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Cover and table of contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2025
OR
☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission File Number: 001-35727
Netflix, Inc.
(Exact name of Registrant as specified in its charter)
| Delaware | 77-0467272 | ||||||||||
| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification Number) | ||||||||||
| 121 Albright Way, | Los Gatos, | California | 95032 | ||||||||
| (Address of principal executive offices) | (Zip Code) |
(408) 540-3700
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||
| Common stock, par value $0.001 per share | NFLX | NASDAQ Global Select Market |
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large Accelerated Filer | ☒ | Accelerated filer | ☐ | |||||||||||
| Non-accelerated filer | ☐ | Smaller reporting company | ☐ | |||||||||||
| Emerging growth company | ☐ |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined by Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
As of June 30, 2025, there were 424,926,346 shares of the registrant’s common stock, par value $0.001, outstanding.
Table of Contents
NETFLIX, INC.
Consolidated Statements of Operations
(unaudited)
(in thousands, except per share data)
| Three Months Ended | Six Months Ended | ||||||||||||||||||||||
| June 30, 2025 | June 30, 2024 | June 30, 2025 | June 30, 2024 | ||||||||||||||||||||
| Revenues | $ | 11,079,166 | $ | 9,559,310 | $ | 21,621,967 | $ | 18,929,750 | |||||||||||||||
| Cost of revenues | 5,325,311 | 5,174,143 | 10,588,458 | 10,151,216 | |||||||||||||||||||
| Sales and marketing | 713,265 | 644,084 | 1,401,635 | 1,298,424 | |||||||||||||||||||
| Technology and development | 824,683 | 711,254 | 1,647,506 | 1,413,727 | |||||||||||||||||||
| General and administrative | 441,213 | 426,992 | 862,675 | 831,012 | |||||||||||||||||||
| Operating income | 3,774,694 | 2,602,837 | 7,121,693 | 5,235,371 | |||||||||||||||||||
| Other income (expense): | |||||||||||||||||||||||
| Interest expense | (182,649) | (167,986) | (366,821) | (341,300) | |||||||||||||||||||
| Interest and other income (expense) | 39,630 | 79,005 | 90,529 | 234,364 | |||||||||||||||||||
| Income before income taxes | 3,631,675 | 2,513,856 | 6,845,401 | 5,128,435 | |||||||||||||||||||
| Provision for income taxes | (506,262) | (366,550) | (829,637) | (648,920) | |||||||||||||||||||
| Net income | $ | 3,125,413 | $ | 2,147,306 | $ | 6,015,764 | $ | 4,479,515 | |||||||||||||||
| Earnings per share: | |||||||||||||||||||||||
| Basic | $ | 7.35 | $ | 4.99 | $ | 14.11 | $ | 10.39 | |||||||||||||||
| Diluted | $ | 7.19 | $ | 4.88 | $ | 13.80 | $ | 10.16 | |||||||||||||||
| Weighted-average shares of common stock outstanding: | |||||||||||||||||||||||
| Basic | 425,211 | 430,065 | 426,235 | 431,078 | |||||||||||||||||||
| Diluted | 434,883 | 439,739 | 435,917 | 440,697 |
See accompanying notes to the consolidated financial statements.
NETFLIX, INC.
Consolidated Statements of Comprehensive Income
(unaudited)
(in thousands)
| Three Months Ended | Six Months Ended | ||||||||||||||||||||||
| June 30, 2025 | June 30, 2024 | June 30, 2025 | June 30, 2024 | ||||||||||||||||||||
| Net income | $ | 3,125,413 | $ | 2,147,306 | $ | 6,015,764 | $ | 4,479,515 | |||||||||||||||
| Other comprehensive income (loss): | |||||||||||||||||||||||
| Foreign currency translation adjustments, net of income tax benefit of $21 million, $1 million, $32 million, and $1 million, respectively | 97,341 | (75,246) | 154,256 | (148,298) | |||||||||||||||||||
| Net change in unrealized gains (losses) on available-for-sale securities, net of income tax benefit of $0.2 million, $0, $1 million, and $0, respectively | (699) | — | (2,511) | — | |||||||||||||||||||
| Cash flow hedges: | |||||||||||||||||||||||
| Net unrealized gains (losses) | (941,572) | 123,733 | (1,316,744) | 300,337 | |||||||||||||||||||
| Reclassification of net (gains) losses included in net income | 28,537 | (25,722) | (96,624) | (17,208) | |||||||||||||||||||
| Net change, net of income tax benefit (expense) of $272 million, $(29) million, $421 million, and $(84) million, respectively | (913,035) | 98,011 | (1,413,368) | 283,129 | |||||||||||||||||||
| Fair value hedges: | |||||||||||||||||||||||
| Net change in unrealized gains (losses) excluded from the assessment of effectiveness, net of income tax benefit of $1 million, $0, $2 million, and $0, respectively | (2,540) | — | (5,207) | — | |||||||||||||||||||
| Total other comprehensive income (loss) | (818,933) | 22,765 | (1,266,830) | 134,831 | |||||||||||||||||||
| Comprehensive income | $ | 2,306,480 | $ | 2,170,071 | $ | 4,748,934 | $ | 4,614,346 |
See accompanying notes to the consolidated financial statements.
NETFLIX, INC.
