NETFLIX INC - Quarter Report: 2025 June (Form 10-Q)

Purchases of investments() () Proceeds from maturities and sales of investments Other investing activities() () Net cash provided by (used in) investing activities () ()Cash flows from financing activities:Repayments of debt() ()()Proceeds from issuance of common stock Repurchases of common stock()()()()Taxes paid related to net share settlement of equity awards()()()()Other financing activities () ()Net cash used in financing activities()()()()Effect of exchange rate changes on cash, cash equivalents and restricted cash () ()Net increase (decrease) in cash, cash equivalents and restricted cash () ()Cash, cash equivalents and restricted cash at beginning of period Cash, cash equivalents and restricted cash at end of period $ $ $ $

See accompanying notes to the consolidated financial statements.

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NETFLIX, INC.

Consolidated Balance Sheets

(in thousands, except share and par value data)


	As of
	June 30, 2025	December 31, 2024
	(unaudited)
Assets
Current assets:
Cash and cash equivalents	$	$
Short-term investments
Other current assets
Total current assets
Content assets, net
Property and equipment, net
Other non-current assets
Total assets	$	$
Liabilities and Stockholders’ Equity
Current liabilities:
Current content liabilities	$	$
Accounts payable
Accrued expenses and other liabilities
Deferred revenue
Short-term debt
Total current liabilities
Non-current content liabilities
Long-term debt
Other non-current liabilities
Total liabilities
Commitments and contingencies (Note 8)
Stockholders’ equity:
Common stock, $ par value; shares authorized at June 30, 2025 and December 31, 2024; and issued and outstanding at June 30, 2025 and December 31, 2024, respectively
Treasury stock at cost ( and shares at June 30, 2025 and December 31, 2024, respectively)	()	()
Accumulated other comprehensive income (loss)	()
Retained earnings
Total stockholders’ equity
Total liabilities and stockholders’ equity	$	$

See accompanying notes to the consolidated financial statements.

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NETFLIX, INC.

Consolidated Statements of Stockholders’ Equity

(unaudited)

(in thousands)

Three Months Ended

Six Months Ended

June 30,
2025

June 30,
2024

June 30,
2025

June 30,
2024

Total stockholders' equity, beginning balances

Common stock and additional paid-in capital:

Beginning balances

Issuance of common stock

Stock-based compensation expense

Ending balances

Treasury stock:

Beginning balances

()

Repurchases of common stock to be held as treasury stock

()

Ending balances

()

Accumulated other comprehensive income (loss):

Beginning balances

()

Other comprehensive income (loss)

()

Ending balances

()

Retained earnings:

Beginning balances

Net income

Ending balances

Total stockholders' equity, ending balances

See accompanying notes to the consolidated financial statements.

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NETFLIX, INC.

Notes to Consolidated Financial Statements

(unaudited)

The interim financial information is unaudited, but reflects all normal recurring adjustments that are, in the opinion of management, necessary to fairly present the information set forth herein. The interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements and related notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024. Interim results are not necessarily indicative of the results for a full year.

There have been no material changes in the Company’s significant accounting policies as compared to the significant accounting policies described in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024.

) million and $ million for the three and six months ended June 30, 2025, respectively, and $ million and $ million for the three and six months ended June 30, 2024, respectively. See Note 7 Derivative Financial Instruments and Hedging Activities for further information.

Three Months Ended

Six Months Ended

June 30,
2025

June 30,
2024

June 30,
2025

June 30,
2024

(in thousands)

United States and Canada (UCAN)

Europe, Middle East, and Africa (EMEA)

Latin America (LATAM)

Asia-Pacific (APAC)

Total Revenues

Deferred revenue consists of membership fees billed that have not been recognized, as well as gift cards and other prepaid memberships that have not been fully redeemed. As of June 30, 2025, total deferred revenue was $ million, the vast majority of which was related to membership fees billed that are expected to be recognized as revenue within the next month. The remaining deferred revenue balance, which is related to gift cards and other prepaid memberships, will be recognized as revenue over the period of service after redemption, which is expected to occur over the next 12 months. Deferred revenue increased $ million from $ million as of December 31, 2024 to $

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$ $ $

Shares used in computation:

Weighted-average shares of common stock outstanding Basic earnings per share$ $ $ $ Diluted earnings per share:

Net income

$ $ $ $

Shares used in computation:

Weighted-average shares of common stock outstanding Effect of dilutive stock-based awards Weighted-average number of shares Diluted earnings per share$ $ $ $

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$ $ $ $ $ $ $ Level 1 securities:Money market funds Level 2 securities:

Time Deposits(1)

$ $ $ $ $ $ $ $

As of December 31, 2024

Amortized Cost

Gross Unrealized Gains

Gross Unrealized Losses

Estimated Fair Value

Cash and Cash Equivalents

Short-term Investments

Other Current Assets

Non-current Assets

(in thousands)

Cash

Level 1 securities:

Money market funds

Level 2 securities:

Time Deposits(1)

Government securities

(1) The majority of the Company's time deposits are international deposits, which mature within one year.

