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

Forward-Looking Statements

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of the federal securities laws. These forward-looking statements include, but are not limited to, statements regarding: our core strategy; our ability to improve our content offerings and service; our future financial performance, including expectations regarding revenues, deferred revenue, operating income and margin, net income, expenses, and profitability; liquidity, including the sufficiency of our capital resources, net cash provided by (used in) operating activities, and access to financing sources; capital allocation strategies, including any stock repurchases or repurchase programs; seasonality; impact of foreign exchange rate fluctuations, including on net income, revenues and average revenues per paying member; expectations regarding hedging activity; impact of interest rate fluctuations; adequacy of existing facilities; future regulatory changes and their impact on our business; intellectual property; price changes and testing; accounting treatment for changes related to content assets; acquisitions; membership growth, including impact of content and pricing changes on membership growth; member viewing patterns; future contractual obligations, including unknown content obligations and timing of payments; our global content and marketing investments, including investments in original programming; content amortization; resolution of tax examinations; tax expense; unrecognized tax benefits; deferred tax assets; and our ability to effectively manage change and growth. These forward-looking statements are subject to risks and uncertainties that could cause actual results and events to differ materially from those included in forward-looking statements. Factors that might cause or contribute to such differences include, but are not limited to, those discussed in our Annual Report on Form 10-K for the year ended December 31, 2023 filed with the Securities and Exchange Commission (“SEC”) on January 26, 2024, in particular the risk factors discussed under the heading “Risk Factors” in Part I, Item 1A.

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

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

post on social media and blogs could be deemed to be material information. Therefore, we encourage investors, the media, and others interested in our company to review the information we post on the social media channels and blogs listed on our investor relations website.

Overview

We are one of the world’s leading entertainment services with over 277 million paid memberships in over 190 countries enjoying TV series, films and games across a wide variety of genres and languages. Members can play, pause and resume watching as much as they want, anytime, anywhere, and can change their plans at any time.

Our core strategy is to grow our business globally within the parameters of our operating margin target. We strive to continuously improve our members’ experience by offering compelling content that delights them and attracts new members. We seek to drive conversation around our content to further enhance member joy, and we are continuously enhancing our user interface to help our members more easily choose content that they will find enjoyable.

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.

Results of Operations

The following represents our consolidated performance highlights:

			As of/Three Months Ended												Change
			June 30, 2024						June 30, 2023						Q2'24 vs. Q2'23
			(in thousands, except revenue per membership and percentages)
Financial Results:
Streaming revenues			$	9,559,310					$	8,158,326					$	1,400,984					17		%
DVD revenues (1)			—						28,975						(28,975)						(100)		%
Total revenues			$	9,559,310					$	8,187,301					$	1,372,009					17		%
Operating income			$	2,602,837					$	1,827,183					$	775,654					42		%
Operating margin			27		%				22		%				5		%
Global Streaming Memberships:
Paid net membership additions			8,045						5,892						2,153						37		%
Paid memberships at end of period			277,647						238,390						39,257						16		%
Average paying memberships			273,625						235,444						38,181						16		%
Average monthly revenue per paying membership			$	11.65					$	11.55					$	0.10					1		%
Constant currency change (2)																					5		%

(1) We discontinued our DVD-by-mail service in September 2023. The discontinuance of our DVD business had an immaterial impact on our operations and financial results.

(2) We believe the non-GAAP financial measure of constant currency revenue is useful in analyzing the underlying trends in average monthly revenue per paying membership (“ARM”) absent foreign currency fluctuations. However, this non-GAAP financial measure should be considered in addition to, not as a substitute for, or superior to other financial measures prepared in accordance with GAAP.

In order to exclude the effect of foreign currency rate fluctuations on ARM, 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 ARM is calculated as the percentage change between current period constant currency ARM and the prior comparative period ARM. The impact of hedging gains or losses is excluded from both the current and prior periods. For the three and six months ended June 30, 2024, our revenues would have been approximately $430 million and $701 million higher, respectively, excluding the impact of hedging and had foreign currency exchange rates remained constant with those for the three and six months ended June 30, 2023.

Operating margin for the three months ended June 30, 2024 increased five percentage points as compared to the prior comparative period, primarily due to revenues growing at a faster rate as compared to the growth in cost of revenues, marketing expenses, general and administrative expenses, and technology and development expenses.