Consolidated Statements of Cash Flows
(unaudited)
(in thousands)
| Three Months Ended | Six Months Ended | ||||||||||||||||||||||
| June 30, 2025 | June 30, 2024 | June 30, 2025 | June 30, 2024 | ||||||||||||||||||||
| Cash flows from operating activities: | |||||||||||||||||||||||
| Net income | $ | 3,125,413 | $ | 2,147,306 | $ | 6,015,764 | $ | 4,479,515 | |||||||||||||||
| Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||||||||||||||
| Additions to content assets | (3,835,813) | (4,048,852) | (7,385,470) | (7,777,819) | |||||||||||||||||||
| Change in content liabilities | (214,052) | (366,572) | (625,305) | (556,013) | |||||||||||||||||||
| Amortization of content assets | 3,832,074 | 3,769,690 | 7,655,186 | 7,440,495 | |||||||||||||||||||
| Depreciation and amortization of property, equipment and intangibles | 80,013 | 81,227 | 160,080 | 168,461 | |||||||||||||||||||
| Stock-based compensation expense | 80,862 | 68,766 | 152,839 | 145,111 | |||||||||||||||||||
| Foreign currency remeasurement loss (gain) on debt | 55,238 | (42,692) | 83,785 | (173,493) | |||||||||||||||||||
| Other non-cash items | 120,139 | 138,588 | 234,869 | 235,769 | |||||||||||||||||||
| Deferred income taxes | (135,755) | (209,387) | (299,683) | (316,464) | |||||||||||||||||||
| Changes in operating assets and liabilities: | |||||||||||||||||||||||
| Other current assets | (176,683) | (28,959) | (308,050) | 9,090 | |||||||||||||||||||
| Accounts payable | 11,046 | (19,358) | (265,380) | (164,623) | |||||||||||||||||||
| Accrued expenses and other liabilities | (267,235) | (114,303) | 39,178 | 137,479 | |||||||||||||||||||
| Deferred revenue | 118,635 | 4,236 | 207,548 | 30,751 | |||||||||||||||||||
| Other non-current assets and liabilities | (370,624) | (88,843) | (452,904) | (154,890) | |||||||||||||||||||
| Net cash provided by operating activities | 2,423,258 | 1,290,847 | 5,212,457 | 3,503,369 | |||||||||||||||||||
| Cash flows from investing activities: | |||||||||||||||||||||||
| Purchases of property and equipment | (155,889) | (78,287) | (284,166) | (154,001) | |||||||||||||||||||
| Purchases of investments | (1,650) | — | (157,665) | — | |||||||||||||||||||
| Proceeds from maturities and sales of investments | 962,413 | — | 1,732,367 | — | |||||||||||||||||||
| Other investing activities | (36,190) | — | (36,190) | — | |||||||||||||||||||
| Net cash provided by (used in) investing activities | 768,684 | (78,287) | 1,254,346 | (154,001) | |||||||||||||||||||
| Cash flows from financing activities: | |||||||||||||||||||||||
| Repayments of debt | (1,033,450) | — | (1,833,450) | (400,000) | |||||||||||||||||||
| Proceeds from issuance of common stock | 169,066 | 118,750 | 520,668 | 387,631 | |||||||||||||||||||
| Repurchases of common stock | (1,654,327) | (1,599,998) | (5,190,723) | (3,599,998) | |||||||||||||||||||
| Taxes paid related to net share settlement of equity awards | (6,114) | (1,883) | (33,984) | (3,708) | |||||||||||||||||||
| Other financing activities | 21,957 | (6,250) | 6,305 | (6,250) | |||||||||||||||||||
| Net cash used in financing activities | (2,502,868) | (1,489,381) | (6,531,184) | (3,622,325) | |||||||||||||||||||
| Effect of exchange rate changes on cash, cash equivalents and restricted cash | 287,471 | (122,723) | 437,617 | (218,513) | |||||||||||||||||||
| Net increase (decrease) in cash, cash equivalents and restricted cash | 976,545 | (399,544) | 373,236 | (491,470) | |||||||||||||||||||
| Cash, cash equivalents and restricted cash at beginning of period | 7,204,028 | 7,026,589 | 7,807,337 | 7,118,515 | |||||||||||||||||||
| Cash, cash equivalents and restricted cash at end of period | $ | 8,180,573 | $ | 6,627,045 | $ | 8,180,573 | $ | 6,627,045 |
See accompanying notes to the consolidated financial statements.
NETFLIX, INC.
Consolidated Balance Sheets
(in thousands, except share and par value data)
| As of | |||||||||||
| June 30, 2025 | December 31, 2024 | ||||||||||
| (unaudited) | |||||||||||
| Assets | |||||||||||
| Current assets: | |||||||||||
| Cash and cash equivalents | $ | 8,177,405 | $ | 7,804,733 | |||||||
| Short-term investments | 213,115 | 1,779,006 | |||||||||
| Other current assets | 3,602,586 | 3,516,640 | |||||||||
| Total current assets | 11,993,106 | 13,100,379 | |||||||||
| Content assets, net | 32,089,394 | 32,452,462 | |||||||||
| Property and equipment, net | 1,743,566 | 1,593,756 | |||||||||
| Other non-current assets | 7,273,598 | 6,483,777 | |||||||||
| Total assets | $ | 53,099,664 | $ | 53,630,374 | |||||||
| Liabilities and Stockholders’ Equity | |||||||||||
| Current liabilities: | |||||||||||
| Current content liabilities | $ | 4,091,770 | $ | 4,393,681 | |||||||
| Accounts payable | 632,718 | 899,909 | |||||||||
| Accrued expenses and other liabilities | 2,489,486 | 2,156,544 | |||||||||
| Deferred revenue | 1,728,361 | 1,520,813 | |||||||||
| Short-term debt | — | 1,784,453 | |||||||||
| Total current liabilities | 8,942,335 | 10,755,400 | |||||||||
| Non-current content liabilities | 1,606,404 | 1,780,806 | |||||||||
| Long-term debt | 14,453,206 | 13,798,351 | |||||||||
| Other non-current liabilities | 3,145,820 | 2,552,250 | |||||||||
| Total liabilities | 28,147,765 | 28,886,807 | |||||||||
| Commitments and contingencies (Note 8) | |||||||||||
| Stockholders’ equity: | |||||||||||
| Common stock, $0.001 par value; 4,990,000,000 shares authorized at June 30, 2025 and December 31, 2024; 424,926,346 and 427,757,100 issued and outstanding at June 30, 2025 and December 31, 2024, respectively | 6,932,828 | 6,252,126 | |||||||||
| Treasury stock at cost (31,228,532 and 25,953,460 shares at June 30, 2025 and December 31, 2024, respectively) | (18,392,942) | (13,171,638) | |||||||||
| Accumulated other comprehensive income (loss) | (904,668) | 362,162 | |||||||||
| Retained earnings | 37,316,681 | 31,300,917 | |||||||||
| Total stockholders’ equity | 24,951,899 | 24,743,567 | |||||||||
| Total liabilities and stockholders’ equity | $ | 53,099,664 | $ | 53,630,374 |
See accompanying notes to the consolidated financial statements.
NETFLIX, INC.