Other current assets and non-current assets primarily consist of restricted cash for deposits related to self-insurance. The fair value of available-for-sale securities, cash equivalents and short-term investments included in the Level 2 category is based on observable inputs, such as quoted prices for similar assets at the measurement date; quoted prices in markets that are not active; or other inputs that are observable, either directly or indirectly.

See Note 6 Debt and Note 7 Derivative Financial Instruments and Hedging Activities to the consolidated financial statements for further information regarding the fair value of the Company’s senior notes and derivative financial instruments.

Produced content, net

Released, less amortization

In production

In development and pre-production

Content assets, net

$ $ $ $ $ Produced content Total$ $ $ $

Property and Equipment, Net

Buildings and improvements

years

Leasehold improvements

Over life of lease

Furniture and fixtures

years

Information technology

- years

Corporate aircraft

- years

Machinery and equipment

- years

Capital work-in-progress

Property and equipment, gross

Less: Accumulated depreciation

()()

Property and equipment, net

$ $

$ $ $ Right-of-use assets obtained in exchange for new operating lease obligations


	As of
	June 30, 2025	December 31, 2024
	(in thousands)
Operating lease right-of-use assets, net	$	$

Current operating lease liabilities
Non-current operating lease liabilities
Total operating lease liabilities	$	$

Other Current Assets

Prepaid expenses

Other

Total other current assets

$ $

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million, net of $ million of issuance costs and discounts, with varying maturities (the "Notes"). As of December 31, 2024, the Company had aggregate outstanding notes of $ million, net of $ million of issuance costs and discounts. Each of the Notes are senior unsecured obligations of the Company. Interest is payable semi-annually at fixed rates.

A portion of the outstanding Notes is denominated in foreign currency (comprised of € million as of June 30, 2025 and € million as of December 31, 2024, respectively) and is remeasured into U.S. dollars at each balance sheet date (with remeasurement loss, net of hedging impacts, totaling $ million and $ million, respectively, for the three and six months ended June 30, 2025). See Note 7 Derivative Financial Instruments and Hedging Activities to the consolidated financial statements for further information regarding the Company’s derivative and non-derivative financial instruments.

% Senior Notes$ $ February 2015February 2025$ $

% Senior Notes(1)

April 2020June 2025

% Senior Notes

April 2020June 2025

% Senior Notes

October 2016November 2026

% Senior Notes(1)

May 2017May 2027

% Senior Notes

October 2017April 2028

% Senior Notes

April 2018November 2028

% Senior Notes(1)

October 2018May 2029

% Senior Notes

October 2018May 2029

% Senior Notes(1)

April 2019November 2029

% Senior Notes

April 2019November 2029

% Senior Notes(1)

October 2019June 2030

% Senior Notes

October 2019June 2030

% Senior Notes

August 2024August 2034

% Senior Notes

August 2024August 2054 $ $ $ $

(1) The following Senior Notes have a principal amount denominated in euros: % Senior Notes for € million, % Senior Notes for € million, % Senior Notes for € million, % Senior Notes for € million, and % Senior Notes for € million.

In the six months ended June 30, 2025, the Company repaid upon maturity the $ million aggregate principal amount of its % Senior Notes, the € million aggregate principal amount of its % Senior Notes, and the $ million aggregate principal amount of its % Senior Notes.

Each of the Notes are repayable in whole or in part upon the occurrence of a change of control, at the option of the holders, at a purchase price in cash equal to % of the principal plus accrued interest. The Company may redeem the Notes prior to maturity in whole or in part at an amount equal to the principal amount thereof plus accrued and unpaid interest and an applicable premium. The Notes include, among other terms and conditions, limitations on the Company's ability to create, incur or allow certain liens, and consolidate or merge with, or convey, transfer or lease all or substantially all of the Company's and its subsidiaries assets, to another person. Certain of the Notes additionally limit the ability to enter into sale and lease-back transactions and create, assume, incur or guarantee additional indebtedness of certain of the Company's subsidiaries. As of June 30, 2025 and December 31, 2024, the Company was in compliance with all related covenants.

