Netflix Inc.
NFLXFinancial Analysis · Updated May 12, 2026 · Coverage 2026-Q2
Latest Q Revenue
$12.3B
Q1 2026 · +16.2% YoY
TTM ROIC
43.6%
FY2025 · NOPAT / Invested Capital (capitalized content assets on balance sheet; excludes off-balance-sheet content obligations) · WACC ~9% · Moat spread +34.6pp
Financial Snapshot
ticker: NFLX step: 04 generated: 2026-05-12 source: quick-research
Netflix, Inc. (NFLX) — Financial Snapshot
Income Statement Summary
| Metric | FY2023 | FY2024 | FY2025 | YoY |
|---|---|---|---|---|
| Revenue | $33.7B | $39.0B | $44.0B | +13% |
| Gross Margin | 41.5% | 43.5% | 45.0% | +1.5pp |
| Operating Margin | 20.6% | 26.7% | 28.5% | +1.8pp |
| Operating Income | $6.95B | $10.4B | $12.5B | +20% |
| Net Income | $5.4B | $8.7B | $10.3B | +18% |
| EPS (diluted) | $12.03 | $19.83 | $23.40 | +18% |
Q1 2026 Highlights (most recent reported)
| Metric | Q1 2026 | YoY |
|---|---|---|
| Revenue | $11.5B | +13% |
| Operating Income | $3.5B | +35% |
| Operating Margin | 30.3% | +500bps |
| EPS | ~$6.80 | beat $6.45 est |
| FCF | $2.7B |
Subscriber & Engagement (Q4 2024 final report)
| Metric | Value |
|---|---|
| Paid memberships | ~302M (+19M Q4 add — record) |
| Total reach (with extra members) | ~700M |
| Ad-tier % of new sign-ups | 60%+ in supported markets |
| Avg paid revenue per member (annual) | ~$140-150 |
Note: Netflix stopped reporting quarterly paid subscribers in 2025; biannual engagement reports instead
Cash Flow & Balance Sheet (FY2025)
| Metric | Value |
|---|---|
| Cash Flow from Operations | ~$13B |
| Content Cash Spend | ~$17.5B |
| Free Cash Flow | ~$8B |
| Cash & Equivalents | ~$10B |
| Total Debt | ~$15B |
| Net Debt / EBITDA | ~0.4x |
Key Ratios (approximate, May 2026)
- P/E (forward): ~34x | EV/Sales: ~10x | FCF Yield: ~2%
- Operating margin trajectory: 20% (2023) → 30%+ (2026E)
- Content/revenue ratio: ~40% (declining as revenue scales faster than content)
Growth Profile
Netflix is in the post-password-sharing-crackdown, post-ad-tier-launch monetization phase. Revenue accelerated from +6% (2022) → +13% (2024-25). Operating margin expanded ~10 percentage points in 3 years driven by (1) password sharing monetization, (2) ad-tier scaling, (3) selective price increases, (4) content efficiency. FY26 guidance raised: revenue ~$48B and FCF ~$12.5B (vs. prior $11B). Live sports + WWE deal locks in incremental engagement and ad inventory.
Forward Estimates
- FY2026E Revenue: ~$48B (mgmt; +9-10%)
- FY2026E Operating Margin: 30%+ (mgmt target)
- FY2026E EPS: ~$26 (consensus, +11%)
- FY2026E FCF: $12.5B (mgmt; raised from $11B)
- FY2027E EPS: ~$30
- Ad revenue 2026 target: ~$3B (doubling from $1.5B in 2025)
- Long-term operating margin target: 35%+
Capital Return
- $25B share repurchase authorization (2026)
- No dividend (focus on buybacks + content investment)
- Buybacks: ~$6-8B annual pace
- Net debt is moderate (~$5B net) — fortress balance sheet
Deeper Financial Analysis
The fundamental tier adds 9 additional research dimensions for $NFLX.
Revenue Breakdown
Segment revenue, geographic mix, product-line contribution margins, and cohort dynamics.
Financial Trends
Quarter-over-quarter momentum, leading indicators, and inflection point analysis.
Balance Sheet
Debt structure, liquidity runway, dilution risk, and working capital dynamics.
Capital Allocation
Buyback cadence, M&A appetite, dividend policy, and reinvestment priorities.
Returns on Capital (ROIC)
Multi-year ROIC vs. WACC, marginal returns on reinvestment, sales-to-invested-capital efficiency, and moat spread.
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