Netflix, Inc. (NFLX) — Agentic Tribune

Item 1.Business

ABOUT US

Netflix, Inc. (“Netflix”, the “Company”, “registrant”, “we”, or “us”) is one of the world’s leading entertainment services offering TV series, films, games and live programming across a wide variety of genres and languages. Members can play, pause and resume watching as much as they want, anytime, anywhere, and can change their plans at any time.

Our core strategy is to grow our business globally within the parameters of our operating margin target. We strive to continuously improve our members' experience by offering compelling content that delights them and attracts new members. We aim to offer a range of pricing plans, including our ad-supported subscription plan, to meet a variety of consumer needs. We seek to drive conversation around our content to further enhance member joy, and we are continuously enhancing our user interface to help our members more easily choose content that they will find enjoyable.

BUSINESS SEGMENTS

We operate as one operating segment. Our revenues are primarily derived from monthly membership fees for services related to streaming content to our members. See Note 13, Segment and Geographic Information, in the accompanying notes to our consolidated financial statements for further detail.

COMPETITION

The market for entertainment video is intensely competitive and subject to rapid change. We compete with a broad set of activities for consumers’ leisure time, including other entertainment video providers, such as linear television, streaming entertainment providers (including those that provide pirated content), video gaming providers, open content platform providers, which provide access to user-generated and professionally produced content, as well as more broadly against other sources of entertainment, such as social media, that our members could choose in their moments of free time. We also compete against entertainment video providers and content producers in obtaining content for our service, both for licensed content and for original content projects.

While consumers may maintain simultaneous relationships with multiple entertainment sources, we strive for consumers to choose us in their moments of free time. We have often referred to this choice as our objective of “winning moments of truth.” In attempting to win these moments of truth with our members, we seek to continually improve our service, including both our technology and our content offerings.

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INTELLECTUAL PROPERTY

We regard our trademarks, service marks, copyrights, patents, domain names, trade dress, trade secrets, proprietary technologies and similar intellectual property as important to our success. We use a combination of patent, trademark, copyright and trade secret laws and confidentiality agreements to protect our proprietary intellectual property. Our intellectual property rights extend to our technology, business processes, the content we produce and distribute through our service, and the consumer products and experiences based thereon. We use the intellectual property of third parties in creating some of our content, merchandising our products and marketing our service. Our ability to provide our members with content they can watch depends on studios, content providers and other rights holders licensing rights, including distribution rights, to such content and certain related elements thereof, such as the public performance of music contained within the content we distribute. The license periods and the terms and conditions of such licenses vary. Our ability to protect and enforce our intellectual property rights is subject to certain risks and from time to time we encounter disputes over rights and obligations concerning intellectual property. We cannot provide assurance that we will prevail in any intellectual property disputes.

REGULATION

The media landscape and the internet delivery of content have seen growing regulatory action. Historically, media has been highly regulated in many countries. We are seeing some of these legacy regulatory frameworks be updated and expanded to address services like ours. In particular, we are seeing some countries update their cultural support legislation to include services like Netflix. This includes investment obligations, levies, and content catalog quotas. Some even restrict the extent of ownership rights we can have both in our service and in our content. In certain countries, regulators are also looking at restrictions that could require formal reviews of and/or adjustments to content that appears on our service in their country. In general these regulations impact all services and may make operating in certain jurisdictions more expensive or restrictive as to the content offerings we may provide.

HUMAN CAPITAL

Our business is to entertain the world across different countries, cultures, languages and tastes. To entertain an audience this global, our Company needs to reflect the world and the variety of stories we tell. To help ensure our workforce is representative of the members we serve, we employ people in multiple countries around the world and work to maintain a global culture of inclusion. We view our employees and our culture as key to our success. As of December 31, 2025, we had approximately 16,000 full-time employees. Of these, approximately 10,900 (68%) were located in the United States and Canada, 2,500 (16%) in Europe, Middle East, and Africa, 1,900 (12%) in Asia-Pacific and 700 (4%) in Latin America. We also have a number of employees engaged in content production, some of whom are part-time or temporary, and whose numbers fluctuate throughout the year and may be covered by collective bargaining agreements.