Consolidated Statements of Stockholders’ Equity
(unaudited)
(in thousands)
| Three Months Ended | Six Months Ended | |||||||||||||||||||||||||
| June 30, 2025 | June 30, 2024 | June 30, 2025 | June 30, 2024 | |||||||||||||||||||||||
| Total stockholders' equity, beginning balances | $ | 24,028,073 | $ | 21,365,410 | $ | 24,743,567 | $ | 20,588,313 | ||||||||||||||||||
| Common stock and additional paid-in capital: | ||||||||||||||||||||||||||
| Beginning balances | $ | 6,677,469 | $ | 5,489,850 | $ | 6,252,126 | $ | 5,145,172 | ||||||||||||||||||
| Issuance of common stock | 174,497 | 121,445 | 527,863 | 389,778 | ||||||||||||||||||||||
| Stock-based compensation expense | 80,862 | 68,766 | 152,839 | 145,111 | ||||||||||||||||||||||
| Ending balances | $ | 6,932,828 | $ | 5,680,061 | $ | 6,932,828 | $ | 5,680,061 | ||||||||||||||||||
| Treasury stock: | ||||||||||||||||||||||||||
| Beginning balances | $ | (16,754,929) | $ | (8,934,056) | $ | (13,171,638) | $ | (6,922,200) | ||||||||||||||||||
| Repurchases of common stock to be held as treasury stock | (1,638,013) | (1,612,999) | (5,221,304) | (3,624,855) | ||||||||||||||||||||||
| Ending balances | $ | (18,392,942) | $ | (10,547,055) | $ | (18,392,942) | $ | (10,547,055) | ||||||||||||||||||
| Accumulated other comprehensive income (loss): | ||||||||||||||||||||||||||
| Beginning balances | $ | (85,735) | $ | (111,879) | $ | 362,162 | $ | (223,945) | ||||||||||||||||||
| Other comprehensive income (loss) | (818,933) | 22,765 | (1,266,830) | 134,831 | ||||||||||||||||||||||
| Ending balances | $ | (904,668) | $ | (89,114) | $ | (904,668) | $ | (89,114) | ||||||||||||||||||
| Retained earnings: | ||||||||||||||||||||||||||
| Beginning balances | $ | 34,191,268 | $ | 24,921,495 | $ | 31,300,917 | $ | 22,589,286 | ||||||||||||||||||
| Net income | 3,125,413 | 2,147,306 | 6,015,764 | 4,479,515 | ||||||||||||||||||||||
| Ending balances | $ | 37,316,681 | $ | 27,068,801 | $ | 37,316,681 | $ | 27,068,801 | ||||||||||||||||||
| Total stockholders' equity, ending balances | $ | 24,951,899 | $ | 22,112,693 | $ | 24,951,899 | $ | 22,112,693 |
See accompanying notes to the consolidated financial statements.
NETFLIX, INC.
Notes to Consolidated Financial Statements
(unaudited)
1. Basis of Presentation and Summary of Significant Accounting Policies
The accompanying interim consolidated financial statements of Netflix, Inc. and its wholly owned subsidiaries (the “Company”) have been prepared in conformity with accounting principles generally accepted in the United States (“U.S.”) and are consistent in all material respects with those applied in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024 filed with the Securities and Exchange Commission (the “SEC”) on January 27, 2025. The preparation of consolidated financial statements in conformity with U.S. generally accepted accounting principles (“GAAP”) requires management to make estimates and judgments that affect the amounts reported in the consolidated financial statements and accompanying notes. Significant items subject to such estimates and assumptions include the amortization of content assets and the recognition and measurement of income tax assets and liabilities. The Company bases its estimates on historical experience and on various other assumptions that the Company believes to be reasonable under the circumstances. On a regular basis, the Company evaluates the assumptions, judgments and estimates. Actual results may differ from these estimates.
The interim financial information is unaudited, but reflects all normal recurring adjustments that are, in the opinion of management, necessary to fairly present the information set forth herein. The interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements and related notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024. Interim results are not necessarily indicative of the results for a full year.
There have been no material changes in the Company’s significant accounting policies as compared to the significant accounting policies described in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024.
Recently issued accounting pronouncements not yet adopted
In December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which requires public entities, on an annual basis, to provide disclosure of specific categories in the rate reconciliation table, as well as disclosure of income taxes paid disaggregated by jurisdiction. ASU 2023-09 is effective for the Company for the fiscal year ending December 31, 2025. The Company is currently evaluating the impact of adopting ASU 2023-09.
In November 2024, the FASB issued ASU 2024-03, Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses, requiring public entities to disclose additional information about specific expense categories in the notes to the financial statements on an interim and annual basis. ASU 2024-03 is effective for fiscal years beginning after December 15, 2026, and for interim periods beginning after December 15, 2027, with early adoption permitted. The Company is currently evaluating the impact of adopting ASU 2024-03.
2. Revenue Recognition
The following table summarizes revenues by region for the three and six months ended June 30, 2025 and June 30, 2024. Total revenues are inclusive of hedging gains (losses) of $(37) million and $127 million for the three and six months ended June 30, 2025, respectively, and $33 million and $22 million for the three and six months ended June 30, 2024, respectively. See Note 7 Derivative Financial Instruments and Hedging Activities for further information.
| Three Months Ended | Six Months Ended | |||||||||||||||||||||||||
| June 30, 2025 | June 30, 2024 | June 30, 2025 | June 30, 2024 | |||||||||||||||||||||||
| (in thousands) | ||||||||||||||||||||||||||
| United States and Canada (UCAN) | $ | 4,929,003 | $ | 4,295,560 | $ | 9,546,101 | $ | 8,519,875 | ||||||||||||||||||
| Europe, Middle East, and Africa (EMEA) | 3,538,175 | 3,007,772 | 6,942,851 | 5,965,965 | ||||||||||||||||||||||
| Latin America (LATAM) | 1,306,735 | 1,204,145 | 2,568,669 | 2,369,153 | ||||||||||||||||||||||
| Asia-Pacific (APAC) | 1,305,253 | 1,051,833 | 2,564,346 | 2,074,757 | ||||||||||||||||||||||
| Total Revenues | $ | 11,079,166 | $ | 9,559,310 | $ | 21,621,967 | $ | 18,929,750 | ||||||||||||||||||
Deferred revenue consists of membership fees billed that have not been recognized, as well as gift cards and other prepaid memberships that have not been fully redeemed. As of June 30, 2025, total deferred revenue was $1,728 million, the vast majority of which was related to membership fees billed that are expected to be recognized as revenue within the next month. The remaining deferred revenue balance, which is related to gift cards and other prepaid memberships, will be recognized as revenue over the period of service after redemption, which is expected to occur over the next 12 months. Deferred revenue increased $208 million from $1,521 million as of December 31, 2024 to $1,728
million as of June 30, 2025. Deferred revenue balances may fluctuate due to the number of paid memberships and the price of our memberships.
