Netflix (NFLX) 10-K risk factor changes: FY2024 vs FY2023

Competitors include other entertainment video providers, such as linear television, and streaming entertainment providers (including those that provide pirated content), video gaming providers, as well as user-generated content, [added: some of which are by professional content creators,] and more broadly other sources of [removed: entertainment] [added: entertainment, such as social media,] that our members could choose in their moments of free time.

If consumers do not perceive our service offering to be of value, including if we introduce new or adjust existing features, adjust pricing or service offerings, or change the mix of content in a manner that is not favorably received by them, we may not be able to attract and retain members, and accordingly, our [removed: revenue, including] revenue [removed: per paying membership,] and results of operations may be adversely affected.

We [removed: have recently] expanded our entertainment video offering to include [removed: games.][added: games and, more recently, live programming.]

If our efforts to [added: sustain and improve our existing TV and film offering, as well as] develop and [removed: offer games] [added: expand our video entertainment options,] are not [added: done in a manner] valued by our current and future members, our ability to attract and retain members may be negatively impacted.

For example, we [removed: are expanding] [added: continue to expand] our offering of consumer products and live experiences.

To the extent we cannot successfully find and develop new [removed: products] [added: products, experiences] and services to help drive growth, [added: or we do not realize the expected benefits or generate additional revenue from such new products, experiences, and services,] our future results of operations and growth may be adversely impacted.

We have and may, from time to time, adjust our membership pricing, our membership plans, or our pricing model [removed: itself.][added: itself, including for example, the lower-priced ad-supported subscription plan.]

These and other adjustments we make may not be well-received by consumers, and could negatively impact our ability to attract and retain members, [removed: revenues per paying membership,] revenue and our results of operations.

All of these have the potential to capture [added: meaningful segments of the entertainment video market.]

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[removed: Traditional] [added: We face competition from traditional] providers of entertainment video, including broadcasters and cable network operators, as well as internet based e-commerce or entertainment video providers [removed: are increasing their streaming video offerings.][added: and platforms.]

Several of these competitors have long operating histories, large customer bases, strong brand recognition, exclusive rights to certain content, large content libraries, and significant [removed: financial, marketing and other resources.]

If our competitors gain an advantage by using such [removed: technologies,] [added: technologies more effectively to satisfy consumer demand,] our ability to compete [removed: effectively] [added: successfully] and our results of operations could be adversely impacted.

If we are unable to successfully or profitably compete with current and new [removed: competitors,] [added: competitors and win moments of truth,] our business will be adversely affected, and we may not be able to increase or maintain market share, revenues or profitability.

We devote significant resources toward the development, production, marketing and distribution of original [removed: programming, including TV series, documentaries, feature films and games.][added: programming.]

We are expanding our [removed: operations internationally,] [added: operations,] scaling our streaming service to effectively and reliably handle anticipated growth in both members and features related to our services, such as introducing games and advertising on our service, as well as offering live programming and expanding our consumer products and experiences.

We are also scaling our own studio operations to produce original [removed: content, including through acquisitions such as Scanline and Animal Logic.][added: content.]

As we scale our streaming service and introduce new features such as our [removed: new] ad-supported subscription [removed: plan,] [added: plan and live programming,] we are developing technology and utilizing third-party “cloud” computing, technology and other services.

As we scale our content production, including games, and introduce new [removed: features, such as live programming] [added: features] and expand our consumer products and experience offerings, we are building out expertise in a number of disciplines, including creative, marketing, legal, finance, licensing, merchandising and other resources, which requires significant resources and management attention.

[added: If we are not able to] manage the growing complexity of our business, including improving, refining or [removed: revising] [added: evolving] our corporate culture, as well as our systems and operational practices related to our streaming operations and original content, our business may be adversely affected.

To the extent our [removed: content, in particular, our original programming,] [added: content] is perceived as low quality, offensive or otherwise not compelling to consumers, our ability to establish and maintain a positive reputation may be adversely impacted.

[removed: To the extent our content is deemed controversial or offensive by government regulators, we may face direct or indirect] retaliatory action or behavior, including being required to remove such content from our service, our entire service could be banned and/or become subject to heightened regulatory scrutiny across our business and operations.

To the extent [added: we are unable to meet regulatory or industry standards or investor expectations on ESG issues or] the content we distribute and the manner in which we produce content creates ESG related concerns, our reputation may be harmed.

We intend to continue to broaden our relationships with existing partners and to increase our capability to stream [removed: TV series and films] [added: content] and offer games to other platforms and partners over time.

In addition, technology changes to our streaming functionality may require that partners update their devices, [removed: or may] [added: and from time to time,] lead to us to stop supporting the delivery of our service on certain legacy devices.

In certain instances, we leverage third parties such as our cable and other partners to bill [removed: subscribers] [added: members] on our behalf.

If these third parties become unwilling or unable to continue processing payments on our behalf, we would have to transition [removed: subscribers] [added: members] or otherwise find alternative methods of collecting payments, which could adversely impact member acquisition and retention.

If we are unable to maintain our fraud and chargeback rate at acceptable levels, card networks may [removed: impose fines, our card approval rate may be impacted and we may be subject to additional card authentication requirements.]

For example, European law enables individual member states to impose levies and other financial obligations on media operators [removed: located outside] [added: that provide services in] their jurisdiction.

Several [removed: jurisdictions] [added: European Union (EU) Member States] have and others may, over time, impose financial and regulatory obligations on us.

Changes in laws or regulations that adversely affect the growth, popularity or use of the internet, including laws impacting net [removed: neutrality or] [added: neutrality,] requiring payment of network access [removed: fees,] [added: fees or payment of network support taxes,] could decrease the demand for our service and increase our cost of doing business.

Certain laws intended to prevent network operators from discriminating against the legal traffic that traverse their networks have been implemented in many countries, including across the [removed: European Union.][added: EU and several U.S. states.]

In others, the laws may be [removed: nascent] [added: nascent, evolving] or non-existent.

These matters have included copyright and other claims related to our content, [added: products,] patent infringement claims, tax litigation, employment related litigation, as well as consumer and securities class actions, each of which are typically expensive to defend.

- our ability to develop and expand an advertising sales [added: and advertising technology] organization team;

- our ability to develop the technology and related infrastructure to support [removed: advertising;][added: advertising and drive value to advertisers;]

Intellectual property claims against us could be costly and result in the loss of significant rights related to, among other things, our [removed: website, streaming] technology, [removed: our recommendation and merchandising technology, title selection] [added: business] processes, [removed: our content,] and [removed: marketing activities.][added: content.]

Our intellectual property rights extend to our technology, business processes, the content we produce and distribute through our service, and consumer products, [removed: experiences, and marketing assets based thereon.]

We use the intellectual property of third parties in creating some of our content, merchandising our products and [added: experiences, and] marketing our service.

We have not searched [added: for] patents relative to our technology.

financial, marketing and other resources.

To the extent our content is deemed controversial or offensive by government regulators, we may face direct or indirect

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impose fines, our card approval rate may be impacted and we may be subject to additional card authentication requirements.

Rules governing new technological developments, including generative artificial intelligence, are nascent and rapidly evolving such that the impact on areas related to our business remains uncertain.

For example, in Europe, the Digital Markets Act remains subject to non-compliance investigations, the result of which could change how we interact with digital gatekeepers like Apple and Google.

For example, a U.S. federal appeals court recently overturned the Federal Communications Commission's net neutrality rules.

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experiences, and marketing assets based thereon.

The addition of new features or upgrades also increases our exposure to vulnerabilities, and generative artificial intelligence could intensify these cybersecurity risks.

We also utilize our own and third-party

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may result in significant damages for contract breach, and other significant costs, penalties, and other liabilities, as well as harm to our reputation and market position.

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our existing indebtedness.

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If actual viewing patterns differ from these estimates, the

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For example, we introduced a new, lower-priced ad-supported subscription plan.

meaningful segments of the entertainment video market.

If we are not able to

Furthermore, favorable laws may change, including for example, in the United States where net neutrality regulations were repealed.

If our technology or that of third-parties we utilize in our operations fails or otherwise operates improperly,

breach.

For several years prior to 2020, our cash flows from operations were negative and to the extent that it becomes negative in the future we may need to seek additional capital.

As of December 31, 2023, we

Our substantial indebtedness and other obligations, including streaming content obligations, may:

- make it difficult for us to satisfy our financial obligations, including making scheduled principal and interest payments on our Notes and our other obligations;

- limit our ability to borrow additional funds, if needed, for working capital, capital expenditures, acquisitions or other general business purposes;

- increase our cost of borrowing;

- limit our ability to use our cash flow or obtain additional financing for future working capital, capital expenditures, acquisitions or other general business purposes;

- limit our flexibility to plan for, or react to, changes in our business and industry;

- place us at a competitive disadvantage compared to our less leveraged competitors; and

- increase our vulnerability to the impact of adverse economic and industry conditions, including changes in interest rates and foreign exchange rates.

For example, the Writers Guild (“WGA”) and Screen Actors Guild (“SAG-AFTRA”) collective bargaining

agreements expired in 2023, and WGA members and the SAG-AFTRA members went on strike in May 2023 and July 2023, respectively.

Collective bargaining agreements with the I.A.T.S.E. representing technicians and “behind the camera” crews as well as contracts with Teamster unions expire in mid-2024.

The WGA and SAG-AFTRA strikes as well as the recent resurgence of organized labor in the United States may lead those workers to strike.

This section of this Form 10-K generally discusses [removed: 2023] [added: 2024] and [removed: 2022] [added: 2023] items and year-to-year comparisons between [removed: 2023] [added: 2024] and [removed: 2022.][added: 2023.]

