Netflix (NFLX) 10-K risk factor changes: FY2025 vs FY2024

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

Members cancel our service for many reasons, including a perception that they do not use the service sufficiently, that they need to cut household expenses, dissatisfaction with content, [added: including any advertisements that may appear on our service,] a preference for competitive services and customer service issues that they believe are not satisfactorily resolved.

Adverse macroeconomic conditions, including [added: as a result of] inflation, may also adversely impact our ability to attract and retain members.

If we do not grow as expected, given, in particular, that our content costs are largely fixed in nature, we may not be able to adjust our expenditures or increase our [removed: (per membership)] revenues, including by adjusting membership pricing, commensurate with the lowered growth rate such that our margins, liquidity and results of operations may be adversely impacted.

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

The market for entertainment [added: video] is intensely competitive and subject to rapid change.

The various economic models underlying these channels include subscription, [added: which may be bundled with other services,] transactional, ad-supported and piracy-based models.

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

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[removed: They may offer more compelling content or secure better terms] from suppliers, adopt more aggressive pricing and devote more resources to product development, technology, infrastructure, content acquisitions and marketing.

In addition, new technological developments, including the development and use of generative [removed: artificial intelligence,] [added: AI,] are rapidly evolving.

If we fail to maintain a positive reputation concerning our service and the content we offer, [added: including any advertisements,] we may not be able to attract or retain members, we may face regulatory scrutiny and our operating results may be adversely affected.

To the extent our [removed: content] [added: content, including any advertisements that may appear on our service,] 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.

To the extent our [removed: content] [added: content, including any advertisements,] is deemed controversial or offensive by government regulators, we may face direct or indirect [added: retaliatory action or behavior, including being]

[removed: 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.

We could also face [added: consumer] boycotts [added: or cancellation campaigns,] which could adversely affect our business.

There is [removed: an increasing] [added: a] focus from regulators, investors, members and other stakeholders on environmental, social, and governance (“ESG”) matters, both in the United States and internationally, including the adoption of new disclosure and regulatory frameworks.

To the extent 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 [removed: ESG related] [added: ESG-related] concerns, our reputation may be harmed.

If partners or other providers do a better job of connecting consumers with content they want to watch, for example through multi-service discovery [removed: interfaces,] [added: interfaces (including those powered by generative AI),] our service may be adversely impacted.

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

We rely on internal systems and those of third parties to process [removed: payment.][added: payments.]

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

If we are unable to maintain our fraud and chargeback rate at acceptable levels, card networks may [added: 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 [removed: artificial intelligence,] [added: AI,] are nascent and rapidly evolving such that the impact on areas related to our business remains uncertain.

For example, [added: in January 2025,] a U.S. federal appeals court [removed: recently] overturned the Federal Communications Commission's net neutrality rules.

Our advertising offering is [removed: new and] subject to various risks and uncertainties, which may adversely affect our business.

- adverse legal developments relating to [removed: advertising] [added: advertising, targeting,] or measurement tools;

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

[removed: We may be unable, without] significant cost or at all, to prevent third parties from acquiring domain names that are similar to, infringe upon or otherwise decrease the value of our trademarks and other proprietary rights.

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

In addition, the use or adoption of new and emerging technologies may increase our exposure to intellectual property [removed: claims, and the availability of copyright and other intellectual property protection for AI-generated material is uncertain.][added: claims.]

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

[removed: These efforts] require ongoing monitoring and updating as technologies change and efforts to overcome security measures become more sophisticated, and may limit the functionality of or otherwise negatively impact our service offering and systems.

[added: We also utilize our own and third-party] content delivery networks [removed: ("CDN")] [added: (“CDN”)] to help us stream content and offer games in high volume to Netflix members over the internet.

We have architected our software and computer systems [removed: so as] to utilize data processing, storage capabilities and other services provided by AWS.

While the retail side of Amazon competes with us, we do not believe that Amazon will use the AWS operation in [removed: such] a manner [removed: as] to gain competitive advantage against our service, although if it were to do so it could harm our business.

Likewise, if our recommendation and merchandising technology does not enable us to predict and recommend titles that our members will [removed: enjoy,] [added: enjoy or] our [added: competitors' technology provides a better experience to consumers, our] ability to attract and retain members may be adversely affected.

Any actual or perceived failure to comply with the GDPR, the California Consumer Privacy Act/CPRA, other data privacy laws or regulations, or related contractual or other obligations, or any perceived privacy rights violation, have and could in the future lead to investigations, claims, and proceedings by governmental entities and private parties, which to date have not been material but [added: 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.]

Such commitments, to the extent estimable under accounting standards, are included in the Contractual Obligations section of Part II, Item 7, [removed: "Management's] [added: “Management's] Discussion and Analysis of Financial Condition and Results of [removed: Operations"] [added: Operations”] and Note [removed: 8,] [added: 9,] Commitments and Contingencies in the accompanying notes to our consolidated financial statements included in Part II, Item 8, [removed: "Financial] [added: “Financial] Statements and Supplementary [removed: Data"] [added: Data”] of this Annual Report on Form 10-K.

To the extent revenue growth does not meet our expectations, our liquidity and results of operations could be adversely affected as a [removed: result of content commitments and accelerated payment requirements of certain agreements.]

They may offer more compelling content or secure better terms

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See Risk Factors – “We have a substantial amount of indebtedness and other obligations, including streaming content obligations, which could adversely affect our financial position, and we may not be able to generate sufficient cash to service our debt and other obligations,” “The WBD transaction may not be completed on the currently contemplated timeline or terms, or at all,” and “The WBD transaction may cause our financial results to differ from expectations, we may not achieve the anticipated benefits of the WBD transaction, and the WBD transaction may disrupt our current plans or operations” for additional information.

In certain

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Additionally, ongoing enforcement of the Digital Markets Act in the EU and similar regulations in other territories, such as Japan, could change how we and other app developers interact with digital gatekeepers, such as Apple and Google, although we are not in scope of these regulations.

In July 2025, in an important joint statement with the United States, the EU committed not to adopt or maintain such network usage fees, although the risk of de facto obligations remains in the EU and in certain other jurisdictions.

- fluctuations in membership plan mix and member engagement;

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We may be unable, without

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For example, the development and use of generative AI tools remain subject to uncertain legal frameworks, and the availability of copyright and other intellectual property protection for AI-generated material is uncertain.

These efforts

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result of content commitments and accelerated payment requirements of certain agreements.

In connection with our transaction with WBD to acquire WBD’s streaming and studios businesses, including its film and television studios, HBO Max and HBO (such transaction, the “WBD transaction”), we expect to incur and/or assume a substantial amount of additional indebtedness, which will materially increase the amount of our outstanding indebtedness and could subject us to additional risks.

We have obtained commitments from financing sources to provide up to a $42.2 billion senior unsecured bridge term loan facility, and we have entered into a $5 billion senior unsecured revolving credit facility and a $20 billion senior unsecured delayed draw term loan facility.

We may draw on such facilities or issue or obtain other debt financing to finance a portion of the cash consideration for the WBD transaction.

In addition, upon completion of the WBD transaction, we expect to assume additional outstanding debt of WBD.

The terms of the indebtedness we may incur or assume in connection with the WBD transaction could vary materially and may include secured debt and/or debt with restrictive covenants that are more burdensome than those in our existing debt arrangements.

To the extent these covenants remain in effect after closing, they could reduce the combined company’s operating and financial flexibility, and the substantial indebtedness to be incurred or assumed in connection with the WBD transaction could further exacerbate the risks described above.

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Additionally, the major U.S. guild collective bargaining agreements to which the Company is a signatory each expire in 2026, with the Writers Guild of America (“WGA”) agreement expiring on May 1, 2026, and the Screen Actors Guild – American Federation of Television and Radio Artists (“SAG-AFTRA”) and Directors Guild of America (“DGA”) agreements both expiring on June 30, 2026.

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Risk Factors Related to the WBD Transaction

The WBD transaction may not be completed on the currently contemplated timeline or terms, or at all.

Consummation of the WBD transaction is conditioned on, among other things, obtaining necessary governmental and regulatory approvals.

If any of the conditions to the WBD transaction are not satisfied, it could delay or prevent the WBD transaction from occurring, which could result in Netflix’s obligation to pay a $5.8 billion termination fee in certain specified circumstances.

Further, as a condition to their approval of the WBD transaction, regulatory agencies may impose requirements, limitations or costs or require divestitures or place restrictions on the conduct of WBD's streaming and studios businesses after the closing.

These requirements, limitations, costs, divestitures or restrictions could jeopardize or delay the consummation of the WBD transaction, may result in a material adverse effect on WBD's streaming and studios businesses or may reduce the anticipated benefits of the WBD transaction.

The WBD transaction may cause our financial results to differ from expectations, we may not achieve the anticipated benefits of the WBD transaction, and the WBD transaction may disrupt our current plans or operations.

The success of the WBD transaction will depend, in part, on our ability to successfully integrate the acquired businesses and realize the anticipated benefits, including synergies.

Difficulties in integrating the acquired businesses may result in the failure to realize anticipated synergies in the expected timeframes, in operational challenges, and in the diversion of management’s attention from ongoing business opportunities, challenges and risks, as well as in unforeseen expenses associated with the WBD transaction, which may have an adverse impact on our financial results.

Membership growth is also impacted by seasonality, with the fourth quarter historically representing our greatest growth, as well as the timing of our content release schedules.

financial, marketing and other resources.

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

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.

- fluctuations in memberships, including those selecting the ad-supported subscription plan, and member engagement;

experiences, and marketing assets based thereon.

We also utilize our own and third-party

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.

our existing indebtedness.