Streaming Revenues

We primarily derive revenues from monthly membership fees for services related to streaming content to our members. We offer a variety of streaming membership plans, the price of which varies by country and the features of the plan. As of June 30, 2024, pricing on our paid plans ranged from the U.S. dollar equivalent of $1 to $31 per month, and pricing on our extra member sub accounts ranged from the U.S. dollar equivalent of $2 to $8 per month. We expect that from time to time the prices of our membership plans in each country may change and we may test other plan and price variations.

We also earn revenue from advertisements presented on our streaming service, consumer products, live events and various other sources. Revenues earned from sources other than monthly membership fees were not material for the three and six months ended June 30, 2024 and June 30, 2023.

Three months ended June 30, 2024 as compared to the three months ended June 30, 2023

						Three Months Ended												Change
						June 30, 2024						June 30, 2023						Q2'24 vs. Q2'23
						(in thousands, except percentages)
Streaming revenues						$	9,559,310					$	8,158,326					$	1,400,984					17		%

Six months ended June 30, 2024 as compared to the six months ended June 30, 2023

						Six Months Ended												Change
						June 30, 2024						June 30, 2023						YTD'24 vs. YTD'23
						(in thousands, except percentages)
Streaming revenues						$	18,929,750					$	16,288,327					$	2,641,423					16		%

Streaming revenues for the three and six months ended June 30, 2024 increased 17% and 16% as compared to the three and six months ended June 30, 2023, respectively, primarily due to the growth in average paying memberships and price increases, partially offset by unfavorable changes in foreign exchange rates.

The following tables summarize streaming revenue and other streaming membership information by region for the three and six months ended June 30, 2024 and 2023. Hedging gains of $33 million and $22 million are included in “Streaming revenues” for the three and six months ended June 30, 2024, respectively. No hedging gains and losses were recognized as “Streaming revenues” in the comparative prior year period. See Note 7 Derivative Financial Instruments and Hedging Activities to the consolidated financial statements for further information regarding the Company’s derivative and non-derivative financial instruments.

United States and Canada (UCAN)

Three months ended June 30, 2024 as compared to the three months ended June 30, 2023

						As of/Three Months Ended												Change
						June 30, 2024						June 30, 2023						Q2'24 vs. Q2'23
						(in thousands, except revenue per membership and percentages)
Streaming revenues						$	4,295,560					$	3,599,448					$	696,112					19		%
Paid net membership additions						1,451						1,173						278						24		%
Paid memberships at end of period						84,109						75,571						8,538						11		%
Average paying memberships						83,384						74,985						8,399						11		%
Average monthly revenue per paying membership						$	17.17					$	16.00					$	1.17					7		%
Constant currency change																								7		%

Six months ended June 30, 2024 as compared to the six months ended June 30, 2023

						As of/Six Months Ended												Change
						June 30, 2024						June 30, 2023						YTD'24 vs. YTD'23
						(in thousands, except revenue per membership and percentages)
Streaming revenues						$	8,519,875					$	7,208,093					$	1,311,782					18		%
Paid net membership additions						3,981						1,275						2,706						212		%
Paid memberships at end of period						84,109						75,571						8,538						11		%
Average paying memberships						82,389						74,666						7,723						10		%
Average monthly revenue per paying membership						$	17.24					$	16.09					$	1.15					7		%
Constant currency change																								7		%

Europe, Middle East, and Africa (EMEA)

Three months ended June 30, 2024 as compared to the three months ended June 30, 2023

						As of/Three Months Ended												Change
						June 30, 2024						June 30, 2023						Q2'24 vs. Q2'23
						(in thousands, except revenue per membership and percentages)
Streaming revenues						$	3,007,772					$	2,562,170					$	445,602					17		%
Paid net membership additions						2,235						2,434						(199)						(8)		%
Paid memberships at end of period						93,964						79,807						14,157						18		%
Average paying memberships						92,847						78,590						14,257						18		%
Average monthly revenue per paying membership						$	10.80					$	10.87					$	(0.07)					(1)		%
Constant currency change																								1		%