Discussions of [removed: 2021] [added: 2022] items and year-to-year comparisons between [removed: 2022] [added: 2023] and [removed: 2021] [added: 2022] that are not included in this Form 10-K can be found in "Management's Discussion and Analysis of Financial Condition and Results of Operations" in Part II, Item 7 of the Company's Annual Report on Form 10-K for the fiscal year ended December 31, [removed: 2022.][added: 2023.]

| | | | | | | [removed: 2023] [added: 2024] | | | | | | [removed: 2022] [added: 2023] | | | | | | [removed: 2021] [added: 2022] | | | | | | [removed: 2023] [added: 2024] vs. [removed: 2022] [added: 2023] | | |

| Streaming revenues | | | | | | $ | [removed: 33,640,458] [added: 39,000,966] | | | | | $ | [removed: 31,469,852] [added: 33,640,458] | | | | | $ | [removed: 29,515,496] [added: 31,469,852] | | | | | [removed: 7] [added: 16] | | % |

| DVD revenues (1) | | | | | | [removed: 82,839] [added: —] | | | | | | [removed: 145,698] [added: 82,839] | | | | | | [removed: 182,348] [added: 145,698] | | | | | | [removed: (43)] [added: (100)] | | % |

| Total revenues | | | | | | $ | [removed: 33,723,297] [added: 39,000,966] | | | | | $ | [removed: 31,615,550] [added: 33,723,297] | | | | | $ | [removed: 29,697,844] [added: 31,615,550] | | | | | [removed: 7] [added: 16] | | % |

| Operating income | | | | | | $ | [removed: 6,954,003] [added: 10,417,614] | | | | | $ | [removed: 5,632,831] [added: 6,954,003] | | | | | $ | [removed: 6,194,509] [added: 5,632,831] | | | | | [removed: 23] [added: 50] | | % |

| Operating margin | | | | | | [removed: 21] [added: 27] | | % | | | | [removed: 18] [added: 21] | | % | | | | [removed: 21] [added: 18] | | % | | | | | | |

| Paid net membership additions | | | | | | [removed: 29,529] [added: 41,350] | | | | | | [removed: 8,903] [added: 29,529] | | | | | | [removed: 18,181] [added: 8,903] | | | | | | [removed: 232] [added: 40] | | % |

| Paid memberships at end of period [added: (2)] | | | | | | [removed: 260,276] [added: 301,626] | | | | | | [removed: 230,747] [added: 260,276] | | | | | | [removed: 221,844] [added: 230,747] | | | | | | [removed: 13] [added: 16] | | % |

| Average paying memberships | | | | | | [removed: 240,889] [added: 277,730] | | | | | | [removed: 222,924] [added: 240,889] | | | | | | [removed: 210,784] [added: 222,924] | | | | | | [removed: 8] [added: 15] | | % |

| Average monthly revenue per paying membership | | | | | | $ | [removed: 11.64] [added: 11.70] | | | | | $ | [removed: 11.76] [added: 11.64] | | | | | $ | [removed: 11.67] [added: 11.76] | | | | | [removed: (1)] [added: 1] | | % |

Operating margin for the year ended December 31, [removed: 2023] [added: 2024] increased [removed: three] [added: six] percentage [removed: points,] [added: points as compared to the prior comparative period,] primarily due to revenues growing at a faster rate as compared to the growth in cost of [removed: revenues] [added: revenues, sales] and [removed: marketing] [added: marketing,] and [removed: decreased] technology and development expenses, [removed: partially offset by higher growth in] [added: coupled with lower] general and administrative [removed: expenses as compared to the growth in revenues.][added: expenses.]

As of December 31, [removed: 2023,] [added: 2024,] pricing on our paid plans ranged from the U.S. dollar equivalent of $1 to [removed: $28] [added: $32] per month, and pricing on our extra member sub accounts ranged from the U.S. dollar equivalent of $2 to $8 per month.

We also earn revenue from advertisements presented on our streaming service, consumer [removed: products] [added: products, live events] and various other sources.

Revenues earned from sources other than monthly membership fees were not [added: a] material [added: component of streaming revenues] for the years ended December 31, [added: 2024,] 2023, [removed: 2022,] and [removed: 2021.][added: 2022.]

| | | | | | | [removed: 2023] [added: 2024] | | | | | | [removed: 2022] [added: 2023] | | | | | | [removed: 2021] [added: 2022] | | | | | | [removed: 2023] [added: 2024] vs. [removed: 2022] [added: 2023] | | | | | | | | |

| Streaming revenues | | | | | | $ | [removed: 33,640,458] [added: 39,000,966] | | | | | $ | [removed: 31,469,852] [added: 33,640,458] | | | | | $ | [removed: 29,515,496] [added: 31,469,852] | | | | | $ | [removed: 2,170,606] [added: 5,360,508] | | | | | [removed: 7] [added: 16] | | % |

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Streaming revenues for the year ended December 31, [removed: 2023] [added: 2024] increased [removed: 7%] [added: 16%] as compared to the year ended December 31, [removed: 2022,] [added: 2023,] primarily due to the [removed: 8%] growth in average paying [removed: memberships,] [added: memberships and price increases,] partially offset by [removed: a 1% decrease] [added: unfavorable changes] in [removed: average monthly revenue per paying membership.][added: foreign exchange rates.]

The following tables summarize streaming [removed: revenue] [added: revenues] and other streaming membership information by region for the years ended December 31, [removed: 2023, 2022] [added: 2024, 2023] and [removed: 2021.][added: 2022.]

| Paid net membership additions (losses) | | | | | | [removed: 5,832] [added: 9,497] | | | | | | [removed: (919)] [added: 5,832] | | | | | | [removed: 1,279] [added: (919)] | | | | | | [removed: 6,751] [added: 3,665] | | | | | | [removed: 735] [added: 63] | | % |

| Paid memberships at end of period [removed: (1)] | | | | | | [removed: 80,128] [added: 89,625] | | | | | | [removed: 74,296] [added: 80,128] | | | | | | [removed: 75,215] [added: 74,296] | | | | | | [removed: 5,832] [added: 9,497] | | | | | | [removed: 8] [added: 12] | | % |

| Average paying memberships | | | | | | [removed: 76,126] [added: 84,112] | | | | | | [removed: 74,001] [added: 76,126] | | | | | | [removed: 74,234] [added: 74,001] | | | | | | [removed: 2,125] [added: 7,986] | | | | | | [removed: 3] [added: 10] | | % |

| Average monthly revenue per paying membership | | | | | | $ | [removed: 16.28] [added: 17.20] | | | | | $ | [removed: 15.86] [added: 16.28] | | | | | $ | [removed: 14.56] [added: 15.86] | | | | | $ | [removed: 0.42] [added: 0.92] | | | | | [removed: 3] [added: 6] | | % |

| Constant currency change [removed: (2) | | | | | |] [added: (3)] | | | | | | | | | | | | | | | | | | | | | | | | [removed: 3] [added: 4] | | % |

| Paid net membership additions | | | | | | [removed: 12,084] [added: 12,320] | | | | | | [removed: 2,693] [added: 12,084] | | | | | | [removed: 7,338] [added: 2,693] | | | | | | [removed: 9,391] [added: 236] | | | | | | [removed: 349] [added: 2] | | % |

| Paid memberships at end of period [removed: (1)] | | | | | | [removed: 88,813] [added: 101,133] | | | | | | [removed: 76,729] [added: 88,813] | | | | | | [removed: 74,036] [added: 76,729] | | | | | | [removed: 12,084] [added: 12,320] | | | | | | [removed: 16] [added: 14] | | % |

| Average paying memberships | | | | | | [removed: 80,928] [added: 94,200] | | | | | | [removed: 73,904] [added: 80,928] | | | | | | [removed: 69,518] [added: 73,904] | | | | | | [removed: 7,024] [added: 13,272] | | | | | | [removed: 10] [added: 16] | | % |

| Average monthly revenue per paying membership | | | | | | $ | [removed: 10.87] [added: 10.96] | | | | | $ | [removed: 10.99] [added: 10.87] | | | | | $ | [removed: 11.63] [added: 10.99] | | | | | $ | [removed: (0.12)] [added: 0.09] | | | | | [removed: (1)] [added: 1] | | % |

| Constant currency change [removed: (2)] | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | [removed: (1)] [added: 6] | | % |

| Paid net membership additions | | | | | | [removed: 4,298] [added: 7,330] | | | | | | [removed: 1,738] [added: 4,298] | | | | | | [removed: 2,424] [added: 1,738] | | | | | | [removed: 2,560] [added: 3,032] | | | | | | [removed: 147] [added: 71] | | % |

| Paid memberships at end of period [removed: (1)] | | | | | | [removed: 45,997] [added: 53,327] | | | | | | [removed: 41,699] [added: 45,997] | | | | | | [removed: 39,961] [added: 41,699] | | | | | | [removed: 4,298] [added: 7,330] | | | | | | [removed: 10] [added: 16] | | % |

| Average paying memberships | | | | | | [removed: 42,802] [added: 48,954] | | | | | | [removed: 40,000] [added: 42,802] | | | | | | [removed: 38,573] [added: 40,000] | | | | | | [removed: 2,802] [added: 6,152] | | | | | | [removed: 7] [added: 14] | | % |

| Average monthly revenue per paying membership | | | | | | $ | [removed: 8.66] [added: 8.24] | | | | | $ | [removed: 8.48] [added: 8.66] | | | | | $ | [removed: 7.73] [added: 8.48] | | | | | $ | [removed: 0.18] [added: (0.42)] | | | | | [removed: 2] [added: (5)] | | % |

| Constant currency change [removed: (2)] | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | [removed: 10] [added: 1] | | % |

| Paid net membership additions | | | | | | [removed: 7,315] [added: 12,203] | | | | | | [removed: 5,391] [added: 7,315] | | | | | | [removed: 7,140] [added: 5,391] | | | | | | [removed: 1,924] [added: 4,888] | | | | | | [removed: 36] [added: 67] | | % |

| Paid memberships at end of period [removed: (1)] | | | | | | [removed: 45,338] [added: 57,541] | | | | | | [removed: 38,023] [added: 45,338] | | | | | | [removed: 32,632] [added: 38,023] | | | | | | [removed: 7,315] [added: 12,203] | | | | | | [removed: 19] [added: 27] | | % |

| Average paying memberships | | | | | | [removed: 41,033] [added: 50,466] | | | | | | [removed: 35,019] [added: 41,033] | | | | | | [removed: 28,461] [added: 35,019] | | | | | | [removed: 6,014] [added: 9,433] | | | | | | [removed: 17] [added: 23] | | % |

| Average monthly revenue per paying membership | | | | | | $ | [removed: 7.64] [added: 7.29] | | | | | $ | [removed: 8.50] [added: 7.64] | | | | | $ | [removed: 9.56] [added: 8.50] | | | | | $ | [removed: (0.86)] [added: (0.35)] | | | | | [removed: (10)] [added: (5)] | | % |

(1) We discontinued our DVD-by-mail service in the year ended December 31, 2023.