3. Earnings Per Share
Basic earnings per share is computed using the weighted-average number of outstanding shares of common stock during the period. Diluted earnings per share is computed using the weighted-average number of outstanding shares of common stock and, when dilutive, potential outstanding shares of common stock during the period. Potential shares of common stock are calculated using the treasury-stock method and consist of incremental shares issuable upon the assumed exercise of stock options and vesting of time-based and performance-based restricted stock units. The computation of earnings per share is as follows:
| Three Months Ended | Six Months Ended | ||||||||||||||||||||||
| June 30, 2025 | June 30, 2024 | June 30, 2025 | June 30, 2024 | ||||||||||||||||||||
| (in thousands, except per share data) | |||||||||||||||||||||||
| Basic earnings per share: | |||||||||||||||||||||||
| Net income | $ | 3,125,413 | $ | 2,147,306 | $ | 6,015,764 | $ | 4,479,515 | |||||||||||||||
| Shares used in computation: | |||||||||||||||||||||||
| Weighted-average shares of common stock outstanding | 425,211 | 430,065 | 426,235 | 431,078 | |||||||||||||||||||
| Basic earnings per share | $ | 7.35 | $ | 4.99 | $ | 14.11 | $ | 10.39 | |||||||||||||||
| Diluted earnings per share: | |||||||||||||||||||||||
| Net income | $ | 3,125,413 | $ | 2,147,306 | $ | 6,015,764 | $ | 4,479,515 | |||||||||||||||
| Shares used in computation: | |||||||||||||||||||||||
| Weighted-average shares of common stock outstanding | 425,211 | 430,065 | 426,235 | 431,078 | |||||||||||||||||||
| Effect of dilutive stock-based awards | 9,672 | 9,674 | 9,682 | 9,619 | |||||||||||||||||||
| Weighted-average number of shares | 434,883 | 439,739 | 435,917 | 440,697 | |||||||||||||||||||
| Diluted earnings per share | $ | 7.19 | $ | 4.88 | $ | 13.80 | $ | 10.16 |
The following table summarizes the potential shares of common stock excluded from the diluted calculation as their inclusion would have been anti-dilutive:
| Three Months Ended | Six Months Ended | ||||||||||||||||||||||
| June 30, 2025 | June 30, 2024 | June 30, 2025 | June 30, 2024 | ||||||||||||||||||||
| (in thousands) | |||||||||||||||||||||||
| Stock-based awards | 29 | 118 | 33 | 402 |
4. Cash, Cash Equivalents, Restricted Cash, and Short-term Investments
The Company classifies short-term investments, which consist of marketable securities with original maturities in excess of 90 days as available-for-sale (“AFS”). The Company does not buy and hold securities principally for the purpose of selling them in the near future. The Company’s policy is focused on the preservation of capital, liquidity and return. From time to time, the Company may sell certain securities but the objectives are generally not to generate profits on short-term differences in price.
The following tables summarize the Company's cash, cash equivalents, restricted cash and short-term investments as of June 30, 2025 and December 31, 2024:
| As of June 30, 2025 | |||||||||||||||||||||||||||||||||||||||||||||||
| Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Estimated Fair Value | Cash and Cash Equivalents | Short-term Investments | Other Current Assets | Non-current Assets | ||||||||||||||||||||||||||||||||||||||||
| (in thousands) | |||||||||||||||||||||||||||||||||||||||||||||||
| Cash | $ | 4,955,802 | $ | — | $ | — | $ | 4,955,802 | $ | 4,952,694 | $ | — | $ | 3,024 | $ | 84 | |||||||||||||||||||||||||||||||
| Level 1 securities: | |||||||||||||||||||||||||||||||||||||||||||||||
| Money market funds | 2,887,056 | — | — | 2,887,056 | 2,886,996 | — | — | 60 | |||||||||||||||||||||||||||||||||||||||
| Level 2 securities: | |||||||||||||||||||||||||||||||||||||||||||||||
| Time Deposits(1) | 550,830 | — | — | 550,830 | 337,715 | 213,115 | — | — | |||||||||||||||||||||||||||||||||||||||
| $ | 8,393,688 | $ | — | $ | — | $ | 8,393,688 | $ | 8,177,405 | $ | 213,115 | $ | 3,024 | $ | 144 | ||||||||||||||||||||||||||||||||
| As of December 31, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||
| Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Estimated Fair Value | Cash and Cash Equivalents | Short-term Investments | Other Current Assets | Non-current Assets | ||||||||||||||||||||||||||||||||||||||||
| (in thousands) | |||||||||||||||||||||||||||||||||||||||||||||||
| Cash | $ | 4,866,753 | $ | — | $ | — | $ | 4,866,753 | $ | 4,864,207 | $ | — | $ | 2,472 | $ | 74 | |||||||||||||||||||||||||||||||
| Level 1 securities: | |||||||||||||||||||||||||||||||||||||||||||||||
| Money market funds | 2,676,314 | — | — | 2,676,314 | 2,676,256 | — | — | 58 | |||||||||||||||||||||||||||||||||||||||
| Level 2 securities: | |||||||||||||||||||||||||||||||||||||||||||||||
| Time Deposits(1) | 301,374 | — | — | 301,374 | 264,270 | 37,104 | — | — | |||||||||||||||||||||||||||||||||||||||
| Government securities | 1,738,642 | 3,260 | — | 1,741,902 | — | 1,741,902 | — | — | |||||||||||||||||||||||||||||||||||||||
| $ | 9,583,083 | $ | 3,260 | $ | — | $ | 9,586,343 | $ | 7,804,733 | $ | 1,779,006 | $ | 2,472 | $ | 132 |
(1) The majority of the Company's time deposits are international deposits, which mature within one year.
Other current assets and non-current assets primarily consist of restricted cash for deposits related to self-insurance. The fair value of available-for-sale securities, cash equivalents and short-term investments included in the Level 2 category is based on observable inputs, such as quoted prices for similar assets at the measurement date; quoted prices in markets that are not active; or other inputs that are observable, either directly or indirectly.
See Note 6 Debt and Note 7 Derivative Financial Instruments and Hedging Activities to the consolidated financial statements for further information regarding the fair value of the Company’s senior notes and derivative financial instruments.
5. Balance Sheet Components
Content Assets, Net
Content assets consisted of the following:
| As of | |||||||||||
| June 30, 2025 | December 31, 2024 | ||||||||||
| (in thousands) | |||||||||||
| Licensed content, net | $ | 12,273,051 | $ | 12,422,309 | |||||||
| Produced content, net | |||||||||||
| Released, less amortization | 10,090,174 | 10,151,543 | |||||||||
| In production | 8,930,196 | 9,317,367 | |||||||||
| In development and pre-production | 795,973 | 561,243 | |||||||||
| 19,816,343 | 20,030,153 | ||||||||||
| Content assets, net | $ | 32,089,394 | $ | 32,452,462 | |||||||
The following table summarizes the amortization of content assets:
| Three Months Ended | Six Months Ended | ||||||||||||||||||||||
| June 30, 2025 | June 30, 2024 | June 30, 2025 | June 30, 2024 | ||||||||||||||||||||
| (in thousands) | |||||||||||||||||||||||
| Licensed content | $ | 2,010,207 | $ | 1,884,491 | $ | 4,008,732 | $ | 3,719,608 | |||||||||||||||
| Produced content | 1,821,867 | 1,885,199 | 3,646,454 | 3,720,887 | |||||||||||||||||||
| Total | $ | 3,832,074 | $ | 3,769,690 | $ | 7,655,186 | $ | 7,440,495 |
Property and Equipment, Net
Property and equipment and accumulated depreciation consisted of the following:
| As of | ||||||||||||||||||||
| June 30, 2025 | December 31, 2024 | Estimated Useful Lives | ||||||||||||||||||
| (in thousands) | ||||||||||||||||||||
| Land | $ | 85,000 | $ | 85,000 | ||||||||||||||||
| Buildings and improvements | 508,284 | 475,684 | 30 years | |||||||||||||||||
| Leasehold improvements | 1,080,760 | 1,026,593 | Over life of lease | |||||||||||||||||
| Furniture and fixtures | 139,613 | 134,987 | 3 years | |||||||||||||||||
| Information technology | 519,162 | 446,419 | 3-5 years | |||||||||||||||||
| Corporate aircraft | 99,195 | 99,175 | 8-10 years | |||||||||||||||||
| Machinery and equipment | 15,592 | 15,135 | 3-5 years | |||||||||||||||||
| Capital work-in-progress | 334,277 | 228,300 | ||||||||||||||||||
| Property and equipment, gross | 2,781,883 | 2,511,293 | ||||||||||||||||||
| Less: Accumulated depreciation | (1,038,317) | (917,537) | ||||||||||||||||||
| Property and equipment, net | $ | 1,743,566 | $ | 1,593,756 |
Leases
The Company has entered into operating leases primarily for real estate. Operating leases are included in "Other non-current assets" on the Company's Consolidated Balance Sheets, and represent the Company’s right to use the underlying asset for the lease term. The Company’s obligations to make lease payments are included in "Accrued expenses and other liabilities" and "Other non-current liabilities" on the Company's Consolidated Balance Sheets.