Six months ended June 30, 2024 as compared to the six months ended June 30, 2023

						As of/Six Months Ended												Change
						June 30, 2024						June 30, 2023						YTD'24 vs. YTD'23
						(in thousands, except revenue per membership and percentages)
Streaming revenues						$	5,965,965					$	5,079,811					$	886,154					17		%
Paid net membership additions						5,151						3,078						2,073						67		%
Paid memberships at end of period						93,964						79,807						14,157						18		%
Average paying memberships						91,559						77,821						13,738						18		%
Average monthly revenue per paying membership						$	10.86					$	10.88					$	(0.02)					—		%
Constant currency change																								—		%

Latin America (LATAM)

Three months ended June 30, 2024 as compared to the three months ended June 30, 2023

						As of/Three Months Ended												Change
						June 30, 2024						June 30, 2023						Q2'24 vs. Q2'23
						(in thousands, except revenue per membership and percentages)
Streaming revenues						$	1,204,145					$	1,077,435					$	126,710					12		%
Paid net membership additions						1,530						1,217						313						26		%
Paid memberships at end of period						49,250						42,466						6,784						16		%
Average paying memberships						48,485						41,858						6,627						16		%
Average monthly revenue per paying membership						$	8.28					$	8.58					$	(0.30)					(3)		%
Constant currency change																								24		%

Six months ended June 30, 2024 as compared to the six months ended June 30, 2023

						As of/Six Months Ended												Change
						June 30, 2024						June 30, 2023						YTD'24 vs. YTD'23
						(in thousands, except revenue per membership and percentages)
Streaming revenues						$	2,369,153					$	2,147,627					$	221,526					10		%
Paid net membership additions						3,253						767						2,486						324		%
Paid memberships at end of period						49,250						42,466						6,784						16		%
Average paying memberships						47,672						41,666						6,006						14		%
Average monthly revenue per paying membership						$	8.28					$	8.59					$	(0.31)					(4)		%
Constant currency change																								20		%

Asia-Pacific (APAC)

Three months ended June 30, 2024 as compared to the three months ended June 30, 2023

						As of/Three Months Ended												Change
						June 30, 2024						June 30, 2023						Q2'24 vs. Q2'23
						(in thousands, except revenue per membership and percentages)
Streaming revenues						$	1,051,833					$	919,273					$	132,560					14		%
Paid net membership additions						2,829						1,068						1,761						165		%
Paid memberships at end of period						50,324						40,546						9,778						24		%
Average paying memberships						48,910						40,012						8,898						22		%
Average monthly revenue per paying membership						$	7.17					$	7.66					$	(0.49)					(6)		%
Constant currency change																								(3)		%

Six months ended June 30, 2024 as compared to the six months ended June 30, 2023

						As of/Six Months Ended												Change
						June 30, 2024						June 30, 2023						YTD'24 vs. YTD'23
						(in thousands, except revenue per membership and percentages)
Streaming revenues						$	2,074,757					$	1,852,796					$	221,961					12		%
Paid net membership additions						4,986						2,523						2,463						98		%
Paid memberships at end of period						50,324						40,546						9,778						24		%
Average paying memberships						47,664						39,382						8,282						21		%
Average monthly revenue per paying membership						$	7.25					$	7.84					$	(0.59)					(8)		%
Constant currency change																								(4)		%

Cost of Revenues

Amortization of content assets makes up the majority of cost of revenues. Expenses associated with the acquisition, licensing and production of content (such as payroll, stock-based compensation, facilities, and other related personnel expenses, costs associated with

obtaining rights to music included in our content, overall deals with talent, miscellaneous production related costs and participations and residuals), streaming delivery costs and other operations costs make up the remainder of cost of revenues. We have built our own global content delivery network (“Open Connect”) to help us efficiently stream a high volume of content to our members over the internet. Delivery expenses, therefore, include equipment costs related to Open Connect, payroll and related personnel expenses and all third-party costs, such as cloud computing costs, associated with delivering content over the internet. Other operations costs include customer service and payment processing fees, including those we pay to our integrated payment partners, as well as other costs incurred in making our content available to members.

