Netflix Q3 Earnings Preview: Double Growth in Revenue and Profit Expected Amid Wall Street's Universal Optimism

TradingKey - Streaming giant Netflix is set to release its Q3 2025 financial results after U.S. market close on Tuesday, October 21, with the current market sentiment largely optimistic.

According to data provided by LSEG, analysts expect Netflix's third-quarter revenue to grow 17% year-over-year to $11.51 billion, with earnings per share projected to increase 29% to $6.97.

This optimistic outlook stems from Netflix's proactive expansion and strong performance across multiple business dimensions. The company has not only continued to develop new revenue streams by introducing live sports broadcasting and expanding its advertising business to enrich its streaming service content and format, but has also strategically targeted the gaming market valued at over $100 billion. Through interactive cloud gaming services and integration with television platforms, Netflix is transforming its streaming platform into a "game console," allowing users to play games directly on their TV screens. Its initial strategy focuses on party-style games to enhance users' social engagement.

These diversified growth engines and substantial profit potential partially justify its high forward price-to-earnings ratio of 45 times compared to the broader market, and the market still expects the third-quarter earnings report to reaffirm its attractive long-term prospects.

Wall Street Unanimously Bullish on Netflix Earnings

UBS analyst John Hodulik noted that subscriber growth, optimized pricing strategies, and continued increases in advertising revenue will be the core drivers propelling Netflix's third-quarter revenue and operating profit growth of 17% and 25%, respectively.

He believes that the return of hit series like "Squid Game" and popular Korean dramas such as "The Witcher" have significantly boosted third-quarter user engagement and platform profitability. Hodulik further projects that this positive trend will continue into the fourth quarter, given the ongoing contributions from highly anticipated shows and events such as "Monster Slime," "The Witcher," "Stranger Things," and NFL content.

KeyBanc analyst Justin Patterson expects no major surprises in Netflix's third-quarter earnings performance, with significant improvements in content lineup being the key factor driving increased viewership in the third quarter. Additionally, fourth-quarter growth catalysts like "Stranger Things," which are already known to the market, have laid a solid foundation for subsequent performance.

Bank of America analyst Jessica Reif Ehrlich also mentioned the success of Korean dramas in her report, stating: “We anticipate that Netflix’s third-quarter results will be at least in line with guidance on key metrics including revenue, operating income and earnings per share.”

Ehrlich also highlighted Netflix's continued execution of its live event strategy, such as the Canelo-Crawford boxing match, which reportedly attracted 41.4 million viewers, becoming the most-watched men's boxing championship of the century; and "KPop Demon Hunters," released in August, which became the most-watched film in Netflix history with 325 million views. These cases fully demonstrate the company's exceptional ability to transform relatively unknown IPs into global hits.

Additionally, Wolfe Research analyst Peter Supino and BMO Equity Research analyst Brian Pitz have joined the bullish camp. Supino maintains an "Outperform" rating on Netflix with a target price of $1,390. Pitz also maintains an "Outperform" rating with a target price set at $1,425.

Netflix's stock price has risen over 35% year-to-date. According to TradingKey data, analysts have set an average target price of $1,362.084 for the stock, indicating approximately 13.57% upside potential from the latest closing price of $1,199.36.

The market generally believes that if the financial performance is impressive, especially supported by its promising earnings guidance, NFLX's earnings expectations could rebound or even reach new highs after the earnings release. However, the market also notes potential risks, such as if the performance falls short of expectations or if there is significant profit-taking, which could trigger short-term selling pressure on the stock.