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, $ billion unsecured revolving credit facility that matures on April 12, 2029 (the “Revolving Credit Agreement”), to replace its previous $ billion unsecured revolving credit facility. As of June 30, 2025, amounts have been borrowed under the Revolving Credit Agreement.

The borrowings under the Revolving Credit Agreement bear interest, at the Company’s option, of either (i) a floating rate per annum equal to a base rate (the “Alternate Base Rate”) plus an applicable margin or (ii) a per annum rate equal to an adjusted term SOFR rate (the “Adjusted Term SOFR Rate”) plus an applicable margin. The applicable margin for Alternate Base Rate loans will range from % to %, and the applicable margin for Adjusted Term SOFR Rate loans will range from % to %, each based on the Company’s credit ratings.

The Revolving Credit Agreement contains customary affirmative covenants and negative covenants (and customary baskets and exceptions with respect thereto) for a credit facility of this size and type and requires the Company to maintain a minimum ratio of consolidated EBITDA to consolidated interest expense of to 1.0 as of the last day of each fiscal quarter. As of June 30, 2025 and December 31, 2024, the Company was in compliance with all related covenants and ratios.

Commercial Paper Program

In May 2025, the Company established a $ billion commercial paper program (the “Commercial Paper Program”) under which it may issue short-term unsecured commercial paper notes. Net proceeds from this program may be used for general corporate purposes. There were no borrowings outstanding under the Commercial Paper Program as of June 30, 2025.

Fair value hedges

Derivatives not designated as hedging instruments:

Foreign exchange contracts

Total

$ $

As of June 30, 2025 and December 31, 2024, approximately $ billion and $ billion, respectively, of the Company’s euro–denominated Senior Notes were designated as hedges of the foreign exchange risk of the Company’s net investment in certain foreign subsidiaries.

As of June 30, 2025 and December 31, 2024, the carrying amount of the Company's euro-denominated Senior Notes (included in "Long-term debt" on the Company's Consolidated Balance Sheets), which were designated as the hedged items in fair value hedges, was approximately $ billion and $ billion, respectively.

Note 6 Debt for further information on the Company’s debt obligations.

Fair Value of Derivative Contracts

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$ $ $ Derivatives not designated as hedging instruments:Foreign exchange contracts Total$ $ $ $

As of December 31, 2024

Derivative Assets

Derivative Liabilities

Other current assets

Other non-current assets

Accrued expenses and other liabilities

Other non-current liabilities

(in thousands)

Derivatives designated as hedging instruments:

Foreign exchange contracts

Derivatives not designated as hedging instruments:

Foreign exchange contracts

Total

The Company classifies derivative instruments in the Level 2 category within the fair value hierarchy. These instruments are valued using industry standard valuation models that use observable inputs such as interest rate yield curves, and forward and spot prices for currencies.

As of June 30, 2025, the pre-tax net accumulated loss on our foreign currency cash flow hedges included in accumulated other comprehensive income (“AOCI”) on the Consolidated Balance Sheets expected to be recognized in earnings within the next 12 months is $ million.

Master Netting Agreements

In order to mitigate counterparty credit risk, the Company enters into master netting agreements with its counterparties for its foreign currency exchange contracts which permit the parties to settle amounts on a net basis under certain conditions. The Company has elected to present its derivative assets and liabilities on a gross basis on its Consolidated Balance Sheets.

The Company also enters into collateral security arrangements with its counterparties that require the parties to post cash collateral when certain contractual thresholds are met. Cash collateral received is presented in “Accrued expenses and other liabilities” representing the Company’s obligation to return counterparty cash collateral. Cash collateral posted is presented in “Other current assets,” representing the Company’s right to reclaim the cash collateral. The Company does not offset the fair value of its derivative instruments against the fair value of cash collateral posted or received.

$ $ $()$ $ Derivative liabilities ()()

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$ $ $()$()$ Derivative liabilities ()

(in thousands)(in thousands)

10.

$ $ $ Effective tax rate % % % %

The effective tax rates for the three and six months ended June 30, 2025 differed from the Federal statutory rate primarily due to the foreign-derived intangible income deduction and excess tax benefits on stock-based compensation.