Constant currency percentage change in ARM is calculated as the percentage change between current period constant currency ARM and the prior comparative period ARM.

The impact of hedging gains or losses is excluded from both the current and prior periods.

The unfavorable foreign exchange rate impacts in the year ended December 31, 2024 were primarily driven by the devaluation of the Argentine peso relative to the U.S. dollar coupled with significant price increases in the local currency in this jurisdiction.

Hedging gains of $124 million are included in “Streaming revenues” for the year ended December 31, 2024.

No hedging gains and losses were recognized as “Streaming revenues” in the comparative prior year periods.

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.

| Streaming revenues | | | | | | $ | 17,359,369 | | | | | $ | 14,873,783 | | | | | $ | 14,084,643 | | | | | $ | 2,485,586 | | | | | 17 | | % |

| Streaming revenues | | | | | | $ | 12,387,035 | | | | | $ | 10,556,487 | | | | | $ | 9,745,015 | | | | | $ | 1,830,548 | | | | | 17 | | % |

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| | | | | | | 2024 | | | | | | 2023 | | | | | | 2022 | | | | | | 2024 vs. 2023 | | | | | | | | |

| Streaming revenues | | | | | | $ | 4,839,816 | | | | | $ | 4,446,461 | | | | | $ | 4,069,973 | | | | | $ | 393,355 | | | | | 9 | | % |

| | | | | | | 2024 | | | | | | 2023 | | | | | | 2022 | | | | | | 2024 vs. 2023 | | | | | | | | |

| Streaming revenues | | | | | | $ | 4,414,746 | | | | | $ | 3,763,727 | | | | | $ | 3,570,221 | | | | | $ | 651,019 | | | | | 17 | | % |

| Constant currency change | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | (3) | | % |

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.

Streaming delivery costs are primarily related to our global content delivery network (“Open Connect”).

| | | | | | | 2024 | | | | | | 2023 | | | | | | 2022 | | | | | | 2024 vs. 2023 | | | | | | | | |

Sales and Marketing

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| | | | | | | 2024 | | | | | | 2023 | | | | | | 2022 | | | | | | 2024 vs. 2023 | | | | | | | | |

| Sales and marketing | | | | | | $ | 2,917,554 | | | | | $ | 2,657,883 | | | | | $ | 2,530,502 | | | | | $ | 259,671 | | | | | 10 | | % |

Other sales and marketing expenses increased $129 million primarily due to a $54 million increase in marketing expenses due to the timing of marketing spend on our content slate, coupled with an increase in expenses incurred in connection with our advertising offering, including increased payments to advertising sales partners and other advertising distribution expenses.

| | | | | | | 2024 | | | | | | 2023 | | | | | | 2022 | | | | | | 2024 vs. 2023 | | | | | | | | |

| | | | | | | 2024 | | | | | | 2023 | | | | | | 2022 | | | | | | 2024 vs. 2023 | | | | | | | | |

[Table of Contents](#i0a018301e03c425b8202d1e7832f451d_7)

| | | | | | | 2024 | | | | | | 2023 | | | | | | 2022 | | | | | | 2024 vs. 2023 | | | | | | | | |

| | | | | | | 2024 | | | | | | 2023 | | | | | | 2022 | | | | | | 2024 vs. 2023 | | | | | | | | |

| | | | | | | 2024 | | | | | | 2023 | | | | | | 2022 | | | | | | 2024 vs. 2023 | | | | | | | | |

[Table of Contents](#i0a018301e03c425b8202d1e7832f451d_7)

| | | | 2024 | | | | | | 2023 | | | | | | 2024 vs. 2023 | | | | | |

Debt, net of debt issuance costs and discounts, increased $1,040 million primarily due to the issuance of $1,800 million in additional Senior Notes, partially offset by the repayment upon maturity of the $400 million aggregate principal amount of our 5.750% Senior Notes and the remeasurement of our euro-denominated notes in the year ended December 31, 2024.

We anticipate that we may periodically raise additional debt capital.

| Content obligations (1) | | | | | | $ | 23,248,931 | | | | | $ | 11,424,696 | | | | | $ | 11,824,235 | |

| Debt (2) | | | | | | 19,841,462 | | | | | | 2,486,945 | | | | | | 17,354,517 | | |

| Operating lease obligations (3) | | | | | | 2,761,120 | | | | | | 514,625 | | | | | | 2,246,495 | | |

| Total | | | | | | $ | 45,851,513 | | | | | $ | 14,426,266 | | | | | $ | 31,425,247 | |

[Table of Contents](#i0a018301e03c425b8202d1e7832f451d_7)

commitments.

| | | | | | | | | | | | | | | | | | | | | | | | | | | |

(1) In April 2023, we announced our plans to discontinue our DVD-by-mail service, and we ceased providing our mailing services to customers on September 29, 2023.

Consolidated revenues for the year ended December 31, 2023 increased 7% as compared to the year ended December 31, 2022.

The decrease in average monthly revenue per paying membership was primarily due to changes in plan mix, higher membership growth in regions with lower average monthly revenue per paying membership, partially offset by limited price increases.

Additionally, streaming revenues for the year ended December 31, 2023 were further impacted by unfavorable fluctuations in foreign exchange rates.

| Revenues | | | | | | $ | 14,873,783 | | | | | $ | 14,084,643 | | | | | $ | 12,972,100 | | | | | $ | 789,140 | | | | | 6 | | % |

| Revenues | | | | | | $ | 10,556,487 | | | | | $ | 9,745,015 | | | | | $ | 9,699,819 | | | | | $ | 811,472 | | | | | 8 | | % |

| Revenues | | | | | | $ | 4,446,461 | | | | | $ | 4,069,973 | | | | | $ | 3,576,976 | | | | | $ | 376,488 | | | | | 9 | | % |

| Revenues | | | | | | $ | 3,763,727 | | | | | $ | 3,570,221 | | | | | $ | 3,266,601 | | | | | $ | 193,506 | | | | | 5 | | % |

Amortization of content assets makes up the majority of cost of revenues.

Marketing

| Marketing | | | | | | $ | 2,657,883 | | | | | $ | 2,530,502 | | | | | $ | 2,545,146 | | | | | $ | 127,381 | | | | | 5 | | % |

The change in foreign currency gains and losses was partially offset by a $221 million increase in interest income earned due to higher average interest rates and investment balances for the year ended December 31, 2023 as compared to the year ended December 31, 2022.

Debt, net of debt issuance costs, increased $190 million primarily due to the remeasurement of our euro-denominated notes.

The amount of principal and interest due beyond the next twelve months is $16,662 million.

We anticipate that our future capital needs from the debt market will be more limited compared to prior years.

| Content obligations (1) | | | | | | $ | 21,713,349 | | | | | $ | 10,328,923 | | | | | $ | 11,384,426 | |

| Debt (2) | | | | | | 17,739,159 | | | | | | 1,077,261 | | | | | | 16,661,898 | | |

| Operating lease obligations (3) | | | | | | 3,088,899 | | | | | | 513,506 | | | | | | 2,575,393 | | |

| Total | | | | | | $ | 42,541,407 | | | | | $ | 11,919,690 | | | | | $ | 30,621,717 | |

*Free Cash Flow*

We define free cash flow as cash provided by (used in) operating activities less purchases of property and equipment and change in other assets.

We believe free cash flow is an important liquidity metric because it measures, during a given period, the amount of cash generated that is available to repay debt obligations, make strategic acquisitions and investments and for certain other activities like stock repurchases.

Free cash flow is considered a non-GAAP financial measure and should not be considered in isolation of, or as a substitute for, net income, operating income, net cash provided by operating activities, or any other measure of financial performance or liquidity presented in accordance with GAAP.

In assessing liquidity in relation to our results of operations, we compare free cash flow to net income, noting that the major recurring differences are the timing impact between content payments and amortization, non-cash stock-based compensation expense, non-cash remeasurement gain/loss on our euro-denominated debt, excess property and equipment purchases over depreciation, and other working capital differences.

Working capital differences primarily include deferred revenue, taxes and semi-annual interest payments on our outstanding debt.

Our receivables from members generally settle quickly.

| Non-GAAP reconciliation of free cash flow: | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Net cash provided by operating activities | | | 7,274,301 | | | | | | 2,026,257 | | | | | | 392,610 | | | | | | 5,248,044 | | | 259 | | % |

| Purchases of property and equipment | | | (348,552) | | | | | | (407,729) | | | | | | (524,585) | | | | | | (59,177) | | | (15) | | % |

| Change in other assets | | | — | | | | | | — | | | | | | (26,919) | | | | | | — | | | — | | % |

| Free cash flow | | | $ | 6,925,749 | | | | | $ | 1,618,528 | | | | | $ | (158,894) | | | | | $ | 5,307,221 | | 328 | | % |

Net cash provided by operating activities increased $5,248 million from the year ended December 31, 2022 to $7,274 million for the year ended December 31, 2023.

Net cash provided by (used in) investing activities increased $2,618 million from the year ended December 31, 2022 to $542 million for the year ended December 31, 2023.