Three months ended June 30, 2024 as compared to the three months ended June 30, 2023

			Three Months Ended												Change
			June 30, 2024						June 30, 2023						Q2'24 vs. Q2'23
			(in thousands, except percentages)
Cost of revenues			$	5,174,143					$	4,673,470					$	500,673					11		%
As a percentage of revenues			54		%				57		%

The increase in cost of revenues was primarily due to a $360 million increase in content amortization relating to our existing and new content.

Six months ended June 30, 2024 as compared to the six months ended June 30, 2023

			Six Months Ended												Change
			June 30, 2024						June 30, 2023						YTD'24 vs. YTD'23
			(in thousands, except percentages)
Cost of revenues			$	10,151,216					$	9,477,095					$	674,121					7		%
As a percentage of revenues			54		%				58		%

The increase in cost of revenues was primarily due to a $570 million increase in content amortization relating to our existing and new content.

Marketing

Marketing expenses consist primarily of advertising expenses and certain payments made to our marketing and advertising sales partners, including consumer electronics (“CE”) manufacturers, multichannel video programming distributors (“MVPDs”), mobile operators, and internet service providers (“ISPs”). Advertising expenses include promotional activities such as digital and television advertising. Marketing expenses also include payroll, stock-based compensation, facilities, and other related expenses for personnel that support sales and marketing activities.

Three months ended June 30, 2024 as compared to the three months ended June 30, 2023

			Three Months Ended												Change
			June 30, 2024						June 30, 2023						Q2'24 vs. Q2'23
			(in thousands, except percentages)
Marketing			$	644,084					$	627,168					$	16,916					3		%
As a percentage of revenues			7		%				8		%

The increase in marketing expenses was primarily due to a $27 million increase in personnel-related costs, partially offset by a $17 million decrease in advertising expenses due to the timing of content releases.

Six months ended June 30, 2024 as compared to the six months ended June 30, 2023

			Six Months Ended												Change
			June 30, 2024						June 30, 2023						YTD'24 vs. YTD'23
			(in thousands, except percentages)
Marketing			$	1,298,424					$	1,182,530					$	115,894					10		%
As a percentage of revenues			7		%				7		%

The increase in marketing expenses was primarily due to a $54 million increase in personnel-related costs, coupled with a $48 million increase in advertising expenses due to the timing of content releases.

Technology and Development

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

Three months ended June 30, 2024 as compared to the three months ended June 30, 2023

			Three Months Ended												Change
			June 30, 2024						June 30, 2023						Q2'24 vs. Q2'23
			(in thousands, except percentages)
Technology and development			$	711,254					$	657,983					$	53,271					8		%
As a percentage of revenues			7		%				8		%

The increase in technology and development expenses was primarily due to a $43 million increase in personnel-related costs, coupled with an increase in infrastructure and general use computer hardware expenses.

Six months ended June 30, 2024 as compared to the six months ended June 30, 2023

			Six Months Ended												Change
			June 30, 2024						June 30, 2023						YTD'24 vs. YTD'23
			(in thousands, except percentages)
Technology and development			$	1,413,727					$	1,345,258					$	68,469					5		%
As a percentage of revenues			7		%				8		%

The increase in technology and development expenses was primarily due to a $52 million increase in personnel-related costs, coupled with an increase in infrastructure and general use computer hardware expenses.

General and Administrative

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

Three months ended June 30, 2024 as compared to the three months ended June 30, 2023

			Three Months Ended												Change
			June 30, 2024						June 30, 2023						Q2'24 vs. Q2'23
			(in thousands, except percentages)
General and administrative			$	426,992					$	401,497					$	25,495					6		%
As a percentage of revenues			4		%				5		%

The increase in general and administrative expenses was primarily due to a $9 million increase in personnel-related costs as well as increased spend on other corporate expenses.

Six months ended June 30, 2024 as compared to the six months ended June 30, 2023

			Six Months Ended												Change
			June 30, 2024						June 30, 2023						YTD'24 vs. YTD'23
			(in thousands, except percentages)
General and administrative			$	831,012					$	802,421					$	28,591					4		%
As a percentage of revenues			4		%				5		%

The increase in general and administrative expenses was primarily due to an $11 million increase in personnel-related costs as well as increased spend on other corporate expenses.