11.

operating segment. The Company's chief operating decision maker ("CODM") is its co-chief executive officers, who review financial information presented on a consolidated basis. The CODM uses consolidated operating margin and net income to assess financial performance and allocate resources. These financial metrics are used by the CODM to make key operating decisions, such as the determination of the rate at which the Company seeks to grow global operating margin and the allocation of budget between cost of revenues, sales and marketing, technology and development, and general and administrative expenses.

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$ $ $ Less:Content amortization Other cost of revenues Sales and marketing Technology and development General and administrative Operating income Operating margin % % % %Other income (expense)Interest expense()()()()

Interest and other income (expense)(1)

Income before income taxes Provision for income taxes()()()()Net income$ $ $ $

(1) Includes interest income of $ million and $ million, respectively, for the three and six months ended June 30, 2025, and $ million and $ million, respectively, for the three and six months ended June 30, 2024.

See the consolidated financial statements for other financial information regarding the Company’s operating segment.

Total U.S. revenues were $ billion and $ billion, respectively, for the three and six months ended June 30, 2025, and $ billion and $ billion, respectively, for the three and six months ended June 30, 2024. See Note 2 Revenue Recognition for additional information about revenues by region.

$ International

12.

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;

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seasonality; stock price volatility; impact of foreign exchange rate fluctuations, including on net income, 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; reporting of membership-related data; 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 live experiences; impact of work stoppages; content amortization; resolution of tax examinations; tax expense; unrecognized tax benefits; deferred tax assets; the impact of the OBBBA; 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, 2024 filed with the Securities and Exchange Commission (“SEC”) on January 27, 2025, 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 and games 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.

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Results of Operations

The following represents our consolidated performance highlights(1):


	Three Months Ended						Change
	June 30, 2025			June 30, 2024			Q2'25 vs. Q2'24
	(in thousands, except percentages)
Financial Results:
Revenues	$	11,079,166		$	9,559,310		$	1,519,856		16	%
Constant currency change in revenues(2)										17	%

Operating income	$	3,774,694		$	2,602,837		$	1,171,857		45	%
Operating margin	34.1		%	27.2		%	6.9		%

Net income	$	3,125,413		$	2,147,306		$	978,107		46	%

(1) We have discontinued the quarterly reporting of membership numbers, focusing instead on revenue and operating margin as the primary financial metrics that we believe best represent our business performance. Effective with the Quarterly Report on Form 10-Q for the quarter ended March 31, 2025, we discontinued reporting streaming membership metrics, including paid net membership additions (losses), paid memberships at end of period, average paying memberships and average monthly revenue per paying membership.

(2) 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, 2025 increased by approximately seven percentage points as compared to the prior comparative period. The increase in operating margin was primarily driven by revenue growth outpacing the growth in cost of revenues, as well as by a slower rate of growth in sales and marketing and general and administrative expenses relative to revenue growth.

Net income for the three months ended June 30, 2025 increased $978 million as compared to the prior comparative period, primarily due to a $1,172 million increase in operating income, driven by a $1,520 million increase in revenues and partially offset by a $151 million increase in cost of revenues primarily due to the increase in content amortization. The impact of higher operating income was partially offset by a $57 million decrease in foreign exchange gains and losses and a $140 million increase in the provision for income taxes.

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, 2025, pricing on our plans ranged from the U.S. dollar equivalent of $1 to $34 per month, and pricing on our extra member sub accounts ranged from the U.S. dollar equivalent of $2 to $9 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, live 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, 2025 and June 30, 2024.

Three months ended June 30, 2025 as compared to the three months ended June 30, 2024


	Three Months Ended				Change
	June 30, 2025		June 30, 2024		Q2'25 vs. Q2'24
	(in thousands, except percentages)
Revenues	$	11,079,166	$	9,559,310	$	1,519,856	16	%

Six months ended June 30, 2025 as compared to the six months ended June 30, 2024


	Six Months Ended				Change
	June 30, 2025		June 30, 2024		YTD'25 vs. YTD'24
	(in thousands, except percentages)
Revenues	$	21,621,967	$	18,929,750	$	2,692,217	14	%

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Revenues for the three and six months ended June 30, 2025 increased 16% and 14% as compared to the three and six months ended June 30, 2024, respectively, primarily due to the growth in memberships, higher pricing, and increased advertising revenue, partially offset by unfavorable changes in foreign exchange rates, net of hedging.