Net cash used in financing activities increased $5,287 million from the year ended December 31, 2022 to $5,951 million for the year ended December 31, 2023.

Free cash flow was $1,518 million higher than net income for the year ended December 31, 2023 primarily due to $1,057 million of amortization expense exceeding cash payments for content assets, $339 million of non-cash stock-based compensation expense, $176 million of non-cash remeasurement loss on our euro-denominated debt, and $47 million in other favorable working capital differences, partially offset by $101 million of property and equipment purchases exceeding depreciation expense.

Participations and residuals are expensed in line with the amortization of production costs.

after its month of first availability.

At December 31, [removed: 2023,] [added: 2024,] our cash equivalents [removed: and short-term investments] were generally invested in money market funds and time deposits.

As of December 31, [removed: 2023,] [added: 2024,] we had [removed: $14.6] [added: $15.7] billion of debt, consisting of fixed rate unsecured debt in [removed: fourteen] [added: fifteen] tranches due between [removed: 2024] [added: 2025] and [removed: 2030.][added: 2054.]

Refer to Note 6 [added: *Debt*] to the consolidated financial statements for details about all issuances.

[Table of [removed: Contents](#ia57ac7a672a84fb28fed7eac0f1af5b6_7)][added: Contents](#i0a018301e03c425b8202d1e7832f451d_7)]

[added: 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.

Currencies denominated in other than the U.S. dollar accounted for [removed: 57%] [added: 56%] of revenue and [removed: 28%] [added: 29%] of operating expenses for the year ended December 31, [removed: 2023.][added: 2024.]

We therefore have foreign currency risk related to these currencies, [removed: with our largest exposures being] [added: which are primarily] the euro, the British pound, the Brazilian real, [removed: the Canadian dollar,] [added: Argentine peso,] and the Mexican peso.

[removed: For] [added: Excluding] the [added: impact of hedging gains or losses realized as revenues, our revenues for the] year ended December 31, [removed: 2023, our revenues] [added: 2024] would have been approximately [removed: $597] [added: $1,424] million higher had foreign currency exchange rates remained constant with those in the same period of [removed: 2022.][added: 2023.]

[removed: In the year ended December 31, 2023, we entered] [added: We enter] into foreign exchange forward contracts to mitigate fluctuations in forecasted U.S. dollar-equivalent revenues [removed: occurring in January 2024 and beyond] from changes in foreign currency exchange rates.

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 [removed: accumulated other comprehensive income (“AOCI")] [added: 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 December 31, [added: 2024 and December 31,] 2023, the amount recorded in AOCI related to our foreign exchange contracts, before taxes, would have been approximately [added: $1.9 billion and] $958 million [removed: lower.][added: lower, respectively.]

[removed: In the year ended December 31, 2023, we also entered] [added: 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 [removed: occurring in January 2024 and beyond] from changes in foreign currency exchange rates.

If the U.S dollar strengthened by 10% as of December 31, [added: 2024 and December 31,] 2023, the amount recorded in AOCI related to our foreign exchange contracts, before taxes, would have been approximately [added: $187 million and] $71 million [removed: lower.][added: lower, respectively.]

Our short-term investments are primarily comprised of investments in government securities.

These securities are classified as available-for-sale and are recorded at fair value with unrealized gains and losses, net of tax, included in accumulated other comprehensive income (“AOCI”) within Stockholders' equity in the Consolidated Balance Sheets.

Changes in interest rates could adversely affect the market value of these securities.

The unfavorable foreign exchange rate impact in the year ended December 31, 2024 was primarily driven by the devaluation of the Argentine peso relative to the U.S. dollar coupled with significant price increases in the local currency in this jurisdiction.

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.

In the year ended December 31, 2024, we began entering 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 December 31, 2024 and December 31, 2023, income before income taxes would have been approximately $38 million and $516 million lower, respectively, after considering the offsetting impact of the foreign currency exchange contracts and our net investment hedges.

The decrease in the hypothetical adverse change in income before taxes from $516 million as of December 31, 2023 to $38 million as of December 31, 2024 is primarily driven by our use of non-derivative and derivative instruments to mitigate foreign exchange risk related to the remeasurement of foreign-currency denominated balances during the year ended December 31, 2024.

The fair value

In the year ended December 31, 2023, we recognized a $293 million foreign exchange loss primarily due to the non-cash remeasurement of our Senior Notes denominated in euros and the remeasurement of cash and content liabilities denominated in currencies other than the functional currencies.

In addition, the effect of exchange rate changes on cash, cash equivalents and restricted cash as disclosed on the Consolidated Statements of Cash Flows in the year ended December 31, 2023 was an increase of $83 million.

Netflix, Inc. (“Netflix”, “the Company”, “registrant”, “we”, or “us”) is one of the world’s leading entertainment services with [removed: over 260] [added: approximately 302] million paid memberships in over 190 countries enjoying TV series, films and games across a wide variety of genres and languages.

We compete with a broad set of activities for consumers’ leisure time, including other entertainment video providers, such as linear [removed: TV,] [added: television,] streaming entertainment providers (including those that provide pirated content), video gaming [removed: providers] [added: providers, as well as user-generated content, some of which are by professional content creators,] and more broadly against other sources of entertainment, [removed: like] [added: such as] social media, that our members could choose in their moments of free time.

[Table of [removed: Contents](#ia57ac7a672a84fb28fed7eac0f1af5b6_7)][added: Contents](#i0a018301e03c425b8202d1e7832f451d_7)]

Our intellectual property rights extend to our technology, business [removed: processes and] [added: processes,] the content we produce and distribute through our [removed: service.][added: service, and the consumer products and experiences based thereon.]

As of December 31, [removed: 2023,] [added: 2024,] we had approximately [removed: 13,000] [added: 14,000] full-time employees.

Of these, approximately [removed: 9,000] [added: 9,600] (69%) were located in the United States and Canada, [removed: 2,000 (15%)] [added: 2,200 (16%)] in Europe, Middle East, and Africa, [removed: 500] [added: 600] (4%) in Latin America and [removed: 1,500 (12%)] [added: 1,600 (11%)] in Asia-Pacific.

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 [removed: year.][added: year and may be covered by collective bargaining agreements.]

We believe [removed: a critical] [added: an important] component of our success is our company culture.

This culture, which is detailed in a "Culture Memo" located on our website, is often described as providing a unique environment for our [removed: associates] [added: employees] to perform the best work of their lives in pursuit of excellence.

We look to help increase representation by [removed: training] [added: educating] our [added: people leaders and] recruiters on how to hire more inclusively, and to help the company and senior leaders diversify their networks.

We [removed: offer programs, such as seminars and lectures, that are designed] [added: aim] to equip our [added: people] leaders (officers, VPs, [removed: people managers and director] [added: directors,] and [removed: senior] manager-level employees) to lead the business and our teams in alignment with our expectations and strategic [removed: goals.][added: objectives.]

We aim [removed: to] generally [added: to] pay our employees at [removed: the top of] their personal [added: top of] market, and they generally are able to choose the form of their compensation between cash and stock options.

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 [added: identity] (globally) and race [added: or ethnicity] (U.S.) relative to others doing the same or similar work under comparable circumstances.

We aim to offer a range of pricing plans, including our ad-supported subscription plan, to meet a variety of consumer needs.

As our business grows and changes, we seek to improve our culture to meet the new needs of our business.

We believe our dynamic culture helps us create a better experience for our members, employees, creators and partners.

We offer various experiences and training to inform our employees about our culture and other context that we believe is important for success at Netflix.

[Table of Contents](#i0a018301e03c425b8202d1e7832f451d_7)

[Table of Contents](#i0a018301e03c425b8202d1e7832f451d_7)

We empower all of our employees so that they can have significant impact and input into decision-making; each employee has a high degree of freedom and power to make the decisions and take actions in the best interest of the company in carrying out their role.

In return, our employees are responsible and accountable for those decisions and actions.

With this approach, we believe we are a more flexible, fun, stimulating, creative, collaborative and successful organization.

We have built a portfolio of programs under three foundational pillars - great company, great leaders, and great human beings - which we believe support our current and future success.

We also offer programs and workshops to provide skills and coaching to employees on a variety of topics, such as leading and inspiring

teams.

We believe this focus helps our employees grow as leaders and well-rounded individuals, and better positions Netflix to operate our global business of providing compelling content to entertain the world.

For the fiscal year ended December 31, [removed: 2023][added: 2024]

As of June 30, [removed: 2023] [added: 2024] the aggregate market value of voting stock held by non-affiliates of the registrant, based upon the closing sales price for the registrant’s common stock, as reported in the NASDAQ Global Select Market System, was [removed: $192,301,932,760.][added: $287,180,927,160.]

Shares of common stock beneficially owned by each executive officer and director of the registrant and by each person known by the registrant to beneficially own 10% or more of the outstanding common stock [added: have been excluded in that such persons may be deemed to be affiliates.]

As of December 31, [removed: 2023,] [added: 2024,] there were [removed: 432,759,584] [added: 427,757,100] shares of the registrant’s common stock, par value $0.001, outstanding.

Parts of the registrant’s Proxy Statement for the registrant’s [removed: 2024] [added: 2025] Annual Meeting of Stockholders are incorporated by reference into Part III of this Annual Report on Form 10-K.