- provide for a classified board of directors until our annual meeting of stockholders to be held in 2025;

pattern and/or period of amortization would be changed and could affect the timing or recognition of content amortization.

This section of this Form 10-K generally discusses [removed: 2024] [added: 2025] and [removed: 2023] [added: 2024] items and year-to-year comparisons between [removed: 2024] [added: 2025] and [removed: 2023.][added: 2024.]

Discussions of [removed: 2022] [added: 2023] items and year-to-year comparisons between [removed: 2023] [added: 2024] and [removed: 2022] [added: 2023] that are not included in this Form 10-K can be found in [removed: "Management's] [added: “Management's] Discussion and Analysis of Financial Condition and Results of [removed: Operations"] [added: Operations”] in Part II, Item 7 of the Company's Annual Report on Form 10-K for the fiscal year ended December 31, [removed: 2023.][added: 2024.]

The following represents our consolidated performance [removed: highlights:][added: highlights(1):]

| | | | | | | [removed: As of/Year] [added: Year] Ended December 31, | | | | | | | | | | | | | | | | | | [added: | | | | | | | | | | | | | | | | | | | | | | | |] Change | | | [added: | | | | | |]

| | | | | | | [added: 2025 | | | | | |] 2024 | | | | | | 2023 | | | | | | [removed: 2022] [added: 2025 vs. 2024] | | | | | | [removed: 2024 vs. 2023] | | |

| | | | | | | (in thousands, except [removed: revenue per membership and] percentages) | | | | | | | | | | | | | | | | | | | | | [added: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |]

| Financial Results: | | | | | | | | | | | | | | | | | | | | | | | | | | | [added: | | | | | |]

| Streaming revenues | | | | | | $ | [added: 45,183,036 | | | | | $ |] 39,000,966 | | | | | $ | 33,640,458 | | | | | $ | [removed: 31,469,852] [added: 6,182,070] | | | | | 16 | | % |

| DVD [removed: revenues (1)] [added: revenues(2)] | | | | | | [added: $ |] — | | | | | [added: $] | [removed: 82,839] [added: —] | | | | | [added: $] | [removed: 145,698] [added: 82,839] | | | | | [added: $] | [removed: (100)] [added: —] | | [added: | | | — | |] % |

| Total revenues | | | | | | $ | [added: 45,183,036 | | | | | $ |] 39,000,966 | | | | | $ | 33,723,297 | | | | | [removed: $] [added: $] | [removed: 31,615,550] [added: 6,182,070] | | | | | 16 | | % |

| Operating income | | | | | | $ | [added: 13,326,603 | | | | | $ |] 10,417,614 | | | | | $ | 6,954,003 | | | | | $ | [removed: 5,632,831] [added: 2,908,989] | | | | | [removed: 50] [added: 28] | | % |

| Constant currency change [removed: (3)] [added: in revenues(3)] | | | | | | | | | | | | | | | | | | | | | | | | [removed: 4] | | [added: | | | | 17 | |] % |

[removed: (1)] [added: (2)] We discontinued our DVD-by-mail service in the year ended December 31, 2023.

[removed: (3)] We believe the non-GAAP financial measure of constant currency revenue is useful in analyzing [removed: the underlying trends] [added: period-to-period comparisons] in [removed: average monthly revenue per paying membership (“ARM”)] [added: revenues] absent foreign currency fluctuations.

In order to exclude the effect of foreign currency rate fluctuations on [removed: ARM,] [added: revenue,] we calculate current period revenue assuming foreign exchange rates had remained constant with foreign exchange rates from each of the corresponding months of the prior-year period and exclude the impact of hedging gains or losses realized as revenues.

Constant currency percentage change in [removed: ARM] [added: revenues] is calculated as the percentage change between current period constant currency [removed: ARM] [added: revenue] and the prior comparative period [removed: ARM.][added: revenue.]

Operating margin for the year ended December 31, [removed: 2024] [added: 2025] increased [removed: six] [added: by approximately three] percentage points as compared to the prior comparative period, primarily [removed: due to] [added: driven by the growth in] revenues [removed: growing at a faster rate as compared to] [added: outpacing] the growth in cost of revenues, sales and marketing, and [removed: technology and development expenses, coupled with lower] general and administrative expenses.

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[removed: Streaming Revenues][added: Revenues]

As of December 31, [removed: 2024,] [added: 2025,] pricing on our paid plans ranged from the U.S. dollar equivalent of $1 to [removed: $32] [added: $37] per month, and pricing on our extra member sub accounts ranged from the U.S. dollar equivalent of $2 to [removed: $8] [added: $9] per month.

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

Revenues earned from sources other than monthly membership fees were not a material component of [removed: streaming] revenues for the years ended December 31, [added: 2025,] 2024, [removed: 2023,] and [removed: 2022.][added: 2023.]

| | | | | | | [removed: 2024] [added: 2025] | | | | | | [removed: 2023] [added: 2024] | | | | | | [removed: 2022] [added: 2023] | | | | | | [removed: 2024] [added: 2025] vs. [removed: 2023] [added: 2024] | | | | | | | | |

| [added: Total] Streaming [removed: revenues] [added: Revenues] | | | | | | $ | [removed: 39,000,966] [added: 45,183,036] | | | | | $ | [removed: 33,640,458] [added: 39,000,966] | | | | | $ | [removed: 31,469,852] [added: 33,640,458] | | | | | $ | [removed: 5,360,508] [added: 6,182,070] | | | | | 16 | | % |

[removed: Streaming revenues] [added: Revenues] for the year ended December 31, [removed: 2024] [added: 2025] increased 16% as compared to the year ended December 31, [removed: 2023,] [added: 2024,] primarily due to the growth in [removed: average paying memberships and] [added: memberships,] price increases, [added: and increased advertising revenue,] partially offset by unfavorable changes in foreign exchange [removed: rates.][added: rates, net of hedging.]

The following [removed: tables summarize] [added: table summarizes] streaming revenues [removed: and other streaming membership information] by region for the years ended December 31, [removed: 2024, 2023] [added: 2025, 2024] and [removed: 2022.][added: 2023.]

[removed: Hedging] [added: Total streaming revenues are inclusive of hedging] gains [added: (losses)] of [added: $(91) million and] $124 million [removed: are included in “Streaming revenues”] for the [removed: year] [added: years] ended December 31, [removed: 2024.][added: 2025 and 2024, respectively.]

No hedging gains and losses were recognized [removed: as “Streaming revenues”] in [added: total streaming revenues for] the [removed: comparative prior] year [removed: periods.][added: ended December 31, 2023.]

See Note [removed: 7] [added: 8] *Derivative Financial Instruments and Hedging Activities* to the consolidated financial statements for further information regarding the Company’s derivative and non-derivative financial instruments.

[removed: United] [added: | United] States and Canada [removed: (UCAN)][added: (UCAN) | | | | | | $ | 19,957,152 | | | | | $ | 17,359,369 | | | | | $ | 14,873,783 | | | | | $ | 2,597,783 | | | | | 15 | | % |]

| | | | | | | [removed: As of/Year] [added: Year] Ended December 31, | | | | | | | | | | | | | | | | | | Change | | | | | | | | |

| | | | | | | (in thousands, except [removed: revenue per membership and] percentages) | | | | | | | | | | | | | | | | | | | | | | | | | | |

[removed: Europe,] [added: | Europe,] Middle East, and Africa [removed: (EMEA)][added: (EMEA) | | | | | | 14,514,646 | | | | | | 12,387,035 | | | | | | 10,556,487 | | | | | | 2,127,611 | | | | | | 17 | | % |]

Other operating costs include customer service and payment processing fees, including those we pay to our integrated payment partners, as well as other costs [removed: directly] incurred in making our content available to members.

| Cost of revenues | | | | | | $ | [removed: 21,038,464] [added: 23,275,329] | | | | | $ | [removed: 19,715,368] [added: 21,038,464] | | | | | $ | [removed: 19,168,285] [added: 19,715,368] | | | | | $ | [removed: 1,323,096] [added: 2,236,865] | | | | | [removed: 7] [added: 11] | | % |

| As a percentage of revenues | | | | | | [removed: 54] [added: 52] | | % | | | | [removed: 58] [added: 54] | | % | | | | [removed: 61] [added: 58] | | % | | | | | | | | | | | | |

The increase in cost of revenues for the year ended December 31, [removed: 2024] [added: 2025] as compared to the year ended December 31, [removed: 2023] [added: 2024] was [added: primarily] due to a [removed: $1,104] [added: $1,121] million increase in content amortization relating to our existing and new [removed: content.][added: content, coupled with a $1,116 million increase in other cost of revenues, primarily driven by non-income tax assessments in Brazil.]

[removed: Sales and marketing expenses consist primarily of advertising expenses and certain payments made to] [added: Our] marketing [removed: and advertising sales partners, including] [added: partners include] consumer electronics [removed: ("CE")] [added: (“CE”)] manufacturers, multichannel video programming distributors [removed: ("MVPDs"),] [added: (“MVPDs”),] mobile operators, and ISPs.