The following tables summarize revenue by region for the three and six months ended June 30, 2025 and 2024. Total revenues are inclusive of hedging gains (losses) of $(37) million and $127 million for the three and six months ended June 30, 2025, respectively, and $33 million and $22 million for the three and six months ended June 30, 2024, respectively. See Note 7 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, 2025 as compared to the three months ended June 30, 2024


	Three Months Ended				Change
	June 30, 2025		June 30, 2024		Q2'25 vs. Q2'24
	(in thousands, except percentages)
United States and Canada (UCAN)	$	4,929,003	$	4,295,560	$	633,443	15	%
Europe, Middle East, and Africa (EMEA)	3,538,175		3,007,772		530,403		18	%
Latin America (LATAM)	1,306,735		1,204,145		102,590		9	%
Asia-Pacific (APAC)	1,305,253		1,051,833		253,420		24	%
Total Revenues	$	11,079,166	$	9,559,310	$	1,519,856	16	%

Six months ended June 30, 2025 as compared to the six months ended June 30, 2024


	Six Months Ended				Change
	June 30, 2025		June 30, 2024		YTD'25 vs. YTD'24
	(in thousands, except percentages)
United States and Canada (UCAN)	$	9,546,101	$	8,519,875	$	1,026,226	12	%
Europe, Middle East, and Africa (EMEA)	6,942,851		5,965,965		976,886		16	%
Latin America (LATAM)	2,568,669		2,369,153		199,516		8	%
Asia-Pacific (APAC)	2,564,346		2,074,757		489,589		24	%
Total Revenues	$	21,621,967	$	18,929,750	$	2,692,217	14	%

Total

$42,243,305 $12,077,915 $30,165,390

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(1)As of June 30, 2025, content obligations were comprised of $4.1 billion included in “Current content liabilities” and $1.6 billion of “Non-current content liabilities” on the Consolidated Balance Sheets and $15.3 billion of obligations that are not reflected on the Consolidated Balance Sheets as they did not then meet the criteria for recognition.

The material cash requirements above do not include any estimated obligation for the unknown future titles, payment for which could range from less than one year to more than five years. However, these unknown obligations are expected to be significant and we believe could include approximately $1 billion to $4 billion over the next three years, with the payments for the vast majority of such amounts expected to occur after the next twelve months. The foregoing range is based on considerable management judgments and the actual amounts may differ. Once we know the title that we will receive and the license fees, we include the amount in the contractual obligations table above.

(2)Debt obligations include our Notes consisting of principal and interest payments. See Note 6 Debt to the consolidated financial statements for further details.

(3)Operating lease obligations are comprised of operating lease liabilities included in "Accrued expenses and other liabilities" and "Other non-current liabilities" on the Consolidated Balance Sheets, inclusive of imputed interest. Operating lease obligations also include additional obligations that are not reflected on the Consolidated Balance Sheets as they did not meet the criteria for recognition. See Note 5 Balance Sheet Components in the accompanying notes to our consolidated financial statements for further details regarding leases.

In addition to the material cash requirements summarized in the table above, we may be required to pay deposits of approximately $800 million related to certain indirect taxes in the next twelve months, which are in excess of our typical annual obligations. During the three months ended June 30, 2025, we also paid tax deposits of approximately $200 million related to certain direct taxes that exceeded our regularly recurring obligations.

Cash Flows

The following tables summarize our cash flows:

Three months ended June 30, 2025 as compared to the three months ended June 30, 2024


	Three Months Ended				Change
	June 30, 2025		June 30, 2024		Q2'25 vs. Q2'24
	(in thousands, except percentages)
Net cash provided by operating activities	$	2,423,258	$	1,290,847	$	1,132,411	88	%
Net cash provided by (used in) investing activities	768,684		(78,287)		846,971		1,082	%
Net cash used in financing activities	(2,502,868)		(1,489,381)		1,013,487		68	%

Net cash provided by operating activities for the three months ended June 30, 2025 increased $1,132 million as compared to the corresponding period in 2024, primarily driven by a $978 million or 46% increase in net income, a $366 million decrease in payments for content assets, and a $226 million increase in adjustments for non-cash expenses, partially offset by $438 million in unfavorable changes in working capital.

