KUALA LUMPUR, Dec 5 (Bernama) -- Bursa Malaysia closed lower on Friday amid mixed regional market performance as investors turned cautious over a possible rate hike by the Bank of Japan (BOJ) and upcoming US economic data that may influence the Federal Reserve’s (Fed) interest rate decision next week. At 5 pm, the FTSE Bursa Malaysia KLCI (FBM KLCI) pared most earlier losses to settle 4.55 points easier, or 0.28 per cent, to 1,616.52 from Thursday’s close of 1,621.07. The benchmark index, which opened 0.37 of-a-point lower at 1,620.70, moved between 1,609.67 and 1,621.25 throughout the day. The broader market was negative, with decliners outpacing advancers 604 to 439. A total of 550 counters were unchanged, 1,151 untraded, and 18 suspended. Turnover declined to 3.17 billion units worth RM2.24 billion from 4.48 billion units worth RM2.75 billion yesterday. Rakuten Trade Sdn Bhd vice-presiden...
Netflix’s third-quarter 2025 results met revenue expectations but missed on earnings due to a US$619 million tax charge tied to a dispute with Brazilian authorities — a one-time event that weighed heavily on profitability and sent the stock down more than 6% in after-hours trading.
Financial Overview
Revenue: US$11.51 billion (+17.2% YoY), in line with consensus.
Operating Margin: 28%, below guidance of 31.5% due to the tax charge. Excluding this, margins would have beaten expectations.
Earnings per Share (EPS): US$5.87 vs. US$6.87 expected, impacted by the one-time charge.
Free Cash Flow: US$2.7 billion (+23% YoY), supported by operational efficiency and lower content spend.
Full-Year Outlook: Revenue projected at US$45.1 billion (+16% YoY) with an operating margin of 29%.
While profitability was temporarily hit, Netflix reaffirmed strong fundamentals, with free cash flow guidance raised to around US$9 billion for FY2025.
Content Fuels Growth
Subscriber momentum was driven by major titles including Wednesday, Squid Game Season 3, and KPop Demon Hunters— now Netflix’s most-watched film ever with over 236 million views.
Upcoming Q4 content — Stranger Things 5 (Finale), The Diplomat S3, and Guillermo del Toro’s Frankenstein — is expected to sustain engagement and growth into year-end.
Advertising Business Expansion
Netflix’s ad business continues to gain traction:
2025 ad revenue is expected to more than double, reaching about US$3 billion (Bloomberg estimate).
Global integration of Amazon DSP and AJA DSP (Japan) begins in Q4.
AI-driven ad testing aims to enhance performance and member experience.
Ad revenue could rise to US$5 billion by 2026, roughly 10% of total sales.
Market Share and Diversification
Netflix’s TV viewership share reached record highs — up 15% in the U.S. and 22% in the U.K. since Q4 2022.
The company is also broadening its entertainment footprint:
Partnering with Spotify for 16 video podcasts in 2026.
Expanding into live sports (NFL Christmas games, Jake Paul vs. Tank Davis fight).
Introducing party games like Boggle Party and LEGO Party! to deepen user engagement.
Investor Takeaway
Despite a temporary earnings hit, Netflix’s core growth story remains intact. Revenue growth, disciplined cost control, and rising ad monetization position the company well for 2026.
However, analysts caution that the stock’s high valuation — trading above most large-cap growth peers — leaves limited room for multiple expansion. Barclays noted that “while Netflix remains a category leader, its valuation already prices in much of the optimism around future earnings growth.”
Bottom Line:
Netflix’s fundamentals remain strong, but investors may stay cautious as near-term valuation pressure meets one-off earnings noise.
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