[removed: Marketing] [added: Sales and marketing] expenses [removed: include] [added: consist primarily of expenses for] promotional activities such as digital and television [removed: advertising.][added: advertising, and certain payments made to marketing and advertising sales partners.]

| Sales and marketing | | | | | | $ | [removed: 2,917,554] [added: 3,301,306] | | | | | $ | [removed: 2,657,883] [added: 2,917,554] | | | | | $ | [removed: 2,530,502] [added: 2,657,883] | | | | | $ | [removed: 259,671] [added: 383,752] | | | | | [removed: 10] [added: 13] | | % |

| Operating margin | | | | | | 29.5 | | % | | | | 26.7 | | % | | | | 20.6 | | % | | | | 2.8 | | % | | | | | | |

| Net income | | | | | | $ | 10,981,201 | | | | | $ | 8,711,631 | | | | | $ | 5,407,990 | | | | | $ | 2,269,570 | | | | | 26 | | % |

(1) During the year ended December 31, 2025, we discontinued the reporting of membership numbers, including average paying memberships and average monthly revenue per paying membership, focusing instead on revenue and operating margin as the primary financial metrics that we believe best represent our business performance.

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

Net income for the year ended December 31, 2025 increased $2,270 million as compared to the prior comparative period, primarily due to a $2,909 million increase in operating income, driven by a $6,182 million increase in revenues and partially offset by a $2,237 million increase in cost of revenues primarily due to the increase in content amortization and other cost of revenues.

The impact of higher operating income was partially offset by a $487 million increase in the provision for income taxes.

| Revenues | | | | | | $ | 45,183,036 | | | | | $ | 39,000,966 | | | | | $ | 33,723,297 | | | | | $ | 6,182,070 | | | | | 16 | | % |

| Latin America (LATAM) | | | | | | 5,357,521 | | | | | | 4,839,816 | | | | | | 4,446,461 | | | | | | 517,705 | | | | | | 11 | | % |

| Asia-Pacific (APAC) | | | | | | 5,353,717 | | | | | | 4,414,746 | | | | | | 3,763,727 | | | | | | 938,971 | | | | | | 21 | | % |

Non-GAAP Constant Currency Information

The table below summarizes constant currency streaming revenues by region for the year ended December 31, 2025 and the constant currency percentage change in streaming revenues by region for the year ended December 31, 2025 as compared to the year ended December 31, 2024:

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

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

| | | | | | | 2025 | | | | | | | | | | | | | | | | | | | | | | | | 2024 | | | | | | | | | | | | | | | | | | 2025 vs. 2024 | | | | | | | | |

| | | | | | | As Reported | | | | | | Constant Currency Adjustment | | | | | | Hedging (Gains) Losses Included in Revenues | | | | | | Constant Currency Revenues | | | | | | As Reported | | | | | | Hedging (Gains) Losses Included in Revenues | | | | | | Revenues Less Hedging Impact | | | | | | Reported Change | | | | | | Constant Currency Change | | |

| UCAN | | | | | | $ | 19,957,152 | | | | | $ | 36,991 | | | | | $ | (29,791) | | | | | $ | 19,964,352 | | | | | $ | 17,359,369 | | | | | $ | (11,181) | | | | | $ | 17,348,188 | | | | | 15 | | % | | | | 15 | | % |

| EMEA | | | | | | 14,514,646 | | | | | | (374,174) | | | | | | 137,768 | | | | | | 14,278,240 | | | | | | 12,387,035 | | | | | | (25,303) | | | | | | 12,361,732 | | | | | | 17 | | % | | | | 16 | | % |

| LATAM | | | | | | 5,357,521 | | | | | | 457,000 | | | | | | 54,108 | | | | | | 5,868,629 | | | | | | 4,839,816 | | | | | | (58,454) | | | | | | 4,781,362 | | | | | | 11 | | % | | | | 23 | | % |

| APAC | | | | | | 5,353,717 | | | | | | 59,740 | | | | | | (70,942) | | | | | | 5,342,515 | | | | | | 4,414,746 | | | | | | (29,073) | | | | | | 4,385,673 | | | | | | 21 | | % | | | | 22 | | % |

| Total Streaming Revenues | | | | | | $ | 45,183,036 | | | | | $ | 179,557 | | | | | $ | 91,143 | | | | | $ | 45,453,736 | | | | | $ | 39,000,966 | | | | | $ | (124,011) | | | | | $ | 38,876,955 | | | | | 16 | | % | | | | 17 | | % |

[Table of Contents](#ie1400fdbdd2e4bd282737fca9a66fd5a_7)

We do not expect that non-income taxes incurred in Brazil will materially impact our results of operations in future periods.

See Note 9 *Commitments and Contingencies* in the accompanying notes to our consolidated financial statements for further detail on our non-income tax matters.

Our advertising sales partners include advertising technology providers and advertising agencies.

| | | | | | | 2025 | | | | | | 2024 | | | | | | 2023 | | | | | | 2025 vs. 2024 | | | | | | | | |

[Table of Contents](#ie1400fdbdd2e4bd282737fca9a66fd5a_7)

| | | | | | | 2025 | | | | | | 2024 | | | | | | 2023 | | | | | | 2025 vs. 2024 | | | | | | | | |

| | | | | | | 2025 | | | | | | 2024 | | | | | | 2023 | | | | | | 2025 vs. 2024 | | | | | | | | |

The increase in general and administrative expenses for the year ended December 31, 2025 as compared to the year ended December 31, 2024 was primarily due to a $92 million increase in personnel-related costs and a $64 million increase in third-party expenses.

The increase in personnel-related costs was primarily driven by higher share-based compensation expense, while the increase in third-party expenses was attributable to higher legal fees and transaction-related costs, including those associated with the WBD transaction.

| | | | | | | 2025 | | | | | | 2024 | | | | | | 2023 | | | | | | 2025 vs. 2024 | | | | | | | | |

The increase in interest expense for the year ended December 31, 2025 as compared to the year ended December 31, 2024 was primarily driven by higher amortization of debt issuance costs, including approximately $60 million related to financing arrangements entered into in connection with the WBD transaction.

See Note 7 *Debt* for additional details regarding the financing arrangements associated with the WBD transaction.

| | | | | | | 2025 | | | | | | 2024 | | | | | | 2023 | | | | | | 2025 vs. 2024 | | | | | | | | |

In the year

[Table of Contents](#ie1400fdbdd2e4bd282737fca9a66fd5a_7)

| | | | | | | Year Ended December 31, | | | | | | | | | | | | | | | | | | Change | | | | | | | | |

| | | | | | | 2025 | | | | | | 2024 | | | | | | 2023 | | | | | | 2025 vs. 2024 | | | | | | | | |

The increase in our effective tax rate for the year ended December 31, 2025, as compared to the year ended December 31, 2024, is primarily due to a decrease in tax benefits associated with federal research and development tax credits as well as the growth in income before taxes exceeding the growth in excess tax benefits from stock-based compensation.

[Table of Contents](#ie1400fdbdd2e4bd282737fca9a66fd5a_7)

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

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

| Operating margin | | | | | | 27 | | % | | | | 21 | | % | | | | 18 | | % | | | | | | |

| Global Streaming Memberships: | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Paid net membership additions | | | | | | 41,350 | | | | | | 29,529 | | | | | | 8,903 | | | | | | 40 | | % |

| Paid memberships at end of period (2) | | | | | | 301,626 | | | | | | 260,276 | | | | | | 230,747 | | | | | | 16 | | % |

| Average paying memberships | | | | | | 277,730 | | | | | | 240,889 | | | | | | 222,924 | | | | | | 15 | | % |

| Average monthly revenue per paying membership | | | | | | $ | 11.70 | | | | | $ | 11.64 | | | | | $ | 11.76 | | | | | 1 | | % |

(2) A paid membership (also referred to as a paid subscription) is defined as a membership that has the right to receive Netflix service following sign-up and a method of payment being provided, and that is not part of a free trial or certain other promotions that may be offered by the Company to new or rejoining members.

Certain members have the option to add extra member sub accounts.

These extra member sub accounts are not included in paid memberships.

A membership is canceled and ceases to be reflected in the above metrics as of the effective cancellation date.

Voluntary cancellations generally become effective at the end of the prepaid membership period.

Involuntary cancellations, as a result of a failed method of payment, become effective immediately.

Memberships are assigned to territories based on the geographic location used at time of sign-up as determined by the Company’s internal systems, which utilize industry standard geo-location technology.

For the year ended December 31, 2024, our revenues would have been approximately $1,424 million higher, excluding the impact of hedging and had foreign currency exchange rates remained constant with those for the year ended December 31, 2023.

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.

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

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

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

| Paid net membership additions (losses) | | | | | | 9,497 | | | | | | 5,832 | | | | | | (919) | | | | | | 3,665 | | | | | | 63 | | % |

| Paid memberships at end of period | | | | | | 89,625 | | | | | | 80,128 | | | | | | 74,296 | | | | | | 9,497 | | | | | | 12 | | % |

| Average paying memberships | | | | | | 84,112 | | | | | | 76,126 | | | | | | 74,001 | | | | | | 7,986 | | | | | | 10 | | % |

| Average monthly revenue per paying membership | | | | | | $ | 17.20 | | | | | $ | 16.28 | | | | | $ | 15.86 | | | | | $ | 0.92 | | | | | 6 | | % |

| Constant currency change | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 6 | | % |

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

| Paid net membership additions | | | | | | 12,320 | | | | | | 12,084 | | | | | | 2,693 | | | | | | 236 | | | | | | 2 | | % |

| Paid memberships at end of period | | | | | | 101,133 | | | | | | 88,813 | | | | | | 76,729 | | | | | | 12,320 | | | | | | 14 | | % |

| Average paying memberships | | | | | | 94,200 | | | | | | 80,928 | | | | | | 73,904 | | | | | | 13,272 | | | | | | 16 | | % |

| Average monthly revenue per paying membership | | | | | | $ | 10.96 | | | | | $ | 10.87 | | | | | $ | 10.99 | | | | | $ | 0.09 | | | | | 1 | | % |

| Constant currency change | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 1 | | % |

Latin America (LATAM)

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

| Paid net membership additions | | | | | | 7,330 | | | | | | 4,298 | | | | | | 1,738 | | | | | | 3,032 | | | | | | 71 | | % |

| Paid memberships at end of period | | | | | | 53,327 | | | | | | 45,997 | | | | | | 41,699 | | | | | | 7,330 | | | | | | 16 | | % |

| Average paying memberships | | | | | | 48,954 | | | | | | 42,802 | | | | | | 40,000 | | | | | | 6,152 | | | | | | 14 | | % |

| Average monthly revenue per paying membership | | | | | | $ | 8.24 | | | | | $ | 8.66 | | | | | $ | 8.48 | | | | | $ | (0.42) | | | | | (5) | | % |

| Constant currency change | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 21 | | % |

Asia-Pacific (APAC)

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

We are exposed to market risks related to interest rate [removed: changes and the corresponding changes in] [added: changes, which affect] the market values of our [removed: debt] [added: investments] and [added: debt, as well as] foreign currency fluctuations.

At December 31, [removed: 2024,] [added: 2025,] our cash equivalents were generally invested in money market funds and time deposits.

As of December 31, [removed: 2024,] [added: 2025,] we had [removed: $15.7] [added: $14.5] billion of debt, consisting of fixed rate unsecured debt in [removed: fifteen] [added: twelve] tranches due between [removed: 2025] [added: 2026] and 2054.

Refer to Note [removed: 6] [added: 7] *Debt* to the consolidated financial statements for details about all issuances.

Currencies denominated in other than the U.S. dollar accounted for 56% of revenue and [removed: 29%] [added: 31%] of operating expenses for the year ended December 31, [removed: 2024.][added: 2025.]

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

Accordingly, volatility in exchange rates, and in particular a weakening of foreign currencies relative to the U.S. [removed: dollar] [added: dollar,] may negatively affect our revenue and operating income as expressed in U.S. dollars.

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: AOCI] [added: accumulated other comprehensive income (“AOCI”) within Stockholders' equity in the Consolidated Balance Sheets] 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, [removed: 2024] [added: 2025] and December 31, [removed: 2023,] [added: 2024,] the amount recorded in AOCI related to our foreign exchange contracts, before taxes, would have been approximately [removed: $1.9 billion] [added: $2,296 million] and [removed: $958] [added: $1,850] million lower, respectively.

If the U.S dollar strengthened by 10% as of December 31, [removed: 2024] [added: 2025] and December 31, [removed: 2023,] [added: 2024,] the amount recorded in AOCI related to our foreign exchange contracts, before taxes, would have been approximately [removed: $187] [added: $237] million and [removed: $71] [added: $187] million lower, respectively.

[Table of [removed: Contents](#i0a018301e03c425b8202d1e7832f451d_7)][added: Contents](#ie1400fdbdd2e4bd282737fca9a66fd5a_7)]

We designate a portion of our foreign currency-denominated Senior Notes in [removed: euros] [added: Euro] 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.

[removed: In the year ended December 31, 2024, we began entering] [added: 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.

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 [removed: Consolidated Statements of Operations.]

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, [removed: 2024] [added: 2025] and December 31, [removed: 2023,] [added: 2024,] income before income taxes would have been approximately [removed: $38] [added: $1] million and [removed: $516] [added: $38] million lower, respectively, after considering the offsetting impact of the foreign currency exchange contracts and our net investment hedges.

Our revenues, on a constant currency basis, would have been approximately $271 million higher for the year ended December 31, 2025 than our reported revenues of $45,183 million.

Consolidated Statements of Operations.

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.

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

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.

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.

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

See Note [removed: 12,] [added: 13,] *Segment and Geographic Information*, in the accompanying notes to our consolidated financial statements for further detail.

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

[Table of [removed: Contents](#i0a018301e03c425b8202d1e7832f451d_7)][added: Contents](#ie1400fdbdd2e4bd282737fca9a66fd5a_7)]

This includes [removed: content quotas, levies and] investment [removed: obligations.][added: obligations, levies, and content catalog quotas.]

As of December 31, [removed: 2024,] [added: 2025,] we had approximately [removed: 14,000] [added: 16,000] full-time employees.

Of these, approximately [removed: 9,600 (69%)] [added: 10,900 (68%)] were located in the United States and Canada, [removed: 2,200] [added: 2,500] (16%) in Europe, Middle East, and Africa, [removed: 600 (4%)] [added: 1,900 (12%)] in [removed: Latin America] [added: Asia-Pacific] and [removed: 1,600 (11%)] [added: 700 (4%)] in [removed: Asia-Pacific.][added: Latin America.]

We aim to attract and retain great people [removed: -] [added: —] representing a [removed: diverse] [added: broad] array of perspectives and skills [removed: -] [added: —] to work together as a dream team.

[removed: We want] [added: For] more people and cultures to see themselves reflected on [removed: screen - so it’s] [added: screen, it is] important that our employee base [removed: is diverse and] represents the communities we serve.

We conduct pay equity analyses at least annually, and have adopted practices to help ensure that employees from underrepresented groups are not being underpaid based on gender identity (globally) and race or ethnicity [removed: (U.S.)] [added: (United States (“U.S.”))] relative to others doing the same or similar work under comparable circumstances.

Our business is to entertain the world across different countries, cultures, languages and tastes.

To entertain an audience this global, our Company needs to reflect the world and the variety of stories we tell.

To help ensure our workforce is representative of the members we serve, we employ people in multiple countries around the world and work to maintain a global culture of inclusion.

We believe an important component of our success is our company culture as detailed in the “Netflix Culture Memo”, which was updated in 2024.

Our culture is focused on excellence and creating an environment where talented people can thrive — lifting ourselves, each other and our audiences higher and higher.

We engage employees and seek feedback through regular town halls, surveys, business reviews and memos, which we often share broadly, inviting comments.

[Table of Contents](#ie1400fdbdd2e4bd282737fca9a66fd5a_7)

[Table of Contents](#ie1400fdbdd2e4bd282737fca9a66fd5a_7)

SEASONALITY

Our membership growth exhibits a seasonal pattern that reflects variations when consumers buy internet-connected screens and when they tend to increase their viewing.

Historically, the fourth quarter represents our greatest streaming membership growth.

In addition, our membership growth can be impacted by our content release schedule and changes to pricing and plans.

We believe 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 employees to perform the best work of their lives in pursuit of excellence.

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.

As we have expanded our offices globally, our company culture remains an important aspect of our operations.

We are mindful of cultural differences across and within regions.

Fostering a work environment that is culturally diverse, inclusive and equitable is a major focus for us.

We work to build diversity, inclusion and equity into all aspects of our operations globally, with the goal of having diversity and inclusion function as a critical lens through which each Netflix employee carries out their role.

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

We also support numerous employee resource groups (ERGs), representing employees and allies from a broad array of historically underrepresented and/or marginalized communities.

We publish annually an update on our inclusion initiatives and progress, which further highlights our approach to diversity and inclusion, and publish our EEO-1 reports on our website.

We believe in fostering great leaders.

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.

We aim to equip our people leaders (officers, VPs, directors, and manager-level employees) to lead the business and our teams in alignment with our expectations and strategic objectives.

Information with respect to this item may be found in Note [removed: 8] [added: 9] *Commitments and Contingencies* in the accompanying notes to our consolidated financial statements included in Part II, Item 8, [removed: "Financial] [added: “Financial] Statements and Supplementary [removed: Data"] [added: Data”] of this Annual Report on Form 10-K, under the caption [removed: "Legal Proceedings"] [added: “Legal Proceedings”] which information is incorporated herein by reference.

For the fiscal year ended December 31, [removed: 2024][added: 2025]

As of June 30, [removed: 2024] [added: 2025] 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: $287,180,927,160.][added: $565,657,747,980.]

As of December 31, [removed: 2024,] [added: 2025,] there were [removed: 427,757,100] [added: 4,222,162,150] shares of the registrant’s common stock, par value $0.001, outstanding.

Parts of the registrant’s Proxy Statement for the registrant’s [removed: 2025] [added: 2026] Annual Meeting of Stockholders are incorporated by reference into Part III of this Annual Report on Form 10-K.

[Table of [removed: Contents](#i0a018301e03c425b8202d1e7832f451d_7)][added: Contents](#ie1400fdbdd2e4bd282737fca9a66fd5a_7)]

| Item 1. | | | [removed: [Business](#i0a018301e03c425b8202d1e7832f451d_13)] [added: [Business](#ie1400fdbdd2e4bd282737fca9a66fd5a_13)] | | | [removed: [1](#i0a018301e03c425b8202d1e7832f451d_13)] [added: [1](#ie1400fdbdd2e4bd282737fca9a66fd5a_13)] | | |

| Item 1A. | | | [Risk [removed: Factors](#i0a018301e03c425b8202d1e7832f451d_16)] [added: Factors](#ie1400fdbdd2e4bd282737fca9a66fd5a_16)] | | | [removed: [4](#i0a018301e03c425b8202d1e7832f451d_16)] [added: [4](#ie1400fdbdd2e4bd282737fca9a66fd5a_16)] | | |

| Item 1B. | | | [Unresolved Staff [removed: Comments](#i0a018301e03c425b8202d1e7832f451d_19)] [added: Comments](#ie1400fdbdd2e4bd282737fca9a66fd5a_19)] | | | [removed: [15](#i0a018301e03c425b8202d1e7832f451d_19)] [added: [15](#ie1400fdbdd2e4bd282737fca9a66fd5a_19)] | | |

| Item 1C. | | | [removed: [Cybersecurity](#i0a018301e03c425b8202d1e7832f451d_22)] [added: [Cybersecurity](#ie1400fdbdd2e4bd282737fca9a66fd5a_22)] | | | [removed: [15](#i0a018301e03c425b8202d1e7832f451d_22)] [added: [15](#ie1400fdbdd2e4bd282737fca9a66fd5a_22)] | | |

| Item 2. | | | [removed: [Properties](#i0a018301e03c425b8202d1e7832f451d_25)] [added: [Properties](#ie1400fdbdd2e4bd282737fca9a66fd5a_25)] | | | [removed: [16](#i0a018301e03c425b8202d1e7832f451d_25)] [added: [17](#ie1400fdbdd2e4bd282737fca9a66fd5a_25)] | | |

| Item 3. | | | [Legal [removed: Proceedings](#i0a018301e03c425b8202d1e7832f451d_28)] [added: Proceedings](#ie1400fdbdd2e4bd282737fca9a66fd5a_28)] | | | [removed: [16](#i0a018301e03c425b8202d1e7832f451d_28)] [added: [17](#ie1400fdbdd2e4bd282737fca9a66fd5a_28)] | | |

| Item 4. | | | [Mine Safety [removed: Disclosures](#i0a018301e03c425b8202d1e7832f451d_31)] [added: Disclosures](#ie1400fdbdd2e4bd282737fca9a66fd5a_31)] | | | [removed: [16](#i0a018301e03c425b8202d1e7832f451d_31)] [added: [17](#ie1400fdbdd2e4bd282737fca9a66fd5a_31)] | | |

| Item 5. | | | [Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity [removed: Securities](#i0a018301e03c425b8202d1e7832f451d_37)] [added: Securities](#ie1400fdbdd2e4bd282737fca9a66fd5a_37)] | | | [removed: [17](#i0a018301e03c425b8202d1e7832f451d_37)] [added: [18](#ie1400fdbdd2e4bd282737fca9a66fd5a_37)] | | |

| Item 6. | | | [removed: [\[Reserved\]](#i0a018301e03c425b8202d1e7832f451d_40)] [added: [\[Reserved\]](#ie1400fdbdd2e4bd282737fca9a66fd5a_40)] | | | [removed: [18](#i0a018301e03c425b8202d1e7832f451d_40)] [added: [19](#ie1400fdbdd2e4bd282737fca9a66fd5a_40)] | | |

| Item 7. | | | [Management’s Discussion and Analysis of Financial Condition and Results of [removed: Operations](#i0a018301e03c425b8202d1e7832f451d_46)] [added: Operations](#ie1400fdbdd2e4bd282737fca9a66fd5a_46)] | | | [removed: [19](#i0a018301e03c425b8202d1e7832f451d_46)] [added: [20](#ie1400fdbdd2e4bd282737fca9a66fd5a_46)] | | |

| Item 7A. | | | [Quantitative and Qualitative Disclosures About Market [removed: Risk](#i0a018301e03c425b8202d1e7832f451d_64)] [added: Risk](#ie1400fdbdd2e4bd282737fca9a66fd5a_64)] | | | [removed: [27](#i0a018301e03c425b8202d1e7832f451d_64)] [added: [29](#ie1400fdbdd2e4bd282737fca9a66fd5a_64)] | | |

| Item 8. | | | [Financial Statements and Supplementary [removed: Data](#i0a018301e03c425b8202d1e7832f451d_70)] [added: Data](#ie1400fdbdd2e4bd282737fca9a66fd5a_70)] | | | [removed: [28](#i0a018301e03c425b8202d1e7832f451d_70)] [added: [30](#ie1400fdbdd2e4bd282737fca9a66fd5a_70)] | | |

| Item 9. | | | [Changes in and Disagreements with Accountants on Accounting and Financial [removed: Disclosure](#i0a018301e03c425b8202d1e7832f451d_73)] [added: Disclosure](#ie1400fdbdd2e4bd282737fca9a66fd5a_73)] | | | [removed: [28](#i0a018301e03c425b8202d1e7832f451d_70)] [added: [30](#ie1400fdbdd2e4bd282737fca9a66fd5a_70)] | | |

| Item 9A. | | | [Controls and [removed: Procedures](#i0a018301e03c425b8202d1e7832f451d_76)] [added: Procedures](#ie1400fdbdd2e4bd282737fca9a66fd5a_76)] | | | [removed: [29](#i0a018301e03c425b8202d1e7832f451d_76)] [added: [31](#ie1400fdbdd2e4bd282737fca9a66fd5a_76)] | | |

| Item 9B. | | | [Other [removed: Information](#i0a018301e03c425b8202d1e7832f451d_79)] [added: Information](#ie1400fdbdd2e4bd282737fca9a66fd5a_79)] | | | [removed: [31](#i0a018301e03c425b8202d1e7832f451d_79)] [added: [33](#ie1400fdbdd2e4bd282737fca9a66fd5a_79)] | | |

| Item 9C. | | | [Disclosure Regarding Foreign Jurisdictions that Prevent [removed: Inspections](#i0a018301e03c425b8202d1e7832f451d_85)] [added: Inspections](#ie1400fdbdd2e4bd282737fca9a66fd5a_85)] | | | [removed: [31](#i0a018301e03c425b8202d1e7832f451d_85)] [added: [33](#ie1400fdbdd2e4bd282737fca9a66fd5a_85)] | | |

| Item 10. | | | [Directors, Executive Officers and Corporate [removed: Governance](#i0a018301e03c425b8202d1e7832f451d_91)] [added: Governance](#ie1400fdbdd2e4bd282737fca9a66fd5a_91)] | | | [removed: [32](#i0a018301e03c425b8202d1e7832f451d_91)] [added: [34](#ie1400fdbdd2e4bd282737fca9a66fd5a_91)] | | |

| Item 11. | | | [Executive [removed: Compensation](#i0a018301e03c425b8202d1e7832f451d_94)] [added: Compensation](#ie1400fdbdd2e4bd282737fca9a66fd5a_94)] | | | [removed: [32](#i0a018301e03c425b8202d1e7832f451d_94)] [added: [34](#ie1400fdbdd2e4bd282737fca9a66fd5a_94)] | | |

| Item 12. | | | [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder [removed: Matters](#i0a018301e03c425b8202d1e7832f451d_97)] [added: Matters](#ie1400fdbdd2e4bd282737fca9a66fd5a_97)] | | | [removed: [32](#i0a018301e03c425b8202d1e7832f451d_97)] [added: [34](#ie1400fdbdd2e4bd282737fca9a66fd5a_97)] | | |

| Item 13. | | | [Certain Relationships and Related Transactions, and Director [removed: Independence](#i0a018301e03c425b8202d1e7832f451d_100)] [added: Independence](#ie1400fdbdd2e4bd282737fca9a66fd5a_100)] | | | [removed: [32](#i0a018301e03c425b8202d1e7832f451d_100)] [added: [34](#ie1400fdbdd2e4bd282737fca9a66fd5a_100)] | | |

| Item 14. | | | [Principal Accountant Fees and [removed: Services](#i0a018301e03c425b8202d1e7832f451d_103)] [added: Services](#ie1400fdbdd2e4bd282737fca9a66fd5a_103)] | | | [removed: [32](#i0a018301e03c425b8202d1e7832f451d_103)] [added: [34](#ie1400fdbdd2e4bd282737fca9a66fd5a_103)] | | |

| Item 15. | | | [Exhibits, Financial Statement [removed: Schedules](#i0a018301e03c425b8202d1e7832f451d_109)] [added: Schedules](#ie1400fdbdd2e4bd282737fca9a66fd5a_109)] | | | [removed: [33](#i0a018301e03c425b8202d1e7832f451d_109)] [added: [35](#ie1400fdbdd2e4bd282737fca9a66fd5a_109)] | | |

| Item 16. | | | [Form 10-K [removed: Summary](#i0a018301e03c425b8202d1e7832f451d_112)] [added: Summary](#ie1400fdbdd2e4bd282737fca9a66fd5a_112)] | | | [removed: [33](#i0a018301e03c425b8202d1e7832f451d_112)] [added: [35](#ie1400fdbdd2e4bd282737fca9a66fd5a_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, [added: cash requirements;] 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; [removed: seasonality;] stock price volatility; impact of foreign exchange rate 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; cybersecurity; price changes and testing; [added: artificial intelligence (“AI”);] 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 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: tax deposits;] resolutions of disputes and other proceedings; our ability to effectively manage change and growth; our company culture; [removed: and our ability to attract and retain qualified employees and key personnel.][added: expectations regarding the transaction with Warner Bros.]

A detailed discussion of these and other risks and uncertainties that could cause actual results and events to differ materially from such forward-looking statements is included throughout this filing and particularly in Item [removed: 1A: "Risk Factors" section] [added: 1A:* “*Risk Factors*” *section] set forth in this Annual Report on Form 10-K.

[Table of Contents](#ie1400fdbdd2e4bd282737fca9a66fd5a_7)

Discovery, Inc. ("WBD"); and our ability to attract and retain qualified employees and key personnel.

The [removed: Vice President of Security and] [added: Senior Director, Security,] Privacy [removed: Engineering] [added: & Assurance] leads our global information security organization responsible for overseeing the Netflix information security program.

Our [removed: VP of Security and] [added: Senior Director, Security,] Privacy [removed: Engineering] [added: & Assurance] has over [removed: 30] [added: 20] years of [removed: industry experience, including serving] [added: experience] in [removed: similar roles leading] [added: information security] and [added: held senior leadership roles] overseeing cybersecurity programs at other [removed: public] companies.