We believe an important component of our success is our company culture as detailed in the “Netflix Culture Memo”, which was updated in 2024. Our culture is focused on excellence and creating an environment where talented people can thrive — lifting ourselves, each other and our audiences higher and higher. We engage employees and seek feedback through regular town halls, surveys, business reviews and memos, which we often share broadly, inviting comments. We aim to attract and retain great people — representing a broad array of perspectives and skills — to work together as a dream team. For more people and cultures to see themselves reflected on screen, it is important that our employee base represents the communities we serve.

We aim generally to pay our employees at their personal top of market, and they generally are able to choose the form of their compensation between cash and stock options. This permits employee compensation to be highly personalized and reflective of each employee's individual needs and preferences. We conduct pay equity analyses at least annually, and have adopted practices to help ensure that employees from underrepresented groups are not being underpaid based on gender identity (globally) and race or ethnicity (United States (“U.S.”)) relative to others doing the same or similar work under comparable circumstances. We aim to rectify any pay gaps that we find through this analysis.

We care about the health and well-being of our employees and their families and provide a variety of benefit programs based on region, including health benefits. In the U.S., employees generally receive an annual cash health benefit allowance that they may allocate to medical, dental and vision premiums in a way that makes sense for them. Employees have access to a host of other benefits, including mental health, childcare, family planning and a company match for charitable donations.

We believe that our approach to human capital resources has been instrumental in our growth, and has made Netflix a desirable destination for employees.

OTHER INFORMATION

We maintain a website at www.netflix.com. The contents of our website are not incorporated in, or otherwise to be regarded as part of, this Annual Report on Form 10-K. We make available, free of charge on our website, access to our Annual Report on Form 10-K, our Quarterly Reports on Form 10-Q, our Current Reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as soon as reasonably practicable after we file or furnish them electronically with the Securities and Exchange Commission (“SEC”).

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Investors and others should note that we announce material financial and other information to our investors using our investor relations website (ir.netflix.net), SEC filings, press releases, public conference calls and webcasts. We use these channels as well as social media and blogs to communicate with our members and the public about our company, our services and other issues. It is possible that the information we post on social media and blogs could be deemed to be material information. Therefore, we encourage investors, the media, and others interested in our company to review the information we post on the social media channels and blogs listed on our investor relations website.

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Financial statements

data from SEC XBRL filings. Values are as-reported; restatements supersede originals. Values reported in .

From 10-Q filed 2026-07-17 (period ending 2026-06-30).

Item 2.Management’s Discussion and Analysis of Financial Condition and Results of Operations

Forward-Looking Statements

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of the federal securities laws. These forward-looking statements include, but are not limited to, statements regarding: our core strategy; our ability to improve our content offerings and service; our future financial performance, including expectations regarding revenues, deferred revenue, operating income and margin, net income, expenses, and profitability; liquidity, including the sufficiency of our capital resources, net cash provided by (used in) operating activities, access to financing sources and free cash flows; capital allocation strategies, including any stock repurchases or repurchase programs; stock price volatility; impact of foreign exchange rate fluctuations, including on net income and revenues; expectations regarding hedging activity; impact of interest rate fluctuations; adequacy of existing facilities; future regulatory changes and their impact on our business; intellectual property; cybersecurity; price changes and testing; accounting treatment for changes related to content assets; acquisitions; actions by competitors; partnerships; advertising; multi-household usage; member viewing patterns; dividends; future contractual obligations, including unknown content obligations and timing of payments; our global content and marketing investments, including investments in original programming, consumer products and experiences; impact of work stoppages; content amortization; resolution of tax examinations; tax

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expense; unrecognized tax benefits; deferred tax assets; resolution of disputes and other proceedings; our ability to effectively manage change and growth; our company culture; and our ability to attract and retain qualified employees and key personnel. These forward-looking statements are subject to risks and uncertainties that could cause actual results and events to differ materially from those included in forward-looking statements. Factors that might cause or contribute to such differences include, but are not limited to, those discussed in our Annual Report on Form 10-K for the year ended December 31, 2025 filed with the Securities and Exchange Commission (“SEC”) on January 23, 2026, in particular the risk factors discussed under the heading “Risk Factors” in Part I, Item 1A.

We assume no obligation to revise or publicly release any revision to any forward-looking statements contained in this Quarterly Report on Form 10-Q, unless required by law.