Interest Expense

Interest expense consists primarily of the interest associated with our outstanding debt obligations, including the amortization of debt issuance costs. See Note 6 Debt in the accompanying notes to our consolidated financial statements for further detail on our debt obligations.

Three months ended June 30, 2024 as compared to the three months ended June 30, 2023

						Three Months Ended												Change
						June 30, 2024						June 30, 2023						Q2'24 vs. Q2'23
						(in thousands, except percentages)
Interest expense						$	167,986					$	174,812					$	(6,826)					(4)		%
As a percentage of revenues						2		%				2		%

Six months ended June 30, 2024 as compared to the six months ended June 30, 2023

						Six Months Ended												Change
						June 30, 2024						June 30, 2023						YTD'24 vs. YTD'23
						(in thousands, except percentages)
Interest expense						$	341,300					$	349,051					$	(7,751)					(2)		%
As a percentage of revenues						2		%				2		%

Interest expense primarily consists of interest on our Notes of $168 million and $341 million for the three and six months ended June 30, 2024. The decrease in interest expense for the three and six months ended June 30, 2024 as compared to the three and six months ended June 30, 2023 was due to the lower average aggregate principal of interest bearing notes outstanding.

Interest and Other Income (Expense)

Interest and other income (expense) consists primarily of foreign exchange gains and losses on foreign currency denominated balances and interest earned on cash, cash equivalents and short-term investments.

Three months ended June 30, 2024 as compared to the three months ended June 30, 2023

						Three Months Ended												Change
						June 30, 2024						June 30, 2023						Q2'24 vs. Q2'23
						(in thousands, except percentages)
Interest and other income						$	79,005					$	26,961					$	52,044					193		%
As a percentage of revenues						1		%				—		%

Six months ended June 30, 2024 as compared to the six months ended June 30, 2023

						Six Months Ended												Change
						June 30, 2024						June 30, 2023						YTD'24 vs. YTD'23
						(in thousands, except percentages)
Interest and other income (expense)						$	234,364					$	(44,243)					$	278,607					630		%
As a percentage of revenues						1		%				—		%

Interest and other income (expense) increased in the three and six months ended June 30, 2024 primarily due to foreign exchange gains of $21 million and $115 million, respectively, compared to losses of $23 million and $130 million, respectively, for the corresponding periods in 2023. In the three months ended June 30, 2024, the foreign exchange gains were primarily driven by the non-cash gain of $43 million from the remeasurement of our €5,170 million Senior Notes, partially offset by the remeasurement of cash and content liability positions in currencies other than the functional currencies. In the six months ended June 30, 2024, the foreign exchange gains were primarily driven by the non-cash gain of $173 million from the remeasurement of our €5,170 million Senior Notes, partially offset by the remeasurement of cash and content liability positions in currencies other than the functional currencies. In the three months ended June 30, 2023, the foreign exchange losses were primarily driven by the non-cash losses of $29 million from the remeasurement of our €5,170 million Senior Notes, partially offset by the remeasurement of cash and content liability positions in currencies other than the functional currencies. In the six months ended June 30, 2023, the foreign exchange losses were primarily driven by the non-cash losses of $110 million from the remeasurement of our €5,170 million Senior Notes, coupled with the remeasurement of cash and content liability positions in currencies other than the functional currencies.

Provision for Income Taxes

Three months ended June 30, 2024 as compared to the three months ended June 30, 2023

						Three Months Ended												Change
						June 30, 2024						June 30, 2023						Q2'24 vs. Q2'23
						(in thousands, except percentages)
Provision for income taxes						$	366,550					$	191,722					$	174,828		91		%
Effective tax rate						15		%				11		%

Six months ended June 30, 2024 as compared to the six months ended June 30, 2023

						Six Months Ended												Change
						June 30, 2024						June 30, 2023						YTD'24 vs. YTD'23
						(in thousands, except percentages)
Provision for income taxes						$	648,920					$	355,476					$	293,444		83		%
Effective tax rate						13		%				11		%

The increase in the effective tax rate for the three and six months ended June 30, 2024, as compared to the same periods in 2023, was primarily due to an increase in foreign taxes, partially offset by higher excess tax benefits on stock-based compensation.