The Audit Committee of the Board oversees our cybersecurity risk and receives regular reports from our [removed: VP of Security and] [added: Senior Director, Security,] Privacy [removed: Engineering] [added: & Assurance] on various cybersecurity matters, including risk assessments, mitigation strategies, areas of emerging risks, incidents and industry trends, and other areas of importance.

[Table of [removed: Contents](#i0a018301e03c425b8202d1e7832f451d_7)][added: Contents](#ie1400fdbdd2e4bd282737fca9a66fd5a_7)]

Generative AI could intensify these cybersecurity risks.

[Table of Contents](#ie1400fdbdd2e4bd282737fca9a66fd5a_7)

[Table of [removed: Contents](#i0a018301e03c425b8202d1e7832f451d_7)][added: Contents](#ie1400fdbdd2e4bd282737fca9a66fd5a_7)]

As of December 31, [removed: 2024,] [added: 2025,] there were approximately [removed: 2,752] [added: 3,103] 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: 2024] [added: 2025] were as follows:

| Period | | | | | | Total Number of Shares [removed: Purchased (1)] [added: Purchased(1)] | | | | | | Average Price Paid per [removed: Share (2)] [added: Share(2)] | | | | | | Total Number of Shares Purchased as Part of Publicly Announced [removed: Programs (1)] [added: Programs(1)] | | | | | | Approximate Dollar Value of Shares that May Yet Be Purchased Under the [removed: Program (1)] [added: Program(1)] | | |

| (1) In September 2023, the [added: 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 [removed: 9] [added: 10] *Stockholders’ Equity* to the consolidated financial statements in this Annual Report. | | |

[Table of [removed: Contents](#i0a018301e03c425b8202d1e7832f451d_7)][added: Contents](#ie1400fdbdd2e4bd282737fca9a66fd5a_7)]

The following graph compares, for the five year period ended December 31, [removed: 2024,] [added: 2025,] the total cumulative stockholder return on the Company’s common [removed: stock] [added: 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: 2019, December 31,] 2020, December 31, 2021, December 31, 2022, December 31, [removed: 2023] [added: 2023, December 31, 2024] and December 31, [removed: 2024.][added: 2025.]

[removed: ][added: ]

*Stock Split*

On November 14, 2025, the Company completed a ten-for-one forward stock split of the Company's issued common stock (the "Stock Split").

Each shareholder as of the record date of November 10, 2025 received nine additional shares of common stock for every share held.

References made to share or per share amounts in the accompanying consolidated financial statements and applicable disclosures have been retroactively adjusted to reflect the Stock Split.

See Note 10 *Stockholders' Equity* for additional information.

| October 1 - 31, 2025 | | | | | | 5,583,110 | | | | | | $ | 117.27 | | | | | 5,583,110 | | | | | | $ | 9,471,608 | |

| November 1 - 30, 2025 | | | | | | 9,304,465 | | | | | | $ | 108.53 | | | | | 9,304,465 | | | | | | $ | 8,461,794 | |

| December 1 - 31, 2025 | | | | | | 3,994,670 | | | | | | $ | 103.89 | | | | | 3,994,670 | | | | | | $ | 8,046,784 | |

| Total | | | | | | 18,882,245 | | | | | | | | | | | | 18,882,245 | | | | | | | | |

| 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 | | | | | | | | |

[Table of [removed: Contents](#i0a018301e03c425b8202d1e7832f451d_7)][added: Contents](#ie1400fdbdd2e4bd282737fca9a66fd5a_7)]

[Table of [removed: Contents](#i0a018301e03c425b8202d1e7832f451d_7)][added: Contents](#ie1400fdbdd2e4bd282737fca9a66fd5a_7)]

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 [removed: error] [added: errors] and all fraud.

Our management assessed the effectiveness of our internal control over financial reporting as of December 31, [removed: 2024.][added: 2025.]

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: 2024.][added: 2025.]

The effectiveness of our internal control over financial reporting as of December 31, [removed: 2024] [added: 2025] 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: 2024] [added: 2025] that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

[Table of [removed: Contents](#i0a018301e03c425b8202d1e7832f451d_7)][added: Contents](#ie1400fdbdd2e4bd282737fca9a66fd5a_7)]

We have audited Netflix, Inc.’s internal control over financial reporting as of December 31, [removed: 2024,] [added: 2025,] based on criteria established in Internal [removed: Control-Integrated] [added: 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: 2024,] [added: 2025,] 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: 2024] [added: 2025] and [removed: 2023,] [added: 2024,] 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: 2024,] [added: 2025,] and the related notes and our report dated January [removed: 27, 2025] [added: 23, 2026] expressed an unqualified opinion thereon.

| January 23, 2026 | | | | | |

[Table of Contents](#ie1400fdbdd2e4bd282737fca9a66fd5a_7)

| January 27, 2025 | | | | | |

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: 2024,] [added: 2025,] 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:

| Name | | | | | | Title | | | | | | Action | | | | | | Date Adopted | | | | | | Expiration Date | | | | | | Aggregate # of Securities to be [removed: Purchased/Sold] [added: Purchased/Sold(1)] | | |

| Greg [removed: Peters (1)] [added: Peters(3)] | | | | | | Co-CEO and Director | | | | | | Termination | | | | | | [removed: 10/30/2024] [added: 10/30/2025] | | | | | | N/A | | | | | | [removed: 187,913] [added: 1,585,830] | | |

| Greg [removed: Peters (2)] [added: Peters(4)] | | | | | | Co-CEO and Director | | | | | | Adoption | | | | | | [removed: 10/30/2024] [added: 10/30/2025] | | | | | | [removed: 11/1/2027] [added: 12/31/2029] | | | | | | [removed: 158,583] [added: 2,951,230] | | |

| Spencer [removed: Neumann (5)] [added: Neumann(2)] | | | | | | Chief Financial Officer | | | | | | Adoption | | | | | | [removed: 10/29/2024] [added: 10/23/2025] | | | | | | [removed: 12/31/2025] [added: 12/31/2026] | | | | | | [removed: 33,406] [added: 314,880] | | |

| Ann [removed: Mather (6)] [added: Mather(5)] | | | | | | Director | | | | | | Adoption | | | | | | [removed: 10/31/2024] [added: 11/7/2025] | | | | | | [removed: 12/31/2025] [added: 12/31/2026] | | | | | | [removed: 2,682] [added: 23,430] | | |

| [removed: (1)] [added: (3)] On October 30, [removed: 2024,] [added: 2025,] 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 [removed: July 26, 2023 and] [added: October 30, 2024. The plan] provided for the potential exercise [added: and sale] of vested stock [removed: options and] [added: options, as well as] the [removed: associated] sale of [added: Performance Share Units (PSUs) that were expected to vest during the term of the 10b5-1 plan (assuming vest at 100% of the target award amount) for] up to [removed: 187,913] [added: 1,585,830] shares of Netflix common stock until November 1, 2027 or the earlier completion of all authorized transactions under the plan. | | |

| [removed: (2)] [added: (4)] Upon termination of Mr. Peters' prior plan (described in footnote [removed: 1),] [added: 3),] on October 30, [removed: 2024,] [added: 2025,] 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 [removed: 158,583] [added: 2,951,230] shares of Netflix common stock. This figure includes [removed: a grant of 31,112 Performance Share Units (PSUs)] [added: 380,720 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 [removed: November 1, 2027,] [added: December 31, 2029,] or upon the earlier completion of all authorized transactions under the plan. | | |

| [removed: (3) David Hyman,] [added: (2) Spencer Neumann,] Chief [removed: Legal] [added: Financial] Officer, entered into a pre-arranged stock trading plan pursuant to Rule 10b5-1 on October [removed: 29, 2024.] [added: 23, 2025.] Mr. [removed: Hyman's] [added: Neumann's] plan provides for the potential exercise of vested stock options and the associated sale of up to [removed: 104,154] [added: 314,880] shares of Netflix common stock. [removed: 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 [removed: 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 [removed: January 30,] [added: December 31,] 2026, or upon the earlier completion of all authorized transactions under the plan. | | |

| [removed: (4) Ted Sarandos, co-CEO and] [added: (5) Ann Mather,] a member of the Board of Directors, entered into a pre-arranged stock trading plan pursuant to Rule 10b5-1 on [removed: October 25, 2024. Mr. Sarandos'] [added: November 7, 2025. Ms. Mather's] plan provides for the potential exercise of vested stock options and the associated sale of up to [removed: 199,063] [added: 23,430] shares of Netflix common stock. The plan expires on [removed: February 27,] [added: December 31,] 2026, or upon the earlier completion of all authorized transactions under the plan. | | |

| (1) Aggregated shares covered have been adjusted to reflect the effect of the Stock Split. See Note 1 *Organization and Summary of Significant Accounting Policies* for further information regarding the Stock Split. | | |

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

| Ted Sarandos (4) | | | | | | Co-CEO and Director | | | | | | Adoption | | | | | | 10/25/2024 | | | | | | 2/27/2026 | | | | | | 199,063 | | |

| 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 | | |

| (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. | | |

[Table of [removed: Contents](#i0a018301e03c425b8202d1e7832f451d_7)][added: Contents](#ie1400fdbdd2e4bd282737fca9a66fd5a_7)]

Information regarding our directors and executive officers is incorporated by reference from the information contained under the sections “Proposal One: Election of Directors,” [added: “Our Company Executive Officers,"] and [removed: “Code of Ethics”] [added: "Other Information”] in our Proxy Statement for the Annual Meeting of Stockholders.

The Company has adopted an insider trading policy which governs transactions in our securities by the Company and its directors, officers, employees, consultants, and [removed: contractors and] [added: contractors, which the Company believes] is [added: reasonably] designed to promote compliance with insider trading laws, rules and [removed: regulations] [added: regulations, and any listing standards] applicable to the Company.

