Netflix Lags Q3 Earnings Yet Ups Free Cash Flow View: ETFs in Spotlight

Netflix (NFLX), the largest shareholder in the global streaming service market, reported dismal third-quarter 2025 results after the closing bell on Oct. 21. The company missed on earnings and revenues, which caused its share prices to tank more than 10% in the last trading session. This pullback may offer a golden opportunity for exchange-traded fund (ETF) investors seeking diversified exposure to the world’s leading streaming powerhouse, as ETFs provide a balanced way to capture Netflix’s long-term growth potential while hedging against the volatility that often follows individual earnings disappointments.These funds include First Trust Dow Jones Internet Index Fund (FDN), FT Vest Dow Jones Internet & Target Income ETF (FDND), MicroSectors FANG+ ETN (FNGS), Communication Services Select Sector SPDR Fund (XLC) and Invesco Next Gen Media and Gaming ETF (GGME). But before diving into the specifics of these ETFs, let us dig into NFLX’s overall third-quarter performance. A Brief Analysis of NFLX’s Q3 ResultsNetflix’s third-quarter 2025 earnings missed the Zacks Consensus Estimate by 14.8%. Its revenues also lagged the consensus mark slightly by 0.1%. The primary reason behind the bottom-line miss was a one-time $619 million expense related to an ongoing dispute with Brazilian tax authorities. However, on a year-over-year basis, the third-quarter results reflected improvement on both top and bottom-line counts.Regionwide, NFLX registered double-digit growth in revenue performance (year over year) from all regions, including UCAN (United States and Canada), EMEA (Europe, Middle East and Africa), Latin America and Asia-Pacific. In particular, Netflix’s third-quarter results were dominated by the unprecedented success of the animated musical film KPop Demon Hunters, which has become Netflix's most popular film in its history, with more than 325 million views.Other international content, like the British political thriller- Hostage and South Korean drama-Bon Appétit, Your Majesty, also performed well. The company also scored a significant success in live programming with the broadcast of the Canelo vs. Crawford boxing match on Sept. 13, which generated more than 41 million viewers, making it the most-viewed men's championship boxing match of the 21st century.Looking ahead, Netflix remains optimistic about its fourth-quarter performance, with a standout slate. The upcoming quarter boasts a robust lineup, including the epic final season of Stranger Things, season 2 of Squid Game: The Challenge, new series like Death by Lightning and The Beast in Me, as well as films like Guillermo del Toro’s Frankenstein, Kathryn Bigelow’s A HOUSE OF DYNAMITE and Rian Johnson's Wake Up Dead Man: A Knives Out Mystery. In terms of guidance, Netflix expects to generate revenues worth $11.96 billion during the fourth quarter of 2025, which reflects growth of 16.7% year over year.For full-year 2025, Netflix now expects revenues of $45.1 billion compared with the previous guidance of $44.8-$45.2 billion. Netflix expects 2025 free cash flow forecast to be approximately $9 billion (plus or minus a few hundred million dollars), up from the prior forecast of $8.0-$8.5 billion. The improved forecast reflects the timing of cash payments and lower content spend.Following NFLX’s third-quarter results, JPMorgan analyst Doug Anmuth maintained a Neutral rating and lowered the price target from $1,300 to $1,275, citing his concern about the company’s lack of revenue upside in the second half of the year despite delivering a solid third-quarter result (as reported by Fidelity). ETFs in FocusFirst Trust Dow Jones Internet Index Fund (FDN)This fund, with net assets worth $7.68 billion, provides exposure to 41 companies that come from the broad Internet industry. Of these, Netflix takes the first spot, accounting for a 9.84% share.FDN has surged 14.5% year to date and charges 49 basis points (bps) in fees. Its volume is good at an average of 485,807 shares a day. FT Vest Dow Jones Internet & Target Income ETF (FDND) This is an actively managed fund, with net assets worth $9.4 million, which provides exposure to 42 companies, with the intention to offer investors current income with a secondary objective of providing capital appreciation. Of these, Netflix takes the first spot, accounting for a 9.84% share.FDND has surged 13.7% year to date and charges 75 bps in fees. Its volume is at an average of 3,206 shares a day. MicroSectors FANG+ ETN (FNGS)This fund, with net assets worth $531 million, provides exposure to 10 highly-traded growth stocks of next-generation technology and tech-enabled companies. Of these, Netflix takes the fifth spot, accounting for a 10.1% share.FNGS has surged 21.9% year to date and charges 58 bps in fees. Communication Services Select Sector SPDR Fund (XLC) This fund, with net assets worth $26.68 billion, provides exposure to 24 companies from telecommunication services, media, entertainment and interactive media & services industries. Of these, Netflix takes the fourth spot, accounting for a 7.14% share.XLC has soared 20.5% year to date and charges 8 bps in fees. It trades in a heavy volume of around 1.5 million shares. Invesco Next Gen Media and Gaming ETF (GGME)This fund, with a net asset value of $63.98 as of Oct 22, 2025, provides exposure to 103 companies that cover technologies or products that contribute to future media through direct revenues. Of these, Netflix takes the second spot, accounting for an 8.05% share.GGME has surged 24.9% year to date and charges 71 bps in fees. Its volume is at an average of 5,663 shares a day.Boost Your Portfolio with Our Top ETF InsightsZacks' exclusive Fund Newsletter delivers actionable information, top news and analysis, as well as top-performing ETFs, straight to your inbox every week.Don’t miss out on this valuable resource. It’s free!Get it now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Netflix, Inc. (NFLX): Free Stock Analysis Report First Trust Dow Jones Internet ETF (FDN): ETF Research Reports Communication Services Select Sector SPDR ETF (XLC): ETF Research Reports MicroSectors FANG+ ETN (FNGS): ETF Research Reports Invesco Next Gen Media and Gaming ETF (GGME): ETF Research ReportsThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks