Bloomberg Intelligence Netflix Shares Fall most Since 2022 as Tax Hit Spooks Investors
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Oct 22, 2025 Join John Butler, a Senior Telecom Analyst at Bloomberg Intelligence, as he dissects AT&T's recent quarterly results, highlighting revenue misses amid aggressive promotional efforts. He also explores AT&T's strategic shift towards fiber broadband and its implications in the competitive landscape. The discussion dives into Netflix's precarious situation due to a tax surprise in Brazil and its potential interest in acquiring Warner Bros. assets, all while keeping an eye on evolving trends in the telecom sector.
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Brazil Tax Masked Strong Netflix Margins
- Netflix's Brazil tax hit depressed reported operating margins significantly in Q3 but didn't change underlying fundamentals.
- Stripping the tax, Netflix would have posted record operating margins near 34% versus a guided 31.5%.
Netflix Eyes Studio Deals Selectively
- Netflix left the door open to buy Warner Bros. studio assets while excluding cable networks.
- Owning a top-tier studio would be a generational opportunity but not strictly "do or die" for Netflix's lead.
Content Scale And AI Cost Relief
- Netflix still spends heavily on content, around $17.5–18 billion annually, maintaining producer appeal.
- AI tools may cut content costs by roughly 5–10%, potentially easing future spending.