Investors and others should note that we announce material financial and other information to our investors using our investor relations website (ir.netflix.net), SEC filings, press releases, public conference calls and webcasts. We use these channels, as well as social media and blogs to communicate with our members and the public about our company, our services and other issues. It is possible that the information we post on social media and blogs could be deemed to be material information. Therefore, we encourage investors, the media, and others interested in our company to review the information we post on the social media channels and blogs listed on our investor relations website.

Overview

We are one of the world’s leading entertainment services offering TV series, films, games and live programming across a wide variety of genres and languages. Members can play, pause and resume watching as much as they want, anytime, anywhere, and can change their plans at any time.

Our core strategy is to grow our business globally within the parameters of our operating margin target. We strive to continuously improve our members’ experience by offering compelling content that delights them and attracts new members. We aim to offer a range of pricing plans, including our ad-supported subscription plan, to meet a variety of consumer needs. We seek to drive conversation around our content to further enhance member joy, and we are continuously enhancing our user interface to help our members more easily choose content that they will find enjoyable.

Results of Operations

The following represents our consolidated performance highlights:

	Three Months Ended						Change
	June 30, 2026			June 30, 2025			Q2’26 vs. Q2’25
	(in thousands, except percentages)
Financial Results:
Revenues	$	12,559,938		$	11,079,166		$	1,480,772		13	%
Constant currency change in revenues(1)										12	%
Operating income	$	4,192,610		$	3,774,694		$	417,916		11	%
Operating margin	33.4		%	34.1		%	(0.7)		%
Net income	$	3,401,414		$	3,125,413		$	276,001		9	%

(1) See the “Non-GAAP Constant Currency Information” section below for additional details on our use of constant currency revenue.

Operating margin for the three months ended June 30, 2026 decreased by approximately one percentage point as compared to the prior comparative period. The decrease in operating margin was primarily driven by technology and development expenses and sales and marketing expenses growing at a faster rate than revenue.

Net income for the three months ended June 30, 2026 increased $276 million as compared to the prior comparative period, primarily due to a $418 million increase in operating income, driven by a $1,481 million increase in revenues and partially offset by a $712 million increase in cost of revenues primarily due to an increase in content amortization. The impact of higher operating income was partially offset by a $161 million increase in the provision for income taxes.

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Revenues

We primarily derive revenues from monthly membership fees for services related to streaming content to our members. We offer a variety of streaming membership plans, the price of which varies by country and the features of the plan. As of June 30, 2026, pricing on our plans ranged from the U.S. dollar equivalent of $1 to $38 per month, and pricing on our extra member sub accounts ranged from the U.S. dollar equivalent of $2 to $10 per month. We expect that from time to time the prices of our membership plans in each country may change and we may test other plan and price variations.

We also earn revenues from advertisements presented on our streaming service, consumer products and experiences, and various other sources. Revenues earned from sources other than monthly membership fees were not a material component of revenues for the three and six months ended June 30, 2026 and June 30, 2025.

Three months ended June 30, 2026 as compared to the three months ended June 30, 2025

	Three Months Ended				Change
	June 30, 2026		June 30, 2025		Q2’26 vs. Q2’25
	(in thousands, except percentages)
Revenues	$	12,559,938	$	11,079,166	$	1,480,772	13	%

Six months ended June 30, 2026 as compared to the six months ended June 30, 2025

	Six Months Ended				Change
	June 30, 2026		June 30, 2025		YTD’26 vs. YTD’25
	(in thousands, except percentages)
Revenues	$	24,809,695	$	21,621,967	$	3,187,728	15	%

Revenues for the three and six months ended June 30, 2026 increased 13% and 15% as compared to the three and six months ended June 30, 2025, respectively, primarily due to the growth in memberships, price increases, and increased advertising revenue. Additionally, revenues for the three and six months ended June 30, 2026 as compared to the same periods in 2025, were impacted by favorable changes in foreign exchange rates, net of hedging.

The following tables summarize revenues by region for the three and six months ended June 30, 2026 and 2025. Total revenues are inclusive of hedging gains (losses) of $(48) million and $(180) million for the three and six months ended June 30, 2026, respectively, and $(37) million and $127 million for the three and six months ended June 30, 2025, respectively. See Note 8 Derivative Financial Instruments and Hedging Activities to the consolidated financial statements for further information regarding the Company’s derivative and non-derivative financial instruments.