Net cash provided by (used in) investing activities for the three months ended June 30, 2025 increased $847 million as compared to the corresponding period in 2024, primarily due to net cash inflows of $961 million from maturities, sales and purchases of investments in the three months ended June 30, 2025 as compared to no cash flows related to investments in the corresponding period in 2024, partially offset by a $78 million increase in purchases of property and equipment.

Net cash used in financing activities for the three months ended June 30, 2025 increased $1,013 million as compared to the corresponding period in 2024, primarily driven by $1,033 million in repayments of debt in the three months ended June 30, 2025 as compared to no repayments of debt in the corresponding period in 2024.

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Six months ended June 30, 2025 as compared to the six months ended June 30, 2024


	Six Months Ended				Change
	June 30, 2025		June 30, 2024		YTD'25 vs. YTD'24
	(in thousands, except percentages)
Net cash provided by operating activities	$	5,212,457	$	3,503,369	$	1,709,088	49	%
Net cash provided by (used in) investing activities	1,254,346		(154,001)		1,408,347		915	%
Net cash used in financing activities	(6,531,184)		(3,622,325)		2,908,859		80	%

Net cash provided by operating activities for the six months ended June 30, 2025 increased $1,709 million as compared to the corresponding period in 2024, primarily driven by a $1,536 million or 34% increase in net income, a $323 million decrease in payments for content assets, and a $487 million increase in adjustments for non-cash expenses, partially offset by $637 million in unfavorable changes in working capital.

Net cash provided by (used in) investing activities for the six months ended June 30, 2025 increased $1,408 million as compared to the corresponding period in 2024, primarily due to net cash inflows of $1,575 million from maturities, sales and purchases of investments in the six months ended June 30, 2025 as compared to no cash flows related to investments in the corresponding period in 2024, partially offset by a $130 million increase in purchases of property and equipment.

Net cash used in financing activities for the six months ended June 30, 2025 increased $2,909 million as compared to the corresponding period in 2024, primarily driven by a $1,591 million increase in repurchases of common stock, coupled with a $1,433 million increase in repayments of debt due to repayments of approximately $1,833 million in the six months ended June 30, 2025 as compared to debt repayments of approximately $400 million in the six months ended June 30, 2024. The increase in cash outflows related to stock repurchases and debt repayments was partially offset by a $133 million increase in proceeds from the issuance of common stock.

Indemnification

The information set forth under Note 8 Commitments and Contingencies to the consolidated financial statements under the caption “Indemnification” is incorporated herein by reference.

Critical Accounting Estimates

The preparation of financial statements and related disclosures in conformity with U.S. generally accepted accounting principles and the Company’s discussion and analysis of its financial condition and operating results require the Company’s management to make judgments, assumptions and estimates that affect the amounts reported. Note 1, “Basis of Presentation and Summary of Significant Accounting Policies” of the Notes to consolidated Financial Statements in Part I, Item 1 of this Form 10-Q and in the Notes to Consolidated Financial Statements in Part II, Item 8 of our Annual Report on Form 10-K for the year ended December 31, 2024, describe the significant accounting policies and methods used in the preparation of the Company’s consolidated financial statements. There have been no material changes to the Company’s critical accounting estimates included in our Annual Report on Form 10-K for the year ended December 31, 2024.

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Item 3.Quantitative and Qualitative Disclosures About Market Risk

We are exposed to market risks related to interest rate changes, which affect the market values of our investments and debt, as well as foreign currency fluctuations.

Interest Rate Risk

At June 30, 2025, our cash equivalents were generally invested in money market funds and time deposits. Interest paid on such funds fluctuates with the prevailing interest rate.

As of June 30, 2025, we had $14.5 billion of debt, consisting of fixed rate unsecured debt in twelve tranches due between 2026 and 2054. Refer to Note 6 Debt to the consolidated financial statements for details about all issuances. The fair value of our debt will fluctuate with movements of interest rates, increasing in periods of declining rates of interest and declining in periods of increasing rates of interest. The fair value of our debt will also fluctuate based on changes in foreign currency rates, as discussed below.

Foreign Currency Risk

We operate our business globally and transact in multiple currencies. Currencies denominated in other than the U.S. dollar accounted for 55% of revenue and 29% of operating expenses for the six months ended June 30, 2025. We therefore have foreign currency risk related to these currencies, which are primarily the euro, the British pound, the Brazilian real, the Mexican peso, and the Canadian dollar.

