Netflix has released its Q3 earnings, announcing to the world that it had recorded its “best ad sales quarter ever” and “doubled” its US upfront commitments.
The company’s overall revenue grew 17 per cent year-on-year from US$9.8 billion to AU$11.5 billion (AU$15.1 to $17.72 billion). In an earnings call with investors, Netflix’s co-CEO Gregory Peters said the business had “more than doubled” its ad revenue in 2025 but did not provide specific numbers.
The APAC region generated US$1.37 billion (AU$2.11 billion) of revenue for Netflix in Q3, up 21 per cent year-on-year. That’s just under 12 per cent of the business’ entire revenue. The US and Canada generated nearly US$5.1 billion (AU$7.82 billion) or about 44 per cent of its revenue.
In a letter to shareholders, Netflix struck a very rosy tone—in contrast to some local media owners, perhaps.
“Q3’25 operating income totalled US$3.2 billion, up 12 per cent year-over-year. Operating margin was 28 per cent vs 30 per cent in Q3’24,” it said, noting the margin was below its forecast due to some ongoing issues with the Brazilian tax authorities.
“In Q4’25, we expect revenue growth of 17 per cent driven by growth in members, pricing, and ad revenue. We project an operating margin of 23.9 per cent, a two percentage point year over year improvement.
“This means that for the full year 2025, we expect US$45.1 billion in revenue, in-line with our prior expectations for 15-16 per cent revenue growth.”
That said, Netflix’s monetisation is still driven primarily through subscriptions.
“It’s exciting to see our progress in 2025, more than doubling our ads revenue there. While, of course, it’s still off a small base relative to the size of our subscription revenue. But we feel like we’ve established the fundamentals of the business now. We’ve proven we know how to scale. We see plenty of room for growth ahead,” said Peters in an earnings call.
“Perhaps even more importantly, though, we’re seeing even higher rates of growth in programmatic. And that’s more important because we believe that’s going to be an increasing part of that incremental revenue contribution going forward. What are driving those results? Advertisers are excited about our growing scale. We’ve got a highly attentive and engaged audience. The rollout of our ad tech stack means we’ve got more formats. We’ve got more measurement. We’ve got more ways to buy. And of course, our slate is a critical and important source of competitive differentiation. So while I’ll refrain from offering any ’26 guidance, I would say we are feeling good about our growth trajectory.”
Peters added its key priorities for the coming year was to “make it easier for advertisers to buy on our service”.
“We want to increase the diversity of advertisers we have. That’s a key direction of growth for us that enables that revenue growth. We’re adding more demand sources like Amazon DSP, AJA in Japan. We’re improving our own ad sales and go-to-market capabilities. We’re also iterating on ad formats. Later this quarter, we’ll be introducing ad interactivity,” he continued.
“And taking that into 2026, you’re going to see us continue to develop along some of those lines. So more ways to buy, more data for targeting and media planning capabilities globally more modular in interactive ad formats with enhanced AI capabilities and more measurement functionality in all of our markets.
“And then in 2027, we get to pivot to make more focused investments in data capabilities such as ML-based optimisation, advanced measurement, advanced targeting.”