[Table of [removed: Contents](#ia57ac7a672a84fb28fed7eac0f1af5b6_7)][added: Contents](#i0a018301e03c425b8202d1e7832f451d_7)]

| Item 1. | | | [removed: [Business](#ia57ac7a672a84fb28fed7eac0f1af5b6_13)] [added: [Business](#i0a018301e03c425b8202d1e7832f451d_13)] | | | [removed: [1](#ia57ac7a672a84fb28fed7eac0f1af5b6_13)] [added: [1](#i0a018301e03c425b8202d1e7832f451d_13)] | | |

| Item 1A. | | | [Risk [removed: Factors](#ia57ac7a672a84fb28fed7eac0f1af5b6_16)] [added: Factors](#i0a018301e03c425b8202d1e7832f451d_16)] | | | [removed: [4](#ia57ac7a672a84fb28fed7eac0f1af5b6_16)] [added: [4](#i0a018301e03c425b8202d1e7832f451d_16)] | | |

| Item 1B. | | | [Unresolved Staff [removed: Comments](#ia57ac7a672a84fb28fed7eac0f1af5b6_19)] [added: Comments](#i0a018301e03c425b8202d1e7832f451d_19)] | | | [removed: [16](#ia57ac7a672a84fb28fed7eac0f1af5b6_19)] [added: [15](#i0a018301e03c425b8202d1e7832f451d_19)] | | |

| Item 1C. | | | [removed: [Cybersecurity](#ia57ac7a672a84fb28fed7eac0f1af5b6_549755815344)] [added: [Cybersecurity](#i0a018301e03c425b8202d1e7832f451d_22)] | | | [removed: [16](#ia57ac7a672a84fb28fed7eac0f1af5b6_549755815344)] [added: [15](#i0a018301e03c425b8202d1e7832f451d_22)] | | |

| Item 2. | | | [removed: [Properties](#ia57ac7a672a84fb28fed7eac0f1af5b6_22)] [added: [Properties](#i0a018301e03c425b8202d1e7832f451d_25)] | | | [removed: [18](#ia57ac7a672a84fb28fed7eac0f1af5b6_22)] [added: [16](#i0a018301e03c425b8202d1e7832f451d_25)] | | |

| Item 3. | | | [Legal [removed: Proceedings](#ia57ac7a672a84fb28fed7eac0f1af5b6_25)] [added: Proceedings](#i0a018301e03c425b8202d1e7832f451d_28)] | | | [removed: [18](#ia57ac7a672a84fb28fed7eac0f1af5b6_25)] [added: [16](#i0a018301e03c425b8202d1e7832f451d_28)] | | |

| Item 4. | | | [Mine Safety [removed: Disclosures](#ia57ac7a672a84fb28fed7eac0f1af5b6_28)] [added: Disclosures](#i0a018301e03c425b8202d1e7832f451d_31)] | | | [removed: [18](#ia57ac7a672a84fb28fed7eac0f1af5b6_28)] [added: [16](#i0a018301e03c425b8202d1e7832f451d_31)] | | |

| Item 5. | | | [Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity [removed: Securities](#ia57ac7a672a84fb28fed7eac0f1af5b6_34)] [added: Securities](#i0a018301e03c425b8202d1e7832f451d_37)] | | | [removed: [19](#ia57ac7a672a84fb28fed7eac0f1af5b6_34)] [added: [17](#i0a018301e03c425b8202d1e7832f451d_37)] | | |

| Item 6. | | | [removed: [\[Reserved\]](#ia57ac7a672a84fb28fed7eac0f1af5b6_37)] [added: [\[Reserved\]](#i0a018301e03c425b8202d1e7832f451d_40)] | | | [removed: [20](#ia57ac7a672a84fb28fed7eac0f1af5b6_37)] [added: [18](#i0a018301e03c425b8202d1e7832f451d_40)] | | |

| Item 7. | | | [Management’s Discussion and Analysis of Financial Condition and Results of [removed: Operations](#ia57ac7a672a84fb28fed7eac0f1af5b6_43)] [added: Operations](#i0a018301e03c425b8202d1e7832f451d_46)] | | | [removed: [21](#ia57ac7a672a84fb28fed7eac0f1af5b6_43)] [added: [19](#i0a018301e03c425b8202d1e7832f451d_46)] | | |

| Item 7A. | | | [Quantitative and Qualitative Disclosures About Market [removed: Risk](#ia57ac7a672a84fb28fed7eac0f1af5b6_61)] [added: Risk](#i0a018301e03c425b8202d1e7832f451d_64)] | | | [removed: [29](#ia57ac7a672a84fb28fed7eac0f1af5b6_61)] [added: [27](#i0a018301e03c425b8202d1e7832f451d_64)] | | |

| Item 8. | | | [Financial Statements and Supplementary [removed: Data](#ia57ac7a672a84fb28fed7eac0f1af5b6_67)] [added: Data](#i0a018301e03c425b8202d1e7832f451d_70)] | | | [removed: [30](#ia57ac7a672a84fb28fed7eac0f1af5b6_67)] [added: [28](#i0a018301e03c425b8202d1e7832f451d_70)] | | |

| Item 9. | | | [Changes in and Disagreements with Accountants on Accounting and Financial [removed: Disclosure](#ia57ac7a672a84fb28fed7eac0f1af5b6_70)] [added: Disclosure](#i0a018301e03c425b8202d1e7832f451d_73)] | | | [removed: [30](#ia57ac7a672a84fb28fed7eac0f1af5b6_67)] [added: [28](#i0a018301e03c425b8202d1e7832f451d_70)] | | |

| Item 9A. | | | [Controls and [removed: Procedures](#ia57ac7a672a84fb28fed7eac0f1af5b6_73)] [added: Procedures](#i0a018301e03c425b8202d1e7832f451d_76)] | | | [removed: [31](#ia57ac7a672a84fb28fed7eac0f1af5b6_73)] [added: [29](#i0a018301e03c425b8202d1e7832f451d_76)] | | |

| Item 9B. | | | [Other [removed: Information](#ia57ac7a672a84fb28fed7eac0f1af5b6_76)] [added: Information](#i0a018301e03c425b8202d1e7832f451d_79)] | | | [removed: [33](#ia57ac7a672a84fb28fed7eac0f1af5b6_76)] [added: [31](#i0a018301e03c425b8202d1e7832f451d_79)] | | |

| Item 9C. | | | [Disclosure Regarding Foreign Jurisdictions that Prevent [removed: Inspections](#ia57ac7a672a84fb28fed7eac0f1af5b6_79)] [added: Inspections](#i0a018301e03c425b8202d1e7832f451d_85)] | | | [removed: [33](#ia57ac7a672a84fb28fed7eac0f1af5b6_79)] [added: [31](#i0a018301e03c425b8202d1e7832f451d_85)] | | |

| Item 10. | | | [Directors, Executive Officers and Corporate [removed: Governance](#ia57ac7a672a84fb28fed7eac0f1af5b6_85)] [added: Governance](#i0a018301e03c425b8202d1e7832f451d_91)] | | | [removed: [34](#ia57ac7a672a84fb28fed7eac0f1af5b6_85)] [added: [32](#i0a018301e03c425b8202d1e7832f451d_91)] | | |

| Item 11. | | | [Executive [removed: Compensation](#ia57ac7a672a84fb28fed7eac0f1af5b6_88)] [added: Compensation](#i0a018301e03c425b8202d1e7832f451d_94)] | | | [removed: [34](#ia57ac7a672a84fb28fed7eac0f1af5b6_88)] [added: [32](#i0a018301e03c425b8202d1e7832f451d_94)] | | |

| Item 12. | | | [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder [removed: Matters](#ia57ac7a672a84fb28fed7eac0f1af5b6_91)] [added: Matters](#i0a018301e03c425b8202d1e7832f451d_97)] | | | [removed: [34](#ia57ac7a672a84fb28fed7eac0f1af5b6_91)] [added: [32](#i0a018301e03c425b8202d1e7832f451d_97)] | | |

| Item 13. | | | [Certain Relationships and Related Transactions, and Director [removed: Independence](#ia57ac7a672a84fb28fed7eac0f1af5b6_94)] [added: Independence](#i0a018301e03c425b8202d1e7832f451d_100)] | | | [removed: [34](#ia57ac7a672a84fb28fed7eac0f1af5b6_94)] [added: [32](#i0a018301e03c425b8202d1e7832f451d_100)] | | |

| Item 14. | | | [Principal Accountant Fees and [removed: Services](#ia57ac7a672a84fb28fed7eac0f1af5b6_97)] [added: Services](#i0a018301e03c425b8202d1e7832f451d_103)] | | | [removed: [34](#ia57ac7a672a84fb28fed7eac0f1af5b6_97)] [added: [32](#i0a018301e03c425b8202d1e7832f451d_103)] | | |

| Item 15. | | | [Exhibits, Financial Statement [removed: Schedules](#ia57ac7a672a84fb28fed7eac0f1af5b6_103)] [added: Schedules](#i0a018301e03c425b8202d1e7832f451d_109)] | | | [removed: [35](#ia57ac7a672a84fb28fed7eac0f1af5b6_103)] [added: [33](#i0a018301e03c425b8202d1e7832f451d_109)] | | |

| Item 16. | | | [Form 10-K [removed: Summary](#ia57ac7a672a84fb28fed7eac0f1af5b6_106)] [added: Summary](#i0a018301e03c425b8202d1e7832f451d_112)] | | | [removed: [35](#ia57ac7a672a84fb28fed7eac0f1af5b6_106)] [added: [33](#i0a018301e03c425b8202d1e7832f451d_112)] | | |

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; seasonality; stock price volatility; impact of foreign exchange rate [removed: fluctuations, including on net income, revenues and average revenues per paying member;] [added: fluctuations; expectations regarding hedging activity;] impact of interest rate fluctuations; adequacy of existing facilities; future regulatory changes and their impact on our business; intellectual property; [added: cybersecurity;] price changes and testing; accounting treatment for changes related to content assets; acquisitions; actions by competitors; membership growth, including impact of content and pricing changes on membership growth; 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 [removed: programming;] [added: programming, consumer products and live experiences;] impact of work stoppages; content amortization; resolutions of tax examinations; tax expense; unrecognized tax benefits; deferred tax assets; [added: resolutions 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.

[Table of Contents](#i0a018301e03c425b8202d1e7832f451d_7)

have been excluded in that such persons may be deemed to be affiliates.