Information related to the Company's operating right-of-use assets and related operating lease liabilities were as follows:
| Three Months Ended | Six Months Ended | ||||||||||||||||||||||
| June 30, 2025 | June 30, 2024 | June 30, 2025 | June 30, 2024 | ||||||||||||||||||||
| (in thousands) | |||||||||||||||||||||||
| Cash paid for operating lease liabilities | $ | 129,574 | $ | 130,104 | $ | 247,921 | $ | 255,410 | |||||||||||||||
| Right-of-use assets obtained in exchange for new operating lease obligations | 138,534 | 160,812 | 211,527 | 344,774 |
| As of | |||||||||||
| June 30, 2025 | December 31, 2024 | ||||||||||
| (in thousands) | |||||||||||
| Operating lease right-of-use assets, net | $ | 2,175,343 | $ | 2,102,310 | |||||||
| Current operating lease liabilities | 453,940 | 428,482 | |||||||||
| Non-current operating lease liabilities | 2,026,821 | 1,983,688 | |||||||||
| Total operating lease liabilities | $ | 2,480,761 | $ | 2,412,170 |
Other Current Assets
Other current assets consisted of the following:
| As of | ||||||||||||||
| June 30, 2025 | December 31, 2024 | |||||||||||||
| (in thousands) | ||||||||||||||
| Trade receivables | $ | 1,579,859 | $ | 1,335,304 | ||||||||||
| Prepaid expenses | 451,050 | 431,924 | ||||||||||||
| Other | 1,571,677 | 1,749,412 | ||||||||||||
| Total other current assets | $ | 3,602,586 | $ | 3,516,640 |
6. Debt
As of June 30, 2025, the Company had aggregate outstanding long-term notes of $14,453 million, net of $62 million of issuance costs and discounts, with varying maturities (the "Notes"). As of December 31, 2024, the Company had aggregate outstanding notes of $15,583 million, net of $70 million of issuance costs and discounts. Each of the Notes are senior unsecured obligations of the Company. Interest is payable semi-annually at fixed rates.
A portion of the outstanding Notes is denominated in foreign currency (comprised of €4,700 million as of June 30, 2025 and €5,170 million as of December 31, 2024, respectively) and is remeasured into U.S. dollars at each balance sheet date (with remeasurement loss, net of hedging impacts, totaling $55 million and $84 million, respectively, for the three and six months ended June 30, 2025). See Note 7 Derivative Financial Instruments and Hedging Activities to the consolidated financial statements for further information regarding the Company’s derivative and non-derivative financial instruments.
The following table provides a summary of the Company's outstanding debt and the fair values based on quoted market prices in less active markets as of June 30, 2025 and December 31, 2024:
| Principal Amount at Par | Level 2 Fair Value as of | |||||||||||||||||||||||||||||||||||||
| June 30, 2025 | December 31, 2024 | Issuance Date | Maturity | June 30, 2025 | December 31, 2024 | |||||||||||||||||||||||||||||||||
| (in millions) | (in millions) | |||||||||||||||||||||||||||||||||||||
| 5.875% Senior Notes | $ | — | $ | 800 | February 2015 | February 2025 | $ | — | $ | 801 | ||||||||||||||||||||||||||||
| 3.000% Senior Notes(1) | — | 487 | April 2020 | June 2025 | — | 487 | ||||||||||||||||||||||||||||||||
| 3.625% Senior Notes | — | 500 | April 2020 | June 2025 | — | 497 | ||||||||||||||||||||||||||||||||
| 4.375% Senior Notes | 1,000 | 1,000 | October 2016 | November 2026 | 1,005 | 998 | ||||||||||||||||||||||||||||||||
| 3.625% Senior Notes(1) | 1,525 | 1,346 | May 2017 | May 2027 | 1,559 | 1,375 | ||||||||||||||||||||||||||||||||
| 4.875% Senior Notes | 1,600 | 1,600 | October 2017 | April 2028 | 1,687 | 1,607 | ||||||||||||||||||||||||||||||||
| 5.875% Senior Notes | 1,900 | 1,900 | April 2018 | November 2028 | 1,939 | 1,970 | ||||||||||||||||||||||||||||||||
| 4.625% Senior Notes(1) | 1,291 | 1,139 | October 2018 | May 2029 | 1,379 | 1,220 | ||||||||||||||||||||||||||||||||
| 6.375% Senior Notes | 800 | 800 | October 2018 | May 2029 | 861 | 848 | ||||||||||||||||||||||||||||||||
| 3.875% Senior Notes(1) | 1,408 | 1,242 | April 2019 | November 2029 | 1,471 | 1,293 | ||||||||||||||||||||||||||||||||
| 5.375% Senior Notes | 900 | 900 | April 2019 | November 2029 | 940 | 918 | ||||||||||||||||||||||||||||||||
| 3.625% Senior Notes(1) | 1,291 | 1,139 | October 2019 | June 2030 | 1,336 | 1,174 | ||||||||||||||||||||||||||||||||
| 4.875% Senior Notes | 1,000 | 1,000 | October 2019 | June 2030 | 1,023 | 996 | ||||||||||||||||||||||||||||||||
| 4.900% Senior Notes | 1,000 | 1,000 | August 2024 | August 2034 | 1,020 | 982 | ||||||||||||||||||||||||||||||||
| 5.400% Senior Notes | 800 | 800 | August 2024 | August 2054 | 791 | 782 | ||||||||||||||||||||||||||||||||
| $ | 14,515 | $ | 15,653 | $ | 15,011 | $ | 15,948 |
(1) The following Senior Notes have a principal amount denominated in euros: 3.000% Senior Notes for €470 million, 3.625% Senior Notes for €1,300 million, 4.625% Senior Notes for €1,100 million, 3.875% Senior Notes for €1,200 million, and 3.625% Senior Notes for €1,100 million.