Three months ended June 30, 2026 as compared to the three months ended June 30, 2025

	Three Months Ended				Change
	June 30, 2026		June 30, 2025		Q2’26 vs. Q2’25
	(in thousands, except percentages)
United States and Canada (UCAN)	$	5,431,667	$	4,929,003	$	502,664	10	%
Europe, Middle East, and Africa (EMEA)	4,033,515		3,538,175		495,340		14	%
Latin America (LATAM)	1,584,290		1,306,735		277,555		21	%
Asia-Pacific (APAC)	1,510,466		1,305,253		205,213		16	%
Total Revenues	$	12,559,938	$	11,079,166	$	1,480,772	13	%

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Six months ended June 30, 2026 as compared to the six months ended June 30, 2025

	Six Months Ended				Change
	June 30, 2026		June 30, 2025		YTD’26 vs. YTD’25
	(in thousands, except percentages)
United States and Canada (UCAN)	$	10,676,965	$	9,546,101	$	1,130,864	12	%
Europe, Middle East, and Africa (EMEA)	8,031,934		6,942,851		1,089,083		16	%
Latin America (LATAM)	3,081,348		2,568,669		512,679		20	%
Asia-Pacific (APAC)	3,019,448		2,564,346		455,102		18	%
Total Revenues	$	24,809,695	$	21,621,967	$	3,187,728	15	%

Non-GAAP Constant Currency Information

We believe the non-GAAP financial measure of constant currency revenue is useful in analyzing period-to-period comparisons in revenues absent foreign currency fluctuations. However, this non-GAAP financial measure should be considered in addition to, not as a substitute for, or superior to other financial measures prepared in accordance with GAAP.

In order to exclude the effect of foreign currency rate fluctuations on revenue, we calculate current period revenue assuming foreign exchange rates had remained constant with foreign exchange rates from each of the corresponding months of the prior-year period and exclude the impact of hedging gains or losses realized as revenues. Constant currency percentage change in revenues is calculated as the percentage change between current period constant currency revenue and the prior comparative period revenue. The impact of hedging gains or losses is excluded from both the current and prior periods.

The tables below summarize constant currency revenues by region for the three and six months ended June 30, 2026 and the constant currency percentage change in revenues by region for the three and six months ended June 30, 2026 as compared to the three and six months ended June 30, 2025:

	Three Months Ended								Three Months Ended						Change
	June 30, 2026								June 30, 2025						Q2’26 vs. Q2’25
	As Reported		Constant Currency Adjustment		Hedging (Gains) Losses Included in Revenues		Constant Currency Revenues		As Reported		Hedging (Gains) Losses Included in Revenues		Revenues Less Hedging Impact		Reported Change		Constant Currency Change
	(in thousands, except percentages)
UCAN	$	5,431,667	$	(4,883)	$	(3,284)	$	5,423,500	$	4,929,003	$	(6,431)	$	4,922,572	10	%	10	%
EMEA	4,033,515		(130,725)		58,490		3,961,280		3,538,175		42,049		3,580,224		14	%	11	%
LATAM	1,584,290		(67,459)		11,494		1,528,325		1,306,735		14,033		1,320,768		21	%	16	%
APAC	1,510,466		28,880		(19,070)		1,520,276		1,305,253		(12,266)		1,292,987		16	%	18	%
Total Revenues	$	12,559,938	$	(174,187)	$	47,630	$	12,433,381	$	11,079,166	$	37,385	$	11,116,551	13	%	12	%

	Six Months Ended								Six Months Ended						Change
	June 30, 2026								June 30, 2025						YTD’26 vs. YTD’25
	As Reported		Constant Currency Adjustment		Hedging (Gains) Losses Included in Revenues		Constant Currency Revenues		As Reported		Hedging (Gains) Losses Included in Revenues		Revenues Less Hedging Impact		Reported Change		Constant Currency Change
	(in thousands, except percentages)
UCAN	$	10,676,965	$	(25,189)	$	(3,747)	$	10,648,029	$	9,546,101	$	(20,983)	$	9,525,118	12	%	12	%
EMEA	8,031,934		(549,596)		172,141		7,654,479		6,942,851		(63,176)		6,879,675		16	%	11	%
LATAM	3,081,348		(127,971)		42,780		2,996,157		2,568,669		97		2,568,766		20	%	17	%
APAC	3,019,448		(11,943)		(31,027)		2,976,478		2,564,346		(43,349)		2,520,997		18	%	18	%
Total Revenues	$	24,809,695	$	(714,699)	$	180,147	$	24,275,143	$	21,621,967	$	(127,411)	$	21,494,556	15	%	13	%