Accordingly, volatility in exchange rates and, in particular, a weakening of foreign currencies relative to the U.S. dollar may negatively affect our revenue and operating income as expressed in U.S. dollars. Our revenues, on a constant currency basis, would have been approximately $379 million higher for the six months ended June 30, 2025 than our reported revenues of $21,622 million. See Part I, Item 2, "Management’s Discussion and Analysis of Financial Condition and Results of Operations" for further information regarding our non-GAAP financial measure of constant currency.

We enter into foreign exchange forward contracts to mitigate fluctuations in forecasted U.S. dollar-equivalent revenues from changes in foreign currency exchange rates. These contracts may reduce, but do not entirely eliminate, the effect of foreign currency exchange fluctuations, and we may choose not to hedge certain exposures. We designate these contracts as cash flow hedges of forecasted foreign currency revenue and initially record the gains or losses on these derivative instruments as a component of accumulated other comprehensive income (“AOCI”) and reclassify the amounts into “Revenues” on the Consolidated Statements of Operations in the same period the forecasted transaction affects earnings. If the U.S. dollar weakened by 10% as of June 30, 2025 and December 31, 2024, the amount recorded in AOCI related to our foreign exchange contracts, before taxes, would have been approximately $2,224 million and $1,850 million lower, respectively. This adverse change in AOCI would be expected to offset a corresponding favorable foreign currency change in the underlying forecasted revenues when recognized in earnings.

We enter into foreign exchange forward contracts to mitigate fluctuations in forecasted and firmly committed U.S. dollar-equivalent transactions related to the licensing and production of content assets from changes in foreign currency exchange rates. These contracts may reduce, but do not entirely eliminate, the effect of foreign currency exchange fluctuations, and we may choose not to hedge certain exposures. We designate these contracts as cash flow hedges and initially record the gains or losses on these derivative instruments as a component of AOCI and reclassify the amounts into “Cost of Revenues” to offset the hedged exposures as they affect earnings, which occurs as the underlying hedged content assets are amortized. If the U.S. dollar strengthened by 10% as of June 30, 2025 and December 31, 2024, the amount recorded in AOCI related to our foreign exchange contracts, before taxes, would have been approximately $195 million and $187 million lower, respectively. This adverse change in AOCI would be expected to offset a corresponding favorable foreign currency change in the underlying exposures when recognized in earnings.

We use non-derivative instruments to mitigate foreign exchange risk related to our net investments in certain foreign subsidiaries. These non-derivative instruments may reduce, but do not entirely eliminate, the effect of foreign currency exchange fluctuations, and we may choose not to hedge certain exposures. We designate a portion of our foreign currency-denominated Senior Notes in euros as net investment hedges and the gains or losses on these non-derivative instruments are reported as a component of AOCI and remain in AOCI until the hedged net investment is sold or liquidated, at which point the amounts recognized in AOCI are reclassified into earnings.

We have also experienced and will continue to experience fluctuations in our net income as a result of gains (losses) on the settlement and the remeasurement of monetary assets and liabilities denominated in currencies that are not the functional currency. We enter into foreign exchange forward contracts to mitigate the foreign exchange risk on intercompany transactions and monetary assets and liabilities that are not denominated in the functional currencies of the Company and its subsidiaries. These contracts may reduce, but do not entirely eliminate, the effect of foreign currency exchange fluctuations, and we may choose not to hedge certain exposures. Certain contracts are not designated as hedging instruments and the gains or losses on these derivative instruments are recorded in “Interest and other income (expense)” in the Consolidated Statements of Operations. We also designate certain contracts as fair value hedges to mitigate the foreign exchange risk on the remeasurement of our foreign-currency denominated debt. The gains or losses on these derivative instruments included in the assessment of hedge effectiveness are recorded in “Interest and other income (expense),” net with the offsetting foreign currency remeasurement gains and losses on the hedged items. If an adverse change in exchange rates of 10% was applied to our monetary assets and liabilities denominated in currencies other than the functional currencies as of June 30, 2025 and December 31, 2024, income before income taxes would have been

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approximately $10 million and $38 million lower, respectively, after considering the offsetting impact of the foreign currency exchange contracts and our net investment hedges.

Item 4.Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our co-Chief Executive Officers and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the period covered by this Quarterly Report on Form 10-Q. Based on that evaluation, our co-Chief Executive Officers and Chief Financial Officer concluded that our disclosure controls and procedures as of the end of the period covered by this Quarterly Report on Form 10-Q were effective in providing reasonable assurance that information required to be disclosed by us in reports that we file or submit under the Exchange Act, is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, and that such information is accumulated and communicated to our management, including our co-Chief Executive Officers and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosures.