In the six months ended June 30, 2025, the Company repaid upon maturity the $800 million aggregate principal amount of its 5.875% Senior Notes, the €470 million aggregate principal amount of its 3.000% Senior Notes, and the $500 million aggregate principal amount of its 3.625% Senior Notes.
Each of the Notes are repayable in whole or in part upon the occurrence of a change of control, at the option of the holders, at a purchase price in cash equal to 101% of the principal plus accrued interest. The Company may redeem the Notes prior to maturity in whole or in part at an amount equal to the principal amount thereof plus accrued and unpaid interest and an applicable premium. The Notes include, among other terms and conditions, limitations on the Company's ability to create, incur or allow certain liens, and consolidate or merge with, or convey, transfer or lease all or substantially all of the Company's and its subsidiaries assets, to another person. Certain of the Notes additionally limit the ability to enter into sale and lease-back transactions and create, assume, incur or guarantee additional indebtedness of certain of the Company's subsidiaries. As of June 30, 2025 and December 31, 2024, the Company was in compliance with all related covenants.
Revolving Credit Facility
On April 12, 2024, the Company entered into a five-year, $3 billion unsecured revolving credit facility that matures on April 12, 2029 (the “Revolving Credit Agreement”), to replace its previous $1 billion unsecured revolving credit facility. As of June 30, 2025, no amounts have been borrowed under the Revolving Credit Agreement.
The borrowings under the Revolving Credit Agreement bear interest, at the Company’s option, of either (i) a floating rate per annum equal to a base rate (the “Alternate Base Rate”) plus an applicable margin or (ii) a per annum rate equal to an adjusted term SOFR rate (the “Adjusted Term SOFR Rate”) plus an applicable margin. The applicable margin for Alternate Base Rate loans will range from 0.00% to 0.25%, and the applicable margin for Adjusted Term SOFR Rate loans will range from 0.75% to 1.25%, each based on the Company’s credit ratings.
The Revolving Credit Agreement contains customary affirmative covenants and negative covenants (and customary baskets and exceptions with respect thereto) for a credit facility of this size and type and requires the Company to maintain a minimum ratio of consolidated EBITDA to consolidated interest expense of 3.0 to 1.0 as of the last day of each fiscal quarter. As of June 30, 2025 and December 31, 2024, the Company was in compliance with all related covenants and ratios.
Commercial Paper Program
In May 2025, the Company established a $3 billion commercial paper program (the “Commercial Paper Program”) under which it may issue short-term unsecured commercial paper notes. Net proceeds from this program may be used for general corporate purposes. There were no borrowings outstanding under the Commercial Paper Program as of June 30, 2025.
7. Derivative Financial Instruments and Hedging Activities
The Company uses derivative and non-derivative instruments to manage foreign exchange risk related to its ongoing business operations with the primary objective of reducing earnings and cash flow volatility associated with fluctuations in foreign exchange rates.
Notional Amount of Derivative Contracts
The net notional amounts of the Company’s outstanding derivative instruments were as follows:
| As of | |||||||||||
| June 30, 2025 | December 31, 2024 | ||||||||||
| (in thousands) | |||||||||||
| Derivatives designated as hedging instruments: | |||||||||||
| Foreign exchange contracts | |||||||||||
| Cash flow hedges | $ | 20,327,687 | $ | 18,508,390 | |||||||
| Fair value hedges | 3,318,883 | 3,819,817 | |||||||||
| Derivatives not designated as hedging instruments: | |||||||||||
| Foreign exchange contracts | 1,285,612 | 1,432,136 | |||||||||
| Total | $ | 24,932,182 | $ | 23,760,343 |
As of June 30, 2025 and December 31, 2024, approximately $1.2 billion and $1.0 billion, respectively, of the Company’s euro–denominated Senior Notes were designated as hedges of the foreign exchange risk of the Company’s net investment in certain foreign subsidiaries.
As of June 30, 2025 and December 31, 2024, the carrying amount of the Company's euro-denominated Senior Notes (included in "Long-term debt" on the Company's Consolidated Balance Sheets), which were designated as the hedged items in fair value hedges, was approximately $3.5 billion and $3.6 billion, respectively.
Note 6 Debt for further information on the Company’s debt obligations.
Fair Value of Derivative Contracts
The fair value of the Company’s outstanding derivative instruments was as follows:
| As of June 30, 2025 | |||||||||||||||||||||||
| Derivative Assets | Derivative Liabilities | ||||||||||||||||||||||
| Other current assets | Other non-current assets | Accrued expenses and other liabilities | Other non-current liabilities | ||||||||||||||||||||
| (in thousands) | |||||||||||||||||||||||
| Derivatives designated as hedging instruments: | |||||||||||||||||||||||
| Foreign exchange contracts | $ | 310,320 | $ | 25,566 | $ | 591,529 | $ | 467,961 | |||||||||||||||
| Derivatives not designated as hedging instruments: | |||||||||||||||||||||||
| Foreign exchange contracts | 11,136 | — | 9,641 | — | |||||||||||||||||||
| Total | $ | 321,456 | $ | 25,566 | $ | 601,170 | $ | 467,961 | |||||||||||||||
| As of December 31, 2024 | |||||||||||||||||||||||
| Derivative Assets | Derivative Liabilities | ||||||||||||||||||||||
| Other current assets | Other non-current assets | Accrued expenses and other liabilities | Other non-current liabilities | ||||||||||||||||||||
| (in thousands) | |||||||||||||||||||||||
| Derivatives designated as hedging instruments: | |||||||||||||||||||||||
| Foreign exchange contracts | $ | 580,065 | $ | 406,677 | $ | 303,425 | $ | 83 | |||||||||||||||
| Derivatives not designated as hedging instruments: | |||||||||||||||||||||||
| Foreign exchange contracts | 16,211 | — | 14,492 | — | |||||||||||||||||||
| Total | $ | 596,276 | $ | 406,677 | $ | 317,917 | $ | 83 | |||||||||||||||
The Company classifies derivative instruments in the Level 2 category within the fair value hierarchy. These instruments are valued using industry standard valuation models that use observable inputs such as interest rate yield curves, and forward and spot prices for currencies.
As of June 30, 2025, the pre-tax net accumulated loss on our foreign currency cash flow hedges included in accumulated other comprehensive income (“AOCI”) on the Consolidated Balance Sheets expected to be recognized in earnings within the next 12 months is $543 million.
Master Netting Agreements
In order to mitigate counterparty credit risk, the Company enters into master netting agreements with its counterparties for its foreign currency exchange contracts which permit the parties to settle amounts on a net basis under certain conditions. The Company has elected to present its derivative assets and liabilities on a gross basis on its Consolidated Balance Sheets.