Our systems [removed: periodically] [added: and those of third parties with which we do business have experienced and may continue to] experience directed attacks intended to lead to interruptions and delays in our service and operations as well as loss, misuse or theft of personal information (of third parties, employees, and our members) and other data, confidential information or intellectual property, and we have experienced [removed: an] unauthorized [removed: release] [added: releases] of certain digital content [removed: assets.][added: assets and unintended disclosure of personal information due to incidents related to third parties.]

Team members who support our information security program have relevant educational and industry experience, [added: including holding similar positions at large technology companies.]

[Table of [removed: Contents](#ia57ac7a672a84fb28fed7eac0f1af5b6_7)][added: Contents](#i0a018301e03c425b8202d1e7832f451d_7)]

including holding similar positions at large technology companies.

In addition, we [added: own and] lease various office and production space throughout the world.

[Table of [removed: Contents](#ia57ac7a672a84fb28fed7eac0f1af5b6_7)][added: Contents](#i0a018301e03c425b8202d1e7832f451d_7)]

As of December 31, [removed: 2023,] [added: 2024,] there were approximately [removed: 2,728] [added: 2,752] stockholders of record of our common stock, although there is a significantly larger number of beneficial owners of our common stock.

Stock repurchases during the three months ended December 31, [removed: 2023] [added: 2024] were as follows:

| (1) In [removed: March 2021,] [added: September 2023,] the [removed: Company’s] Board of Directors authorized the repurchase of up to [removed: $5] [added: $10] billion of its common stock, with no expiration date, and in [removed: September 2023,] [added: December 2024,] the Board of Directors increased the share repurchase authorization by an additional [removed: $10] [added: $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 Annual Report. | | |

| (2) Average price paid per share includes costs associated with the [removed: repurchases.] [added: repurchases but excludes the 1% excise tax on stock repurchases imposed by the Inflation Reduction Act of 2022.] | | |

[Table of [removed: Contents](#ia57ac7a672a84fb28fed7eac0f1af5b6_7)][added: Contents](#i0a018301e03c425b8202d1e7832f451d_7)]

The following graph compares, for the five year period ended December 31, [removed: 2023,] [added: 2024,] the total cumulative stockholder return on the Company’s common stock with the total cumulative return of the NASDAQ Composite Index, the S&P 500 Index and the RDG Internet Composite Index.

Measurement points are the last trading day of each of the Company’s fiscal years ended December 31, [removed: 2018, December 31,] 2019, December 31, 2020, December 31, 2021, December 31, [removed: 2022] [added: 2022, December 31, 2023] and December 31, [removed: 2023.][added: 2024.]

[removed: ![FY23] [added: ![2024] Stock Performance [removed: Graph.jpg](https://www.sec.gov/Archives/edgar/data/1065280/000106528024000030/nflx-20231231_g1.jpg)][added: Graph.jpg](https://www.sec.gov/Archives/edgar/data/1065280/000106528025000044/nflx-20241231_g1.jpg)]

| October 1 - 31, 2024 | | | | | | 519,883 | | | | | | $ | 724.15 | | | | | 519,883 | | | | | | $ | 2,678,384 | |

| November 1 - 30, 2024 | | | | | | 457,732 | | | | | | $ | 792.49 | | | | | 457,732 | | | | | | $ | 2,315,637 | |

| December 1 - 31, 2024 | | | | | | 188,212 | | | | | | $ | 913.13 | | | | | 188,212 | | | | | | $ | 17,143,775 | |

| Total | | | | | | 1,165,827 | | | | | | | | | | | | 1,165,827 | | | | | | | | |

| October 1 - 31, 2023 | | | | | | 287,360 | | | | | | $ | 404.62 | | | | | 287,360 | | | | | | $ | 10,738,584 | |

| November 1 - 30, 2023 | | | | | | 2,708,477 | | | | | | $ | 447.03 | | | | | 2,708,477 | | | | | | $ | 9,527,821 | |

| December 1 - 31, 2023 | | | | | | 2,481,771 | | | | | | $ | 472.63 | | | | | 2,481,771 | | | | | | $ | 8,354,857 | |

| Total | | | | | | 5,477,608 | | | | | | | | | | | | 5,477,608 | | | | | | | | |

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Our management assessed the effectiveness of our internal control over financial reporting as of December 31, [removed: 2023.][added: 2024.]

Based on our assessment under the framework in *Internal Control—Integrated Framework* (2013 framework), our management concluded that our internal control over financial reporting was effective as of December 31, [removed: 2023.][added: 2024.]

The effectiveness of our internal control over financial reporting as of December 31, [removed: 2023] [added: 2024] has been audited by Ernst & Young LLP, an independent registered public accounting firm, as stated in their report that is included herein.

There was no change in our internal control over financial reporting that occurred during the quarter ended December 31, [removed: 2023] [added: 2024] that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

[Table of [removed: Contents](#ia57ac7a672a84fb28fed7eac0f1af5b6_7)][added: Contents](#i0a018301e03c425b8202d1e7832f451d_7)]

We have audited Netflix, Inc.’s internal control over financial reporting as of December 31, [removed: 2023,] [added: 2024,] based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria).

In our opinion, Netflix, Inc. (the Company) maintained, in all material respects, effective internal control over financial reporting as of December 31, [removed: 2023,] [added: 2024,] based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, [removed: 2023] [added: 2024] and [removed: 2022,] [added: 2023,] the related consolidated statements of operations, comprehensive income, stockholders’ equity and cash flows for each of the three years in the period ended December 31, [removed: 2023,] [added: 2024,] and the related notes and our report dated January [removed: 26, 2024] [added: 27, 2025] expressed an unqualified opinion thereon.

| January 27, 2025 | | | | | |

[Table of Contents](#i0a018301e03c425b8202d1e7832f451d_7)

| January 26, 2024 | | | | | |

The adoption or termination of contracts, instructions or written plans for the purchase or sale of our securities by our Section 16 officers and directors for the three months ended December 31, [removed: 2023,] [added: 2024,] each of which is intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) under the Exchange Act (“Rule 10b5-1 Plan”), were as follows:

| Ted Sarandos [removed: (1)] [added: (4)] | | | | | | Co-CEO and Director | | | | | | Adoption | | | | | | [removed: 11/10/2023] [added: 10/25/2024] | | | | | | [removed: 2/7/2025] [added: 2/27/2026] | | | | | | [removed: 68,957] [added: 199,063] | | |

| [removed: (1)] [added: (4)] Ted Sarandos, co-CEO and a member of the Board of Directors, entered into a pre-arranged stock trading plan pursuant to Rule 10b5-1 on [removed: November 10, 2023.] [added: October 25, 2024.] Mr. Sarandos' plan provides for the potential exercise of vested stock options and the associated sale of up to [removed: 68,957] [added: 199,063] shares of Netflix common stock. The plan expires on February [removed: 7, 2025,] [added: 27, 2026,] or upon the earlier completion of all authorized transactions under the plan. | | |

| Greg Peters (1) | | | | | | Co-CEO and Director | | | | | | Termination | | | | | | 10/30/2024 | | | | | | N/A | | | | | | 187,913 | | |

| Greg Peters (2) | | | | | | Co-CEO and Director | | | | | | Adoption | | | | | | 10/30/2024 | | | | | | 11/1/2027 | | | | | | 158,583 | | |

| David Hyman (3) | | | | | | Chief Legal Officer | | | | | | Adoption | | | | | | 10/29/2024 | | | | | | 1/30/2026 | | | | | | 104,154 | | |

| Spencer Neumann (5) | | | | | | Chief Financial Officer | | | | | | Adoption | | | | | | 10/29/2024 | | | | | | 12/31/2025 | | | | | | 33,406 | | |

| Ann Mather (6) | | | | | | Director | | | | | | Adoption | | | | | | 10/31/2024 | | | | | | 12/31/2025 | | | | | | 2,682 | | |

| Strive Masiyiwa (7) | | | | | | Director | | | | | | Adoption | | | | | | 11/7/2024 | | | | | | 12/31/2025 | | | | | | 2,813 | | |

| Jeffrey Karbowski (8) | | | | | | Chief Accounting Officer | | | | | | Adoption | | | | | | 10/29/2024 | | | | | | 1/31/2026 | | | | | | 3,820 | | |

| (1) On October 30, 2024, Greg Peters, Co-CEO and a member of the Board of Directors, terminated a pre-arranged stock trading plan pursuant to Rule 10b5-1, which was adopted on July 26, 2023 and provided for the potential exercise of vested stock options and the associated sale of up to 187,913 shares of Netflix common stock until November 1, 2027 or the earlier completion of all authorized transactions under the plan. | | |

| (2) Upon termination of Mr. Peters' prior plan (described in footnote 1), on October 30, 2024, Mr. Peters entered into a pre-arranged stock trading plan pursuant to Rule 10b5-1 that provides for the potential exercise of vested stock options and the associated sale of up to 158,583 shares of Netflix common stock. This figure includes a grant of 31,112 Performance Share Units (PSUs) that are expected to vest during the term of the 10b5-1 plan, which are assumed to vest at 100% of the target award amount. The actual number of PSUs that may vest can vary between 0% - 200% of the target award of PSUs, subject to the achievement of certain performance conditions as set forth in the PSU award agreement, less shares to be withheld for tax withholding obligations. The plan expires on November 1, 2027, or upon the earlier completion of all authorized transactions under the plan. | | |

| (3) David Hyman, Chief Legal Officer, entered into a pre-arranged stock trading plan pursuant to Rule 10b5-1 on October 29, 2024. Mr. Hyman's plan provides for the potential exercise of vested stock options and the associated sale of up to 104,154 shares of Netflix common stock. This figure includes 2,174 PSUs that are expected to vest during the term of the 10b5-1 plan, which are assumed to vest at 100% of the target award amount. The actual number of PSUs that may vest can vary between 0% - 200% of the target award of PSUs, subject to the achievement of certain performance conditions as set forth in the PSU award agreement, less shares to be withheld for tax withholding obligations. The plan expires on January 30, 2026, or upon the earlier completion of all authorized transactions under the plan. | | |