Our management, including our co-Chief Executive Officers and Chief Financial Officer, does not expect that our disclosure controls and procedures or our internal controls will prevent all error and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected.

Changes in Internal Control Over Financial Reporting

There were no changes in our internal control over financial reporting that occurred during the quarter ended June 30, 2025, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II. OTHER INFORMATION

Item 1.Legal Proceedings

The information set forth under Note 8 Commitments and Contingencies in the notes to the consolidated financial statements under the caption “Legal Proceedings” is incorporated herein by reference.

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Item 1A.Risk Factors

There have been no material changes from the risk factors previously disclosed under the heading “Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024.

Item 2.Unregistered Sales of Equity Securities and Use of Proceeds

Company Purchases of Equity Securities

Stock repurchases during the three months ended June 30, 2025 were as follows:


Period	Total Number of Shares Purchased (1)	Average Price Paid per Share (2)		Total Number of Shares Purchased as Part of Publicly Announced Programs (1)	Approximate Dollar Value of Shares that May Yet Be Purchased Under the Program (1)
					(in thousands)
April 1 - 30, 2025	784,964	$	939.88	784,964	$	12,869,605
May 1 - 31, 2025	390,471	$	1,162.69	390,471	$	12,415,607
June 1 - 30, 2025	349,473	$	1,237.23	349,473	$	11,983,227
Total	1,524,908			1,524,908


(1) In September 2023, the Company’s Board of Directors authorized the repurchase of up to $10 billion of its common stock, with no expiration date, and in December 2024, the Board of Directors increased the share repurchase authorization by an additional $15 billion, also with no expiration date. For further information regarding stock repurchase activity, see Note 9 Stockholders’ Equity to the consolidated financial statements in this Quarterly Report.
(2) Average price paid per share includes costs associated with the repurchases but excludes the 1% excise tax on stock repurchases imposed by the Inflation Reduction Act of 2022.

Item 5.Other Information

Rule 10b5-1 Trading Plans

(1)


(1) Mathias Döpfner, a member of the Board of Directors, entered into a pre-arranged stock trading plan pursuant to Rule 10b5-1 on January 29, 2025. The plan provides for the potential sale of up to shares of Netflix common stock. The plan expires on January 30, 2026, or upon the earlier completion of all authorized transactions under the plan.

Other than those disclosed above, none of our directors or officers or a "non-Rule 10b5-1 trading arrangement" as defined in Item 408 of Regulation S-K.

Item 6.Exhibits

(a) Exhibits:

See Exhibit Index immediately following the signature page of this Quarterly Report on Form 10-Q.

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EXHIBIT INDEX

Exhibit Number

Exhibit Description

Incorporated by Reference

Filed
Herewith

Form

File No.

Exhibit

Filing Date

3.1

Restated Certificate of Incorporation

8-K

001-35727

3.1

June 8, 2022

3.2

Amended and Restated Bylaws

8-K

001-35727

3.2

February 24, 2023

31.1

Certification of Co-Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.2

Certification of Co-Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.3

Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32.1*

Certifications of Co-Chief Executive Officers and Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

101

The following financial statements from the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 2025, formatted in Inline XBRL: (i) Consolidated Statements of Operations, (ii) Consolidated Statements of Comprehensive Income, (iii) Consolidated Statements of Cash Flows, (iv) Consolidated Balance Sheets, (v) Consolidated Statements of Stockholders' Equity and (vi) Notes to Consolidated Financial Statements, tagged as blocks of text and including detailed tags

104

The cover page from the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 2025, formatted in Inline XBRL

* These certifications are not deemed filed by the SEC and are not to be incorporated by reference in any filing we make under the Securities Act of 1933 or the Securities Exchange Act of 1934, irrespective of any general incorporation language in any filings.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


		NETFLIX, INC.
Dated:	July 18, 2025	By:	/s/ Ted Sarandos
			Ted Sarandos Co-Chief Executive Officer (Principal executive officer)

Dated:	July 18, 2025	By:	/s/ Greg Peters
			Greg Peters Co-Chief Executive Officer (Principal executive officer)

Dated:	July 18, 2025	By:	/s/ Jeffrey Karbowski
			Jeffrey Karbowski Chief Accounting Officer (Principal accounting officer)

NETFLIX INC - Quarter Report: 2025 June (Form 10-Q)

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