The Company also enters into collateral security arrangements with its counterparties that require the parties to post cash collateral when certain contractual thresholds are met. Cash collateral received is presented in “Accrued expenses and other liabilities” representing the Company’s obligation to return counterparty cash collateral. Cash collateral posted is presented in “Other current assets,” representing the Company’s right to reclaim the cash collateral. The Company does not offset the fair value of its derivative instruments against the fair value of cash collateral posted or received.
The potential offsetting effect to the Company’s derivative assets and liabilities under its master netting agreements and collateral security agreements were as follows:
| As of June 30, 2025 | |||||||||||||||||||||||||||||||||||
| Gross Amount Not Offset in the Consolidated Balance Sheets | |||||||||||||||||||||||||||||||||||
| Gross Amount Recognized in the Consolidated Balance Sheets | Gross Amount Offset in the Consolidated Balance Sheets | Net Amount Presented in the Consolidated Balance Sheets | Financial Instruments | Collateral Received and Posted | Net Amount | ||||||||||||||||||||||||||||||
| (in thousands) | |||||||||||||||||||||||||||||||||||
| Derivative assets | $ | 347,022 | $ | — | $ | 347,022 | $ | (340,280) | $ | — | $ | 6,742 | |||||||||||||||||||||||
| Derivative liabilities | 1,069,131 | — | 1,069,131 | (340,280) | (36,190) | 692,661 | |||||||||||||||||||||||||||||
| As of December 31, 2024 | |||||||||||||||||||||||||||||||||||
| Gross Amount Not Offset in the Consolidated Balance Sheets | |||||||||||||||||||||||||||||||||||
| Gross Amount Recognized in the Consolidated Balance Sheets | Gross Amount Offset in the Consolidated Balance Sheets | Net Amount Presented in the Consolidated Balance Sheets | Financial Instruments | Collateral Received and Posted | Net Amount | ||||||||||||||||||||||||||||||
| (in thousands) | |||||||||||||||||||||||||||||||||||
| Derivative assets | $ | 1,002,953 | $ | — | $ | 1,002,953 | $ | (316,320) | $ | (1,800) | $ | 684,833 | |||||||||||||||||||||||
| Derivative liabilities | 318,000 | — | 318,000 | (316,320) | — | 1,680 | |||||||||||||||||||||||||||||
Effect of Derivative and Non-Derivative Instruments on Consolidated Financial Statements
The pre-tax gains (losses) on the Company’s cash flow hedges, fair value hedges, and net investment hedges recognized in AOCI were as follows:
| Three Months Ended | Six Months Ended | ||||||||||||||||||||||
| June 30, 2025 | June 30, 2024 | June 30, 2025 | June 30, 2024 | ||||||||||||||||||||
| (in thousands) | |||||||||||||||||||||||
| Cash flow hedges: | |||||||||||||||||||||||
| Foreign exchange contracts | |||||||||||||||||||||||
| Amount included in the assessment of effectiveness | $ | (1,222,145) | $ | 160,544 | $ | (1,709,112) | $ | 389,688 | |||||||||||||||
| Fair value hedges: | |||||||||||||||||||||||
| Foreign exchange contracts | |||||||||||||||||||||||
| Amount excluded from the assessment of effectiveness | (18,099) | — | (36,130) | — | |||||||||||||||||||
| Net investment hedges: | |||||||||||||||||||||||
| Foreign currency-denominated debt | |||||||||||||||||||||||
| Amount included in the assessment of effectiveness | (93,400) | (3,400) | (138,000) | (3,400) | |||||||||||||||||||
| Total | $ | (1,333,644) | $ | 157,144 | $ | (1,883,242) | $ | 386,288 |
The gains (losses) on hedged items and derivative instruments recognized in the Consolidated Statement of Operations were as follows:
| Three Months Ended | |||||||||||||||||||||||||||||||||||
| June 30, 2025 | June 30, 2024 | ||||||||||||||||||||||||||||||||||
| Revenues | Cost of Revenues | Interest and other income (expense) | Revenues | Cost of Revenues | Interest and other income (expense) | ||||||||||||||||||||||||||||||
| (in thousands) | |||||||||||||||||||||||||||||||||||
| Total amounts presented in the Consolidated Statements of Operations | $ | 11,079,166 | $ | 5,325,311 | $ | 39,630 | $ | 9,559,310 | $ | 5,174,143 | $ | 79,005 | |||||||||||||||||||||||
| Gains (losses) on derivatives in cash flow hedging relationship | |||||||||||||||||||||||||||||||||||
| Foreign exchange contracts | |||||||||||||||||||||||||||||||||||
| Amount of gains (losses) reclassified from AOCI | (37,385) | 344 | — | 33,301 | 73 | — | |||||||||||||||||||||||||||||
| Gains (losses) on derivatives in fair value hedging relationship | |||||||||||||||||||||||||||||||||||
| Foreign exchange contracts | |||||||||||||||||||||||||||||||||||
| Hedged items | — | — | (311,562) | — | — | — | |||||||||||||||||||||||||||||
| Derivatives designated as hedging instruments | — | — | 316,192 | — | — | — | |||||||||||||||||||||||||||||
| Amount excluded from assessment of effectiveness and recognized in earnings based on amortization approach | — | — | (14,802) | — | — | — | |||||||||||||||||||||||||||||
| Gains (losses) on derivatives not designated as hedging instruments | |||||||||||||||||||||||||||||||||||
| Foreign exchange contracts | — | — | (50,021) | — | — | 9,797 |
| Six Months Ended | |||||||||||||||||||||||||||||||||||
| June 30, 2025 | June 30, 2024 | ||||||||||||||||||||||||||||||||||
| Revenues | Cost of Revenues | Interest and other income (expense) | Revenues | Cost of Revenues | Interest and other income (expense) | ||||||||||||||||||||||||||||||
| (in thousands) | |||||||||||||||||||||||||||||||||||
| Total amounts presented in the Consolidated Statements of Operations | $ | 21,621,967 | $ | 10,588,458 | $ | 90,529 | $ | 18,929,750 | $ | 10,151,216 | $ | 234,364 | |||||||||||||||||||||||
| Gains (losses) on derivatives in cash flow hedging relationship | |||||||||||||||||||||||||||||||||||
| Foreign exchange contracts | |||||||||||||||||||||||||||||||||||
| Amount of gains (losses) reclassified from AOCI | 127,411 | (1,995) | — | 22,060 | 267 | — | |||||||||||||||||||||||||||||
| Gains (losses) on derivatives in fair value hedging relationship | |||||||||||||||||||||||||||||||||||
| Foreign exchange contracts | |||||||||||||||||||||||||||||||||||
| Hedged items | — | — | (465,387) | — | — | — | |||||||||||||||||||||||||||||
| Derivatives designated as hedging instruments | — | — | 473,627 | — | — | — | |||||||||||||||||||||||||||||
| Amount excluded from assessment of effectiveness and recognized in earnings based on amortization approach | — | — | (29,371) | — | — | — | |||||||||||||||||||||||||||||
| Gains (losses) on derivatives not designated as hedging instruments | |||||||||||||||||||||||||||||||||||
| Foreign exchange contracts | — | — | (70,971) | — | — | 14,063 |
8. Commitments and Contingencies
Content
As of June 30, 2025, the Company had $21.0 billion of obligations comprised of $4.1 billion included in "Current content liabilities" and $1.6 billion of "Non-current content liabilities" on the Consolidated Balance Sheets and $15.3 billion of obligations that are not reflected on the Consolidated Balance Sheets as they did not yet meet the criteria for recognition.