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Cost of Revenues

Cost of revenues primarily consists of the amortization of content assets. Other costs of revenues include expenses associated with the acquisition, licensing and production of content, streaming delivery costs, and other operating costs.

Expenses related to the acquisition, licensing and production of content not included in content amortization may include payroll, stock-based compensation, facilities, and other personnel-related expenses, costs associated with obtaining rights to music included in our content, overall deals with talent, miscellaneous production-related costs and participations and residuals. Streaming delivery costs are primarily related to our global content delivery network (“Open Connect”). We have built our own Open Connect network to help us efficiently stream a high volume of content to our members over the internet. Delivery expenses, therefore, include equipment costs related to Open Connect, payroll and related personnel expenses and all third-party costs, such as cloud computing costs, associated with delivering content over the internet. Other operating costs include customer service and payment processing fees, including those we pay to our integrated payment partners, as well as other costs incurred in making our content available to members.

Three months ended June 30, 2026 as compared to the three months ended June 30, 2025

	Three Months Ended						Change
	June 30, 2026			June 30, 2025			Q2’26 vs. Q2’25
	(in thousands, except percentages)
Cost of revenues	$	6,036,965		$	5,325,311		$	711,654	13	%
As a percentage of revenues	48		%	48		%

The increase in cost of revenues was primarily due to a $479 million increase in content amortization relating to our existing and new content. No individual component of the remaining increase in cost of revenues was material.

Six months ended June 30, 2026 as compared to the six months ended June 30, 2025

	Six Months Ended						Change
	June 30, 2026			June 30, 2025			YTD’26 vs. YTD’25
	(in thousands, except percentages)
Cost of revenues	$	11,925,203		$	10,588,458		$	1,336,745	13	%
As a percentage of revenues	48		%	49		%

The increase in cost of revenues was primarily due to an $874 million increase in content amortization relating to our existing and new content. No individual component of the remaining increase in cost of revenues was material.

Sales and Marketing

Sales and marketing expenses consist primarily of expenses for promotional activities such as digital and television advertising, and certain payments made to marketing and advertising sales partners. Our marketing partners include consumer electronics manufacturers, multichannel video programming distributors, mobile operators, and internet service providers. Our advertising sales partners include advertising technology providers and advertising agencies. Sales and marketing expenses also include payroll, stock-based compensation, facilities, and other related expenses for personnel that support advertising sales and marketing activities.

Three months ended June 30, 2026 as compared to the three months ended June 30, 2025

	Three Months Ended						Change
	June 30, 2026			June 30, 2025			Q2’26 vs. Q2’25
	(in thousands, except percentages)
Sales and marketing	$	823,838		$	713,265		$	110,573	16	%
As a percentage of revenues	7		%	6		%

The increase in sales and marketing expenses was primarily driven by a $71 million increase in marketing expenses, coupled with a $47 million increase in personnel-related costs, primarily due to the growth in advertising sales headcount.

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Six months ended June 30, 2026 as compared to the six months ended June 30, 2025

	Six Months Ended						Change
	June 30, 2026			June 30, 2025			YTD’26 vs. YTD’25
	(in thousands, except percentages)
Sales and marketing	$	1,666,055		$	1,401,635		$	264,420	19	%
As a percentage of revenues	7		%	6		%

The increase in sales and marketing expenses was primarily driven by a $184 million increase in marketing expenses, coupled with a $95 million increase in personnel-related costs, primarily due to the growth in advertising sales headcount.

Technology and Development

Technology and development expenses consist primarily of payroll, stock-based compensation, facilities, and other related expenses for technology personnel responsible for making improvements to our service offerings, including testing, maintaining and modifying our user interface, our recommendations and infrastructure. Technology and development expenses also include costs associated with general use computer hardware and software.