[Table of [removed: Contents](#i0a018301e03c425b8202d1e7832f451d_7)][added: Contents](#ie1400fdbdd2e4bd282737fca9a66fd5a_7)]

[Table of [removed: Contents](#i0a018301e03c425b8202d1e7832f451d_7)][added: Contents](#ie1400fdbdd2e4bd282737fca9a66fd5a_7)]

| [Report of Independent Registered Public Accounting [removed: Firm](#i0a018301e03c425b8202d1e7832f451d_118)] [added: Firm](#ie1400fdbdd2e4bd282737fca9a66fd5a_118)] (PCAOB ID: 42) | | | [removed: [35](#i0a018301e03c425b8202d1e7832f451d_118)] [added: [37](#ie1400fdbdd2e4bd282737fca9a66fd5a_118)] | | |

| [Consolidated Statements of [removed: Operations](#i0a018301e03c425b8202d1e7832f451d_124)] [added: Operations](#ie1400fdbdd2e4bd282737fca9a66fd5a_124)] | | | [removed: [37](#i0a018301e03c425b8202d1e7832f451d_124)] [added: [39](#ie1400fdbdd2e4bd282737fca9a66fd5a_124)] | | |

| [Consolidated Statements of Comprehensive [removed: Income](#i0a018301e03c425b8202d1e7832f451d_127)] [added: Income](#ie1400fdbdd2e4bd282737fca9a66fd5a_127)] | | | [removed: [38](#i0a018301e03c425b8202d1e7832f451d_127)] [added: [40](#ie1400fdbdd2e4bd282737fca9a66fd5a_127)] | | |

| [Consolidated Statements of Cash [removed: Flows](#i0a018301e03c425b8202d1e7832f451d_133)] [added: Flows](#ie1400fdbdd2e4bd282737fca9a66fd5a_133)] | | | [removed: [39](#i0a018301e03c425b8202d1e7832f451d_133)] [added: [41](#ie1400fdbdd2e4bd282737fca9a66fd5a_133)] | | |

| [Consolidated Balance [removed: Sheets](#i0a018301e03c425b8202d1e7832f451d_136)] [added: Sheets](#ie1400fdbdd2e4bd282737fca9a66fd5a_136)] | | | [removed: [40](#i0a018301e03c425b8202d1e7832f451d_136)] [added: [42](#ie1400fdbdd2e4bd282737fca9a66fd5a_136)] | | |

| [Consolidated Statements of Stockholders’ [removed: Equity](#i0a018301e03c425b8202d1e7832f451d_142)] [added: Equity](#ie1400fdbdd2e4bd282737fca9a66fd5a_142)] | | | [removed: [41](#i0a018301e03c425b8202d1e7832f451d_142)] [added: [43](#ie1400fdbdd2e4bd282737fca9a66fd5a_142)] | | |

| [Notes to Consolidated Financial [removed: Statements](#i0a018301e03c425b8202d1e7832f451d_145)] [added: Statements](#ie1400fdbdd2e4bd282737fca9a66fd5a_145)] | | | [removed: [42](#i0a018301e03c425b8202d1e7832f451d_145)] [added: [44](#ie1400fdbdd2e4bd282737fca9a66fd5a_145)] | | |

We have audited the accompanying consolidated balance sheets of Netflix, Inc. (the Company) as of December 31, [removed: 2024] [added: 2025] and [removed: 2023,] [added: 2024,] 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: 2024,] [added: 2025,] 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: 2024] [added: 2025] and [removed: 2023,] [added: 2024,] and the results of its operations and its cash flows for each of the three years in the period ended December 31, [removed: 2024,] [added: 2025,] 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: 2024,] [added: 2025,] based on criteria established in Internal [removed: Control-Integrated] [added: Control—Integrated] Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework), and our report dated January [removed: 27, 2025] [added: 23, 2026] expressed an unqualified opinion thereon.

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

| Revenues | | | | | | $ | [removed: 39,000,966] [added: 45,183,036] | | | | | $ | [removed: 33,723,297] [added: 39,000,966] | | | | | $ | [removed: 31,615,550] [added: 33,723,297] | |

| Cost of revenues | | | | | | [removed: 21,038,464] [added: 23,275,329] | | | | | | [removed: 19,715,368] [added: 21,038,464] | | | | | | [removed: 19,168,285] [added: 19,715,368] | | |

| Sales and marketing | | | | | | [removed: 2,917,554] [added: 3,301,306] | | | | | | [removed: 2,657,883] [added: 2,917,554] | | | | | | [removed: 2,530,502] [added: 2,657,883] | | |

| Technology and development | | | | | | [removed: 2,925,295] [added: 3,391,390] | | | | | | [removed: 2,675,758] [added: 2,925,295] | | | | | | [removed: 2,711,041] [added: 2,675,758] | | |

| General and administrative | | | | | | [removed: 1,702,039] [added: 1,888,408] | | | | | | [removed: 1,720,285] [added: 1,702,039] | | | | | | [removed: 1,572,891] [added: 1,720,285] | | |

| Operating income | | | | | | [removed: 10,417,614] [added: 13,326,603] | | | | | | [removed: 6,954,003] [added: 10,417,614] | | | | | | [removed: 5,632,831] [added: 6,954,003] | | |

| Interest expense | | | | | | [removed: (718,733)] [added: (776,510)] | | | | | | [removed: (699,826)] [added: (718,733)] | | | | | | [removed: (706,212)] [added: (699,826)] | | |

| Interest and other income (expense) | | | | | | [removed: 266,776] [added: 172,459] | | | | | | [removed: (48,772)] [added: 266,776] | | | | | | [removed: 337,310] [added: (48,772)] | | |

| Income before income taxes | | | | | | [removed: 9,965,657] [added: 12,722,552] | | | | | | [removed: 6,205,405] [added: 9,965,657] | | | | | | [removed: 5,263,929] [added: 6,205,405] | | |

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

| Net income | | | | | | $ | [removed: 8,711,631] [added: 10,981,201] | | | | | $ | [removed: 5,407,990] [added: 8,711,631] | | | | | $ | [removed: 4,491,924] [added: 5,407,990] | |

| | | | [removed: 2024] | | | [added: 2025] | | | [removed: 2023] | | | [added: 2024] | | | [removed: 2022] | | | [added: 2023 | | |]

| Net income | | | $ | [removed: 8,711,631] [added: 10,981,201] | | | | | $ | [removed: 5,407,990] [added: 8,711,631] | | | | | $ | [removed: 4,491,924] [added: 5,407,990] | |

| Foreign currency translation adjustments, net of income tax [removed: (expense)] benefit [added: (expense)] of [added: $33 million,] $(7) million, [removed: $0,] and $0, respectively | | | [removed: (247,949)] [added: 72,011] | | | | | | [removed: 113,384] [added: (247,949)] | | | | | | [removed: (176,811)] [added: 113,384] | | |

| [removed: Change] [added: Net change] in unrealized gains [added: (losses)] on available-for-sale securities, net of income tax [removed: (expense)] benefit [added: (expense)] of [added: $1 million,] $(1) million, [removed: $0,] and $0, respectively | | | [removed: 2,511] [added: (2,511)] | | | | | | [removed: —] [added: 2,511] | | | | | | — | | |

| Net unrealized gains (losses) | | | [removed: 921,227] [added: (1,071,168)] | | | | | | [removed: (120,023)] [added: 921,227] | | | | | | [removed: —] [added: (120,023)] | | |

| Reclassification of net [removed: gains] [added: (gains) losses] included in net income | | | [removed: (96,795)] [added: 68,962] | | | | | | [removed: —] [added: (96,795)] | | | | | | — | | |

| Net change, net of income tax [removed: (expense)] benefit [added: (expense)] of [added: $301 million,] $(246) million, [added: and] $36 million, [removed: and $0,] respectively | | | [removed: 824,432] [added: (1,002,206)] | | | | | | [removed: (120,023)] [added: 824,432] | | | | | | [removed: —] [added: (120,023)] | | |

| Net [added: change in] unrealized gains [added: (losses)] excluded from the assessment of effectiveness, net of income tax [removed: (expense)] benefit [added: (expense)] of [added: $3 million,] $(2) million, [removed: $0,] and $0, respectively | | | [removed: 7,113] [added: (9,838)] | | | | | | [removed: —] [added: 7,113] | | | | | | — | | |

| Total other comprehensive income (loss) | | | [removed: 586,107] [added: (942,544)] | | | | | | [removed: (6,639)] [added: 586,107] | | | | | | [removed: (176,811)] [added: (6,639)] | | |

| Comprehensive income | | | $ | [removed: 9,297,738] [added: 10,038,657] | | | | | $ | [removed: 5,401,351] [added: 9,297,738] | | | | | $ | [removed: 4,315,113] [added: 5,401,351] | |

| Additions to content assets | | | | | | [removed: (16,223,617)] [added: (17,096,617)] | | | | | | [removed: (12,554,703)] [added: (16,223,617)] | | | | | | [removed: (16,839,038)] [added: (12,554,703)] | | |

| Change in content liabilities | | | | | | [removed: (779,135)] [added: (610,838)] | | | | | | [removed: (585,602)] [added: (779,135)] | | | | | | [removed: 179,310] [added: (585,602)] | | |

| Amortization of content assets | | | | | | [removed: 15,301,517] [added: 16,422,166] | | | | | | [removed: 14,197,437] [added: 15,301,517] | | | | | | [removed: 14,026,132] [added: 14,197,437] | | |

| Depreciation and amortization of property, equipment and intangibles | | | | | | [removed: 328,914] [added: 333,389] | | | | | | [removed: 356,947] [added: 328,914] | | | | | | [removed: 336,682] [added: 356,947] | | |

| Stock-based compensation expense | | | | | | [removed: 272,588] [added: 368,449] | | | | | | [removed: 339,368] [added: 272,588] | | | | | | [removed: 575,452] [added: 339,368] | | |

| Foreign currency remeasurement loss (gain) on debt | | | | | | [removed: (121,539)] [added: 72,348] | | | | | | [removed: 176,296] [added: (121,539)] | | | | | | [removed: (353,111)] [added: 176,296] | | |

| Other non-cash items | | | | | | [removed: 494,778] [added: 577,451] | | | | | | [removed: 512,075] [added: 494,778] | | | | | | [removed: 533,543] [added: 512,075] | | |