Liquidity and Capital Resources

			As of												Change
			June 30, 2024						December 31, 2023						June 30, 2024 vs. December 31, 2023
			(in thousands, except percentages)
Cash, cash equivalents, restricted cash and short-term investments			$	6,658,018					$	7,139,488					$	(481,470)					(7)		%
Short-term and long-term debt			13,980,065						14,543,261						(563,196)						(4)		%

Cash, cash equivalents, restricted cash and short-term investments decreased $481 million in the six months ended June 30, 2024 primarily due to the repurchase of stock and repayment of debt, partially offset by cash provided by operations and proceeds from issuance of common stock.

Debt, net of debt issuance costs, decreased $563 million primarily due to the repayment upon maturity of the $400 million aggregate principal amount of our 5.750% Senior Notes in the six months ended June 30, 2024, coupled with the remeasurement of our euro-denominated notes. The amount of principal and interest on our outstanding notes due in the next twelve months is $2,430 million. As of June 30, 2024, no amounts had been borrowed under the $3 billion Revolving Credit Agreement. See Note 6 Debt in the accompanying notes to our consolidated financial statements.

We anticipate that we may periodically raise additional debt capital. Our ability to obtain this or any additional financing that we may choose or need, including for the refinancing of upcoming maturities or potential strategic acquisitions and investments, will depend on, among other things, our development efforts, business plans, operating performance and the condition of the capital markets at the time we seek financing. We may not be able to obtain such financing on terms acceptable to us or at all. If we raise additional funds through the issuance of equity or debt securities, those securities may have rights, preferences or privileges senior to the rights of our common stock, and our stockholders may experience dilution.

In March 2021, our Board of Directors authorized the repurchase of up to $5 billion of our common stock, with no expiration date, and in September 2023, the Board of Directors increased the share repurchase authorization by an additional $10 billion, also with no expiration date. Stock repurchases may be effected through open market repurchases in compliance with Rule 10b-18 under the Exchange Act, including through the use of trading plans intended to qualify under Rule 10b5-1 under the Exchange Act, privately-negotiated transactions, accelerated stock repurchase plans, block purchases, or other similar purchase techniques and in such amounts as management deems appropriate. We are not obligated to repurchase any specific number of shares, and the timing and actual number of shares repurchased will depend on a variety of factors, including our stock price, general economic, business and market conditions, and alternative investment opportunities. We may discontinue any repurchases of our common stock at any time without prior notice. During the six months ended June 30, 2024, the Company repurchased 6,145,069 shares of common stock for an aggregate amount of $3.6 billion. As of June 30, 2024, $4.8 billion remains available for repurchases.

Our primary uses of cash include the acquisition, licensing and production of content, marketing programs, streaming delivery and personnel-related costs, as well as strategic acquisitions and investments. Cash payment terms for non-original content have historically been in line with the amortization period. Investments in original content, and in particular content that we produce and own, require more cash upfront relative to licensed content. For example, production costs are paid as the content is created, well in advance of when the content is available on the service and amortized. We expect to continue to significantly invest in global content, particularly in original content, which will impact our liquidity. We currently anticipate that cash flows from operations, available funds and access to financing sources, including our revolving credit facility, will continue to be sufficient to meet our cash needs for the next twelve months and beyond.

Our material cash requirements from known contractual and other obligations primarily relate to our content, debt and lease obligations. As of June 30, 2024, the expected timing of those payments are as follows:

						Payments due by Period
Contractual obligations (in thousands):						Total						Next 12 Months						Beyond 12 Months
Content obligations (1)						$	23,309,602					$	11,456,834					$	11,852,768
Debt (2)						16,769,794						2,429,714						14,340,080
Operating lease obligations (3)						2,955,264						500,444						2,454,820
Total						$	43,034,660					$	14,386,992					$	28,647,668

(1)As of June 30, 2024, content obligations were comprised of $4.4 billion included in “Current content liabilities” and $2.0 billion of “Non-current content liabilities” on the Consolidated Balance Sheets and $16.9 billion of obligations that are not reflected on the Consolidated Balance Sheets as they did not then meet the criteria for recognition.