| (5) Spencer Neumann, Chief Financial Officer, entered into a pre-arranged stock trading plan pursuant to Rule 10b5-1 on October 29, 2024. Mr. Neumann's plan provides for the potential exercise of vested stock options and the associated sale of up to 33,406 shares of Netflix common stock. The plan expires on December 31, 2025, or upon the earlier completion of all authorized transactions under the plan. | | |

| (6) Ann Mather, a member of the Board of Directors, entered into a pre-arranged stock trading plan pursuant to Rule 10b5-1 on October 31, 2024. Ms. Mather's plan provides for the potential exercise of vested stock options and the associated sale of up to 2,682 shares of Netflix common stock. The plan expires on December 31, 2025, or upon the earlier completion of all authorized transactions under the plan. | | |

| (7) Strive Masiyiwa, a member of the Board of Directors, entered into a pre-arranged stock trading plan pursuant to Rule 10b5-1 on November 7, 2024. Mr. Masiyiwa's plan provides for the potential exercise of vested stock options and the associated sale of up to 2,813 shares of Netflix common stock. The plan expires on December 31, 2025, or upon the earlier completion of all authorized transactions under the plan. | | |

| (8) Jeffrey Karbowski, Chief Accounting Officer, entered into a pre-arranged stock trading plan pursuant to Rule 10b5-1 on October 29, 2024. Mr. Karbowski's plan provides for the potential exercise of vested stock options and the associated sale of up to 3,820 shares of Netflix common stock. The plan expires on January 31, 2026, or upon the earlier completion of all authorized transactions under the plan. | | |

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The Company has adopted an insider trading policy which governs transactions in our securities by the Company and its directors, officers, employees, consultants, and contractors and is designed to promote compliance with insider trading laws, rules and regulations applicable to the Company.

A copy of our insider trading policy is filed with this Annual Report on Form 10-K as Exhibit 19.1.

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| [Report of Independent Registered Public Accounting [removed: Firm](#ia57ac7a672a84fb28fed7eac0f1af5b6_112)] [added: Firm](#i0a018301e03c425b8202d1e7832f451d_118)] (PCAOB ID: 42) | | | [removed: [37](#ia57ac7a672a84fb28fed7eac0f1af5b6_112)] [added: [35](#i0a018301e03c425b8202d1e7832f451d_118)] | | |

| [Consolidated Statements of [removed: Operations](#ia57ac7a672a84fb28fed7eac0f1af5b6_118)] [added: Operations](#i0a018301e03c425b8202d1e7832f451d_124)] | | | [removed: [39](#ia57ac7a672a84fb28fed7eac0f1af5b6_118)] [added: [37](#i0a018301e03c425b8202d1e7832f451d_124)] | | |

| [Consolidated Statements of Comprehensive [removed: Income](#ia57ac7a672a84fb28fed7eac0f1af5b6_121)] [added: Income](#i0a018301e03c425b8202d1e7832f451d_127)] | | | [removed: [40](#ia57ac7a672a84fb28fed7eac0f1af5b6_121)] [added: [38](#i0a018301e03c425b8202d1e7832f451d_127)] | | |

| [Consolidated Statements of Cash [removed: Flows](#ia57ac7a672a84fb28fed7eac0f1af5b6_124)] [added: Flows](#i0a018301e03c425b8202d1e7832f451d_133)] | | | [removed: [41](#ia57ac7a672a84fb28fed7eac0f1af5b6_124)] [added: [39](#i0a018301e03c425b8202d1e7832f451d_133)] | | |

| [Consolidated Balance [removed: Sheets](#ia57ac7a672a84fb28fed7eac0f1af5b6_127)] [added: Sheets](#i0a018301e03c425b8202d1e7832f451d_136)] | | | [removed: [42](#ia57ac7a672a84fb28fed7eac0f1af5b6_127)] [added: [40](#i0a018301e03c425b8202d1e7832f451d_136)] | | |

| [Consolidated Statements of Stockholders’ [removed: Equity](#ia57ac7a672a84fb28fed7eac0f1af5b6_133)] [added: Equity](#i0a018301e03c425b8202d1e7832f451d_142)] | | | [removed: [43](#ia57ac7a672a84fb28fed7eac0f1af5b6_133)] [added: [41](#i0a018301e03c425b8202d1e7832f451d_142)] | | |

| [Notes to Consolidated Financial [removed: Statements](#ia57ac7a672a84fb28fed7eac0f1af5b6_136)] [added: Statements](#i0a018301e03c425b8202d1e7832f451d_145)] | | | [removed: [44](#ia57ac7a672a84fb28fed7eac0f1af5b6_136)] [added: [42](#i0a018301e03c425b8202d1e7832f451d_145)] | | |

We have audited the accompanying consolidated balance sheets of Netflix, Inc. (the Company) as of December 31, [removed: 2023] [added: 2024] and [removed: 2022,] [added: 2023,] the related consolidated statements of operations, comprehensive income, stockholders’ equity and cash flows for each of the three years in the period ended December 31, [removed: 2023,] [added: 2024,] and the related notes (collectively referred to as the “consolidated financial statements").

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, [removed: 2023] [added: 2024] and [removed: 2022,] [added: 2023,] and the results of its operations and its cash flows for each of the three years in the period ended December 31, [removed: 2023,] [added: 2024,] in conformity with U.S. generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, [removed: 2023,] [added: 2024,] based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework), and our report dated January [removed: 26, 2024] [added: 27, 2025] expressed an unqualified opinion thereon.

| | | | | | | [removed: 2023] [added: 2024] | | | | | | [removed: 2022] [added: 2023] | | | | | | [removed: 2021] [added: 2022] | | |

| Revenues | | | | | | $ | [removed: 33,723,297] [added: 39,000,966] | | | | | $ | [removed: 31,615,550] [added: 33,723,297] | | | | | $ | [removed: 29,697,844] [added: 31,615,550] | |

| Cost of revenues | | | | | | [removed: 19,715,368] [added: 21,038,464] | | | | | | [removed: 19,168,285] [added: 19,715,368] | | | | | | [removed: 17,332,683] [added: 19,168,285] | | |

| [removed: Marketing] [added: Sales and marketing] | | | | | | [removed: 2,657,883] [added: 2,917,554] | | | | | | [removed: 2,530,502] [added: 2,657,883] | | | | | | [removed: 2,545,146] [added: 2,530,502] | | |

| Technology and development | | | | | | [removed: 2,675,758] [added: 2,925,295] | | | | | | [removed: 2,711,041] [added: 2,675,758] | | | | | | [removed: 2,273,885] [added: 2,711,041] | | |

| General and administrative | | | | | | [removed: 1,720,285] [added: 1,702,039] | | | | | | [removed: 1,572,891] [added: 1,720,285] | | | | | | [removed: 1,351,621] [added: 1,572,891] | | |

| Operating income | | | | | | [removed: 6,954,003] [added: 10,417,614] | | | | | | [removed: 5,632,831] [added: 6,954,003] | | | | | | [removed: 6,194,509] [added: 5,632,831] | | |

| Interest expense | | | | | | [removed: (699,826)] [added: (718,733)] | | | | | | [removed: (706,212)] [added: (699,826)] | | | | | | [removed: (765,620)] [added: (706,212)] | | |

| Interest and other income (expense) | | | | | | [removed: (48,772)] [added: 266,776] | | | | | | [removed: 337,310] [added: (48,772)] | | | | | | [removed: 411,214] [added: 337,310] | | |

| Income before income taxes | | | | | | [removed: 6,205,405] [added: 9,965,657] | | | | | | [removed: 5,263,929] [added: 6,205,405] | | | | | | [removed: 5,840,103] [added: 5,263,929] | | |

| Provision for income taxes | | | | | | [removed: (797,415)] [added: (1,254,026)] | | | | | | [removed: (772,005)] [added: (797,415)] | | | | | | [removed: (723,875)] [added: (772,005)] | | |

| Net income | | | | | | $ | [removed: 5,407,990] [added: 8,711,631] | | | | | $ | [removed: 4,491,924] [added: 5,407,990] | | | | | $ | [removed: 5,116,228] [added: 4,491,924] | |

| Basic | | | | | | $ | [removed: 12.25] [added: 20.28] | | | | | $ | [removed: 10.10] [added: 12.25] | | | | | $ | [removed: 11.55] [added: 10.10] | |

| Diluted | | | | | | $ | [removed: 12.03] [added: 19.83] | | | | | $ | [removed: 9.95] [added: 12.03] | | | | | $ | [removed: 11.24] [added: 9.95] | |

| Basic | | | | | | [removed: 441,571] [added: 429,519] | | | | | | [removed: 444,698] [added: 441,571] | | | | | | [removed: 443,155] [added: 444,698] | | |

| Diluted | | | | | | [removed: 449,498] [added: 439,261] | | | | | | [removed: 451,290] [added: 449,498] | | | | | | [removed: 455,372] [added: 451,290] | | |

| | | | [removed: 2023] [added: 2024] | | | | | | [removed: 2022] [added: 2023] | | | | | | [removed: 2021] [added: 2022] | | |

| Net income | | | $ | [removed: 5,407,990] [added: 8,711,631] | | | | | $ | [removed: 4,491,924] [added: 5,407,990] | | | | | $ | [removed: 5,116,228] [added: 4,491,924] | |

| Foreign currency translation [removed: adjustments] [added: adjustments, net of income tax (expense) benefit of $(7) million, $0, and $0, respectively] | | | [removed: 113,384] [added: (247,949)] | | | | | | [removed: (176,811)] [added: 113,384] | | | | | | [removed: (84,893)] [added: (176,811)] | | |