[Table of Contents](#ie1400fdbdd2e4bd282737fca9a66fd5a_7)

[Table of Contents](#ie1400fdbdd2e4bd282737fca9a66fd5a_7)

| January 23, 2026 | | | | | |

[Table of Contents](#ie1400fdbdd2e4bd282737fca9a66fd5a_7)

| Basic | | | | | | $ | 2.58 | | | | | $ | 2.03 | | | | | $ | 1.22 | |

| Diluted | | | | | | $ | 2.53 | | | | | $ | 1.98 | | | | | $ | 1.20 | |

| Basic | | | | | | 4,249,512 | | | | | | 4,295,191 | | | | | | 4,415,712 | | |

| Diluted | | | | | | 4,343,863 | | | | | | 4,392,608 | | | | | | 4,494,966 | | |

[Table of Contents](#ie1400fdbdd2e4bd282737fca9a66fd5a_7)

[Table of Contents](#ie1400fdbdd2e4bd282737fca9a66fd5a_7)

| Net income | | | | | | $ | 10,981,201 | | | | | $ | 8,711,631 | | | | | $ | 5,407,990 | |

| Acquisitions | | | | | | (17,194) | | | | | | — | | | | | | — | | |

[Table of Contents](#ie1400fdbdd2e4bd282737fca9a66fd5a_7)

| | | | | | | 2025 | | | | | | 2024 | | |

| Treasury stock at cost (346,541,145 and 259,534,600 shares at December 31, 2025 and December 31, 2024) | | | | | | (22,372,658) | | | | | | (13,171,638) | | |

[Table of Contents](#ie1400fdbdd2e4bd282737fca9a66fd5a_7)

| Net income | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 10,981,201 | | | | | | 10,981,201 | | |

| Issuance of common stock | | | 31,597,695 | | | | | | 665,835 | | | | | | — | | | | | | — | | | | | | — | | | | | | 665,835 | | |

| Repurchases of common stock | | | (86,536,215) | | | | | | — | | | | | | (9,154,855) | | | | | | — | | | | | | — | | | | | | (9,154,855) | | |

| Shares withheld related to net share settlement of equity awards | | | (470,330) | | | | | | — | | | | | | (46,165) | | | | | | — | | | | | | — | | | | | | (46,165) | | |

| Balances as of December 31, 2025 | | | 4,222,162,150 | | | | | | $ | 7,286,410 | | | | | $ | (22,372,658) | | | | | $ | (580,382) | | | | | $ | 42,282,118 | | | | | $ | 26,615,488 | |

[Table of Contents](#ie1400fdbdd2e4bd282737fca9a66fd5a_7)

Stock Split

On November 14, 2025, the Company completed a ten-for-one forward stock split of the Company's issued common stock (the “Stock Split”).

Each shareholder as of the record date of November 10, 2025 received nine additional shares of common stock for every share held.

References made to share or per share amounts in the accompanying consolidated financial statements and applicable disclosures have been retroactively adjusted to reflect the Stock Split.

See Note 10 *Stockholders' Equity* for additional information.

In December 2025, the FASB issued ASU 2025-10, *Government Grants (Topic 832): Accounting for Government Grants Received by Business Entities*, which establishes authoritative guidance on the recognition, measurement, presentation, and disclosure of government grants.

Under ASU 2025-10, government grants are recognized when it is probable that the entity will both comply with the conditions of the grant and the grant will be received.

The ASU provides specific accounting models for grants related to assets and grants related to income, including options to recognize government grants as deferred income or as a reduction of the asset’s cost basis.

The ASU also requires enhanced disclosures regarding the nature of government grants, significant terms and conditions, accounting policies applied, and amounts recognized in the financial statements.

ASU 2025-10 is effective for fiscal years beginning after December 15, 2028, including interim periods within those fiscal years, with early adoption permitted.

In December 2025, the FASB issued ASU 2025-11, *Interim Reporting (Topic 270): Narrow-Scope Improvements*, which clarifies the guidance in Topic 270 to improve the consistency of interim financial reporting.

The ASU provides a comprehensive list of required interim disclosures and introduces a disclosure principle requiring entities to disclose events since the end of the last annual reporting period that have a material impact on the entity.

ASU 2025-11 is effective for fiscal years beginning after December 15, 2027, including interim periods within those fiscal years, with early adoption permitted.

The Company is currently evaluating the impact of adopting ASU 2025-11.

[Table of Contents](#ie1400fdbdd2e4bd282737fca9a66fd5a_7)

prospectively to the current annual period.

Prior period disclosures have not been adjusted to reflect the new disclosure requirements.

[Table of Contents](#ie1400fdbdd2e4bd282737fca9a66fd5a_7)

| January 27, 2025 | | | | | |

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

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

| Basic | | | | | | $ | 20.28 | | | | | $ | 12.25 | | | | | $ | 10.10 | |

| Diluted | | | | | | $ | 19.83 | | | | | $ | 12.03 | | | | | $ | 9.95 | |

| Basic | | | | | | 429,519 | | | | | | 441,571 | | | | | | 444,698 | | |

| Diluted | | | | | | 439,261 | | | | | | 449,498 | | | | | | 451,290 | | |

| Acquisitions | | | | | | — | | | | | | — | | | | | | (757,387) | | |

| Income taxes paid | | | | | | $ | 1,641,530 | | | | | $ | 1,154,973 | | | | | $ | 811,720 | |

| Treasury stock at cost (25,953,460 and 16,078,268 shares at December 31, 2024 and December 31, 2023) | | | | | | (13,171,638) | | | | | | (6,922,200) | | |

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

| Balances as of December 31, 2021 | | | 443,963,107 | | | | | | $ | 4,024,561 | | | | | $ | (824,190) | | | | | $ | (40,495) | | | | | $ | 12,689,372 | | | | | $ | 15,849,248 | |

| Net income | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 4,491,924 | | | | | | 4,491,924 | | |

| Issuance of common stock | | | 1,383,669 | | | | | | 37,588 | | | | | | — | | | | | | — | | | | | | — | | | | | | 37,588 | | |

In November 2023, the FASB issued ASU 2023-07, *Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures*, requiring public entities to disclose information about their reportable segments’ significant expenses and other segment items on an interim and annual basis.

Public entities with a single reportable segment are required to apply the disclosure requirements in ASU 2023-07, as well as all existing segment disclosures and reconciliation requirements in ASC 280 on an interim and annual basis.

are collected from members and remitted to governmental authorities.

Marketing expenses are expensed as incurred and include promotional activities such as digital and television advertising.

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

| Streaming revenues | | | | | | $ | 17,359,369 | | | | | $ | 14,873,783 | | | | | $ | 14,084,643 | |

| Paid net membership additions (losses) | | | | | | 9,497 | | | | | | 5,832 | | | | | | (919) | | |

| Paid memberships at end of period (1) | | | | | | 89,625 | | | | | | 80,128 | | | | | | 74,296 | | |

| Streaming revenues | | | | | | $ | 12,387,035 | | | | | $ | 10,556,487 | | | | | $ | 9,745,015 | |

| Paid net membership additions | | | | | | 12,320 | | | | | | 12,084 | | | | | | 2,693 | | |

| Paid memberships at end of period (1) | | | | | | 101,133 | | | | | | 88,813 | | | | | | 76,729 | | |

Latin America (LATAM)

| Streaming revenues | | | | | | $ | 4,839,816 | | | | | $ | 4,446,461 | | | | | $ | 4,069,973 | |

| Paid net membership additions | | | | | | 7,330 | | | | | | 4,298 | | | | | | 1,738 | | |

| Paid memberships at end of period (1) | | | | | | 53,327 | | | | | | 45,997 | | | | | | 41,699 | | |

Asia-Pacific (APAC)

| Streaming revenues | | | | | | $ | 4,414,746 | | | | | $ | 3,763,727 | | | | | $ | 3,570,221 | |

| Paid net membership additions | | | | | | 12,203 | | | | | | 7,315 | | | | | | 5,391 | | |

| Paid memberships at end of period (1) | | | | | | 57,541 | | | | | | 45,338 | | | | | | 38,023 | | |

(1) A paid membership (also referred to as a paid subscription) is defined as a membership that has the right to receive Netflix service following sign-up and a method of payment being provided, and that is not part of a free trial or certain other promotions that may be offered by the Company to new or rejoining members.

Certain members have the option to add extra member sub accounts.

These extra member sub accounts are not included in paid memberships.

A membership is canceled and ceases to be reflected in the above metrics as of the effective cancellation date.

Voluntary cancellations generally become effective at the end of the prepaid membership period.

Involuntary cancellations, as a result of a failed method of payment, become effective immediately.

Memberships are assigned to territories based on the geographic location used at time of sign-up as determined by the Company’s internal systems, which utilize industry standard geo-location technology.