Three months ended June 30, 2026 as compared to the three months ended June 30, 2025

	Three Months Ended						Change
	June 30, 2026			June 30, 2025			Q2’26 vs. Q2’25
	(in thousands, except percentages)
Technology and development	$	1,007,675		$	824,683		$	182,992	22	%
As a percentage of revenues	8		%	7		%

The increase in technology and development expenses was primarily due to a $142 million increase in personnel-related costs.

Six months ended June 30, 2026 as compared to the six months ended June 30, 2025

	Six Months Ended						Change
	June 30, 2026			June 30, 2025			YTD’26 vs. YTD’25
	(in thousands, except percentages)
Technology and development	$	1,967,371		$	1,647,506		$	319,865	19	%
As a percentage of revenues	8		%	8		%

The increase in technology and development expenses was primarily due to a $247 million increase in personnel-related costs.

General and Administrative

General and administrative expenses consist primarily of payroll, stock-based compensation, facilities, and other related expenses for corporate personnel. General and administrative expenses also include professional fees and other general corporate expenses.

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Three months ended June 30, 2026 as compared to the three months ended June 30, 2025

	Three Months Ended				Change
	June 30, 2026		June 30, 2025		Q2’26 vs. Q2’25
	(in thousands, except percentages)
General and administrative	$	498,850	$	441,213	$	57,637	13

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Held by

holders ( registered funds via N-PORT, institutional investors via 13F). Showing top by dollar value.

Holder	Type	ETF	MF	Position ($)	% of holder	Δ % of holder	Holder AUM

Recent insider activity

Last 90 days. Open-market trades (purchases & sales) by directors, officers, and 10%+ owners. 7 transactions across 6 insiders. Net: -899,839 shares, -$80,142,916.

Date	Insider	Role	Action	Shares	Price	Value
2026-06-17	SMITH BRADFORD L	Director	Sell	-35,990 ×2	$77.52	-$2,789,799
2026-06-01	HASTINGS REED	Director	Sell	-386,700 ×2	$85.97	-$33,244,035
2026-05-07	Neumann Spencer Adam	Chief Financial Officer	Sell	-9,253	$88.95	-$823,075
2026-05-07	Peters Gregory K	Co-CEO	Sell	-27,312	$88.69	-$2,422,421
2026-05-05	SARANDOS THEODORE A	Co-CEO	Sell	-27,312 ×3	$87.97	-$2,402,627
2026-05-05	HYMAN DAVID A	Chief Legal Officer	Sell	-5,722	$88.08	-$504,021
2026-05-01	HASTINGS REED	Director	Sell	-407,550 ×3	$93.13	-$37,956,938

Source: SEC Form 4 filings.

Next expected filings

~2026-10-21 10-Q expected by 2026-11-11 (in 85 days)
~2027-01-23 10-K expected by 2027-02-26 (in 179 days)
~2027-04-16 10-Q expected by 2027-05-07 (in 262 days)
~2027-07-16 10-Q expected by 2027-08-06 (in 353 days)

Predicted from historical filing cadence; not an SEC commitment.

Recent SEC filings

2026-07-22 8-K Other Events; Financial Statements and Exhibits
2026-07-21 424B5 Prospectus Supplement
2026-07-17 10-Q Quarterly Report
2026-07-16 8-K Earnings Release; Financial Statements and Exhibits
2026-06-05 8-K Shareholder Vote Results; Other Events
2026-04-23 8-K Other Events
2026-04-17 10-Q Quarterly Report
2026-04-16 DEF 14A Proxy Statement
2026-04-16 8-K Earnings Release; Officer/Director Change; Financial Statements and Exhibits
2026-02-27 8-K Material Agreement Terminated
2026-01-23 10-K Annual Report
2026-01-20 8-K Earnings Release; Financial Statements and Exhibits
2026-01-20 8-K Material Agreement Entered; Regulation FD Disclosure; Financial Statements and Exhibits
2025-12-22 8-K Material Agreement Entered; Material Financial Obligation; Financial Statements and Exhibits
2025-12-05 8-K Material Agreement Entered; Regulation FD Disclosure; Financial Statements and Exhibits

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