings shortfall [2] - Despite the earnings miss, Netflix's revenue growth indicates an increase in its worldwide subscriber count from approximately 302 million at the end of last year [9] Market Reaction - Following the earnings report, Netflix's shares fell about 6% in extended trading, indicating investor concerns despite the revenue meeting expectations [3][8] - Analysts expressed mixed views, with some highlighting potential signs of a slowdown in subscriber growth, while others maintained confidence in Netflix's underlying business model [4][7] Strategic Direction - Netflix has shifted its focus from subscriber growth to delivering solid financial performance, ceasing the disclosure of subscriber numbers since the end of last year [7] - The company is diversifying its content offerings by adding live sports and video games, with plans to expand into video podcasts from Spotify next year [12] Audience Metrics - Netflix co-CEO Ted Sarandos stated that the total worldwide audience, including multiple individuals in the same household, is approaching 1 billion [10][11]