| Net [removed: unrealized gains (losses),] [added: change,] net of [added: income] tax [removed: benefit] (expense) [added: benefit] of [added: $(246) million,] $36 million, [removed: $0,] and $0, respectively | | | [removed: (120,023)] [added: 824,432] | | | | | | [removed: —] [added: (120,023)] | | | | | | — | | |

| Total other comprehensive [removed: loss] [added: income (loss)] | | | [removed: (6,639)] [added: 586,107] | | | | | | [removed: (176,811)] [added: (6,639)] | | | | | | [removed: (84,893)] [added: (176,811)] | | |

| Comprehensive income | | | $ | [removed: 5,401,351] [added: 9,297,738] | | | | | $ | [removed: 4,315,113] [added: 5,401,351] | | | | | $ | [removed: 5,031,335] [added: 4,315,113] | |

| Additions to content assets | | | | | | [removed: (12,554,703)] [added: (16,223,617)] | | | | | | [removed: (16,839,038)] [added: (12,554,703)] | | | | | | [removed: (17,702,202)] [added: (16,839,038)] | | |

| Change in content liabilities | | | | | | [removed: (585,602)] [added: (779,135)] | | | | | | [removed: 179,310] [added: (585,602)] | | | | | | [removed: 232,898] [added: 179,310] | | |

| Amortization of content assets | | | | | | [removed: 14,197,437] [added: 15,301,517] | | | | | | [removed: 14,026,132] [added: 14,197,437] | | | | | | [removed: 12,230,367] [added: 14,026,132] | | |

| Depreciation and amortization of property, equipment and intangibles | | | | | | [removed: 356,947] [added: 328,914] | | | | | | [removed: 336,682] [added: 356,947] | | | | | | [removed: 208,412] [added: 336,682] | | |

| Stock-based compensation expense | | | | | | [removed: 339,368] [added: 272,588] | | | | | | [removed: 575,452] [added: 339,368] | | | | | | [removed: 403,220] [added: 575,452] | | |

| Foreign currency remeasurement loss (gain) on debt | | | | | | [removed: 176,296] [added: (121,539)] | | | | | | [removed: (353,111)] [added: 176,296] | | | | | | [removed: (430,661)] [added: (353,111)] | | |

| Other non-cash items | | | | | | [removed: 512,075] [added: 494,778] | | | | | | [removed: 533,543] [added: 512,075] | | | | | | [removed: 376,777] [added: 533,543] | | |

[Table of Contents](#i0a018301e03c425b8202d1e7832f451d_7)

[Table of Contents](#i0a018301e03c425b8202d1e7832f451d_7)

| January 27, 2025 | | | | | |

[Table of Contents](#i0a018301e03c425b8202d1e7832f451d_7)

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| Change in unrealized gains on available-for-sale securities, net of income tax (expense) benefit of $(1) million, $0, and $0, respectively | | | 2,511 | | | | | | — | | | | | | — | | |

| Net unrealized gains (losses) | | | 921,227 | | | | | | (120,023) | | | | | | — | | |

| Reclassification of net gains included in net income | | | (96,795) | | | | | | — | | | | | | — | | |

| Fair value hedges: | | | | | | | | | | | | | | | | | |

| Net unrealized gains excluded from the assessment of effectiveness, net of income tax (expense) benefit of $(2) million, $0, and $0, respectively | | | 7,113 | | | | | | — | | | | | | — | | |

[Table of Contents](#i0a018301e03c425b8202d1e7832f451d_7)

| Net income | | | | | | $ | 8,711,631 | | | | | $ | 5,407,990 | | | | | $ | 4,491,924 | |

| Proceeds from issuance of debt | | | | | | 1,794,460 | | | | | | — | | | | | | — | | |

[Table of Contents](#i0a018301e03c425b8202d1e7832f451d_7)

| | | | | | | 2024 | | | | | | 2023 | | |

[Table of Contents](#i0a018301e03c425b8202d1e7832f451d_7)

| Net income | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 8,711,631 | | | | | | 8,711,631 | | |

| Other comprehensive income | | | — | | | | | | — | | | | | | — | | | | | | 586,107 | | | | | | — | | | | | | 586,107 | | |

| Issuance of common stock | | | 4,872,708 | | | | | | 834,366 | | | | | | — | | | | | | — | | | | | | — | | | | | | 834,366 | | |

| Repurchases of common stock | | | (9,861,935) | | | | | | — | | | | | | (6,241,153) | | | | | | — | | | | | | — | | | | | | (6,241,153) | | |

| Balances as of December 31, 2024 | | | 427,757,100 | | | | | | $ | 6,252,126 | | | | | $ | (13,171,638) | | | | | $ | 362,162 | | | | | $ | 31,300,917 | | | | | $ | 24,743,567 | |

[Table of Contents](#i0a018301e03c425b8202d1e7832f451d_7)

In November 2024, the FASB issued ASU 2024-03, *Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses*, requiring public entities to disclose additional information about specific expense categories in the notes to the financial statements on an interim and annual basis.

Recently adopted accounting pronouncements

The Company adopted ASU 2023-07 during the year ended December 31, 2024.

See Note 12 *Segment and Geographic Information* in the accompanying notes to the consolidated financial statements for further detail.

[Table of Contents](#i0a018301e03c425b8202d1e7832f451d_7)

Revenues are presented net of the taxes that

[Table of Contents](#i0a018301e03c425b8202d1e7832f451d_7)

Sales and Marketing

Foreign exchange gains (losses) for the year ended December 31, 2024 were net of hedging impacts.

See Note 7 *Derivative Financial Instruments and Hedging Activities* for further information.

[Table of Contents](#i0a018301e03c425b8202d1e7832f451d_7)

Fair value hedges

The Company designates forward contracts as fair value hedges to manage the foreign exchange risk on its foreign-currency denominated debt.

These hedges may reduce, but do not entirely eliminate, the effect of foreign currency exchange movements, and the Company may choose not to hedge the full amount of its exposure.

The gain or loss on derivative instruments designated as fair value hedges included in the assessment of hedge effectiveness is recognized in “Interest and other income (expense),” net with the offsetting foreign currency remeasurement gains and losses on the hedged items.

The Company excludes forward points from the assessment of hedge effectiveness and recognizes the initial value of the excluded component over the life of the hedging instrument in “Interest and other income (expense)” on the Consolidated Statements of Operations.

The difference between changes in fair value of the excluded component and the amount recognized in earnings is recognized as a component in AOCI.

Cash flows from hedging activities are classified in the same category as the cash flows for the underlying item being hedged within "Net cash provided by (used in) financing activities" on the Consolidated Statements of Cash Flows.

| January 26, 2024 | | | | | |

| Change in other assets | | | | | | — | | | | | | — | | | | | | (26,919) | | |

| Balances as of December 31, 2020 | | | 442,895,261 | | | | | | $ | 3,447,698 | | | | | $ | — | | | | | $ | 44,398 | | | | | $ | 7,573,144 | | | | | $ | 11,065,240 | |

| Net income | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 5,116,228 | | | | | | 5,116,228 | | |

| Other comprehensive loss | | | — | | | | | | — | | | | | | — | | | | | | (84,893) | | | | | | — | | | | | | (84,893) | | |

| Issuance of common stock upon exercise of options | | | 2,632,324 | | | | | | 173,643 | | | | | | — | | | | | | — | | | | | | — | | | | | | 173,643 | | |

| Repurchases of common stock | | | (1,182,410) | | | | | | — | | | | | | (600,022) | | | | | | — | | | | | | — | | | | | | (600,022) | | |

Participations and residuals are expensed in line with the amortization of production costs.

The Company's allowance for credit losses was not material as of December 31, 2023 and December 31, 2022.

Revenues are

Marketing

Advertising costs are expensed as incurred.

These forward contracts

| | | |

| --- | --- | --- |

| Employee stock options | | | 7,927 | | | | | | 6,592 | | | | | | 12,217 | | |

The following table summarizes the potential common shares excluded from the diluted calculation:

| Employee stock options | | | 4,109 | | | | | | 6,790 | | | | | | 348 | | |

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Cash | | | $ | 4,071,584 | | | | | | | | | | | $ | — | | | | | $ | 3,410 | | | | | $ | 19,874 | | | | | $ | 4,094,868 | |

| Money market funds | | | 569,826 | | | | | | | | | | | | — | | | | | | — | | | | | | 122 | | | | | | 569,948 | | |

| Time Deposits (2) | | | 505,766 | | | | | | | | | | | | 911,276 | | | | | | — | | | | | | — | | | | | | 1,417,042 | | |

| | | | $ | 5,147,176 | | | | | | | | | | | $ | 911,276 | | | | | $ | 3,410 | | | | | $ | 19,996 | | | | | $ | 6,081,858 | |

| | | | 18,935,355 | | | | | | 20,004,164 | | |

As of December 31, 2023, the amount of accrued participations and residuals was not material.

| Land | | | | | | $ | 88,429 | | | | | $ | 85,005 | | | | | | | |

| Buildings | | | | | | 150,736 | | | | | | 52,106 | | | | | | 30 years | | |

| 2024 | | | $ | 460,353 | |

| 2025 | | | 424,897 | | |

| 2026 | | | 401,306 | | |

| 2027 | | | 340,245 | | |

| 2028 | | | 282,465 | | |

| Thereafter | | | 827,117 | | |

| | | | 2,736,383 | | |

The decrease in Other was primarily driven by receipt of amounts due under a modified content licensing arrangement.

As of December 31, 2022, the Company had aggregate outstanding long-term notes of $14,353 million, net of $79 million of issuance costs.

| | | | $ | 14,608 | | | | | $ | 14,432 | | | | | | | | | | | | | | | | | $ | 15,018 | | | | | $ | 14,083 | |

On March 6, 2023, the Company amended its $1 billion unsecured revolving credit facility ("Revolving Credit Agreement") to replace the London interbank offered rate to a variable secured overnight financing rate (the “Term SOFR Rate”) as the rate to which interest payments are indexed, among other things.

The Revolving Credit Agreement matures on June 17, 2026.