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

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

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

Cash Flows

The following tables summarize our cash flows:

Three months ended June 30, 2024 as compared to the three months ended June 30, 2023

			Three Months Ended												Change
			June 30, 2024						June 30, 2023						Q2'24 vs. Q2'23
			(in thousands, except percentages)
Net cash provided by operating activities			$	1,290,847					$	1,440,232					$	(149,385)					(10)		%
Net cash provided by (used in) investing activities			(78,287)						97,737						(176,024)						(180)		%
Net cash used in financing activities			(1,489,381)						(649,349)						840,032						129		%

Net cash provided by operating activities for the three months ended June 30, 2024 decreased $149 million as compared to the corresponding period in 2023, primarily driven by a $779 million or 21% increase in payments for content assets and unfavorable changes in working capital, partially offset by a $660 million or 44% increase in net income and adjustments for non-cash expenses.

Net cash provided by (used in) investing activities for the three months ended June 30, 2024 decreased $176 million as compared to the corresponding period in 2023, primarily due to there being no proceeds or purchases of short-term investments in the three months ended June 30, 2024, as compared to proceeds from maturities of short-term investments of $502 million and purchases of short-term investments of $303 million in the three months ended June 30, 2023.

Net cash used in financing activities for the three months ended June 30, 2024 increased $840 million as compared to the corresponding period in 2023, primarily due to repurchases of common stock for an aggregate amount of $1.6 billion in the three months ended June 30, 2024 as compared to repurchases of common stock for an aggregate amount of $645 million in the three months ended June 30, 2023, partially offset by an $84 million increase in proceeds from the issuance of common stock due to an increase in employee stock options exercised in the three months ended June 30, 2024 as compared to the corresponding period in 2023.

Six months ended June 30, 2024 as compared to the six months ended June 30, 2023

			Six Months Ended												Change
			June 30, 2024						June 30, 2023						YTD'24 vs. YTD'23
			(in thousands, except percentages)
Net cash provided by operating activities			$	3,503,369					$	3,618,972					$	(115,603)					(3)		%
Net cash used in investing activities			(154,001)						(165,916)						(11,915)						(7)		%
Net cash used in financing activities			(3,622,325)						(1,023,422)						2,598,903						254		%

Net cash provided by operating activities for the six months ended June 30, 2024 decreased $116 million as compared to the corresponding period in 2023, primarily driven by a $1,883 million or 29% increase in payments for content assets and unfavorable changes in working capital, partially offset by a $1,687 million or 60% increase in net income and adjustments for non-cash expenses.

Net cash used in investing activities for the six months ended June 30, 2024 decreased $12 million as compared to the corresponding period in 2023, primarily due to decreased purchases of property and equipment, coupled with there being no purchases or maturities of short-term investments in the six months ended June 30, 2024, as compared to purchases of short-term investments of $505 million and maturities of short-term investments of $502 million in the six months ended June 30, 2023.

Net cash used in financing activities for the six months ended June 30, 2024 increased $2,599 million as compared to the corresponding period in 2023, primarily due to repurchases of common stock for an aggregate amount of $3.6 billion in the six months ended June 30, 2024 as compared to repurchases of common stock for an aggregate amount of $1.0 billion in the six months ended June 30, 2023, coupled with the repayment upon maturity of the $400 million aggregate principal amount of our 5.750% Senior Notes in the six months ended June 30, 2024 as compared to no repayments of debt in the corresponding period in 2023. The increase in net cash used in financing activities was partially offset by the $327 million increase in proceeds from the issuance of common stock in the six months ended June 30, 2024 as compared to the corresponding period in 2023, due to an increase in employee stock options exercised.

Indemnification

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

Critical Accounting Estimates

The preparation of financial statements and related disclosures in conformity with U.S. generally accepted accounting principles and the Company’s discussion and analysis of its financial condition and operating results require the Company’s management to make judgments, assumptions and estimates that affect the amounts reported. Note 1, “Basis of Presentation and Summary of Significant Accounting Policies” of the Notes to consolidated Financial Statements in Part I, Item 1 of this Form 10-Q and in the Notes to Consolidated Financial Statements in Part II, Item 8 of our Annual Report on Form 10-K for the year ended December 31, 2023, describe the significant accounting policies and methods used in the preparation of the Company’s consolidated financial statements. There have been no material changes to the Company’s critical accounting estimates included in our Annual Report on Form 10-K for the year ended December 31, 2023.