As of December 31, 2024, the Company had $23.2 billion of obligations comprised of $4.4 billion included in "Current content liabilities" and $1.8 billion of "Non-current content liabilities" on the Consolidated Balance Sheets and $17.0 billion of obligations that are not reflected on the Consolidated Balance Sheets as they did not yet meet the criteria for recognition.
The expected timing of payments for these content obligations is as follows:
| As of | |||||||||||
| June 30, 2025 | December 31, 2024 | ||||||||||
| (in thousands) | |||||||||||
| Less than one year | $ | 10,842,959 | $ | 11,424,696 | |||||||
| Due after one year and through three years | 7,179,966 | 8,113,910 | |||||||||
| Due after three years and through five years | 2,273,025 | 2,809,834 | |||||||||
| Due after five years | 671,320 | 900,491 | |||||||||
| Total content obligations | $ | 20,967,270 | $ | 23,248,931 |
Content obligations include amounts related to the acquisition, licensing and production of content. Obligations that are in non-U.S. dollar currencies are translated to the U.S. dollar at period end rates. An obligation for the production of content includes non-cancelable commitments under creative talent and employment agreements as well as other production related commitments. An obligation for the acquisition and licensing of content is incurred at the time the Company enters into an agreement to obtain future titles. Once a title becomes available, a content liability is recorded on the Consolidated Balance Sheets. Certain agreements include the obligation to license rights for unknown future titles, the ultimate quantity and/or fees for which are not yet determinable as of the reporting date. Traditional film output deals, or certain TV series license agreements where the number of seasons to be aired is unknown, are examples of such license agreements. The Company does not include any estimated obligation for these future titles beyond the known minimum amount. However, the unknown obligations are expected to be significant.
Legal Proceedings
From time to time, in the normal course of its operations, the Company is subject to litigation matters and claims, including claims relating to employee relations, business practices and patent infringement. Litigation can be expensive and disruptive to normal business operations. Moreover, the results of complex legal proceedings are difficult to predict and the Company's view of these matters may change in the future as the litigation and events related thereto unfold. The Company expenses legal fees as incurred. The Company records a provision for contingent losses when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated. An unfavorable outcome to any legal matter, if material, could have an adverse effect on the Company's operations or its financial position, liquidity or results of operations.
The Company is involved in litigation matters not listed herein but does not consider the matters to be material either individually or in the aggregate at this time. The Company's view of the matters not listed may change in the future as the litigation and events related thereto unfold.
Non-Income Taxes
The Company is routinely under audit by various tax authorities with regard to non-income tax matters. The subject matter of non-income tax audits primarily arises from disputes on the tax treatment and tax rate applied to our revenue in certain jurisdictions. We accrue, as operating expenses, non-income taxes that may result from examinations by, or any negotiated agreements with, these tax authorities when a loss is probable and reasonably estimable.
Similar to other U.S. companies doing business in Brazil, the Company is involved in a number of matters with Brazilian tax authorities regarding non-income tax assessments. Although the Company believes it has meritorious defenses to these matters, and a loss is not probable, there is inherent complexity and uncertainty with respect to these matters, and the final outcome may be materially different from our expectations. The Company continues to monitor developments in similar court cases that may influence its evaluation of the likelihood of incurring a loss. The cumulative current potential exposure with respect to the various issues with Brazilian tax authorities regarding non-income tax assessments, for which the loss recognition criteria has not been met, is estimated to be approximately $600 million, and is expected to increase over time.
Guarantees— Indemnification Obligations
In the ordinary course of business, the Company has entered into contractual arrangements under which it has agreed to provide indemnification of varying scope and terms to business partners and other parties with respect to certain matters, including, but not limited to, losses arising out of the Company’s breach of such agreements and out of intellectual property infringement claims made by third parties. In these circumstances, payment may be conditional on the other party making a claim pursuant to the procedures specified in the particular contract.
The Company's obligations under these agreements may be limited in terms of time or amount, and in some instances, the Company may have recourse against third parties for certain payments. In addition, the Company has entered into indemnification agreements with its directors and certain of its officers that will require it, among other things, to indemnify them against certain liabilities that may arise by reason of their status or service as directors or officers. The terms of such obligations vary.
It is not possible to make a reasonable estimate of the maximum potential amount of future payments under these or similar agreements due to the conditional nature of the Company’s obligations and the unique facts and circumstances involved in each particular agreement. No amount has been accrued in the accompanying consolidated financial statements with respect to these indemnification obligations.
9. Stockholders’ Equity
Equity Incentive Plans
The Netflix, Inc. 2020 Stock Plan is a stockholder-approved plan that provides for the grant of incentive stock options to employees and for the grant of non-statutory stock options, stock appreciation rights, restricted stock and restricted stock units to employees, directors and consultants.
Stock Option Activity
Stock options are generally vested in full upon the grant date and are exercisable for the full ten-year contractual term regardless of employment status. Stock options granted to certain named executive officers in fiscal years 2023 and 2024 vest on the one-year anniversary of the grant date, subject to the employee’s continuous employment or service with the Company through the vesting date. All executive options subject to a one-year service period have vested as of the first quarter of the current fiscal year.
The following table summarizes the activities related to the Company’s stock options:
| Options Outstanding | |||||||||||||||||||||||
| Number of Shares | Weighted- Average Exercise Price (per share) | ||||||||||||||||||||||
| Balances as of December 31, 2024 | 15,419,002 | $ | 312.48 | ||||||||||||||||||||
| Granted | 213,441 | 1,013.40 | |||||||||||||||||||||
| Exercised | (2,369,871) | 222.74 | |||||||||||||||||||||
| Expired | (1,945) | 68.25 | |||||||||||||||||||||
| Balances as of June 30, 2025 | 13,260,627 | $ | 339.84 | ||||||||||||||||||||
| Vested and exercisable as of June 30, 2025 | 13,260,627 | $ | 339.84 |
Restricted Stock Unit Activity
The Company grants time-based restricted stock unit (“RSU”) awards and performance-based restricted stock unit (“PSU”) awards to certain executive officers. RSU awards vest quarterly over a three-year period subject to the executive’s continued employment or service with the Company through the vesting date. PSU awards have performance periods ranging from one to three years and vest depending on the Company’s achievement of predetermined market-based performance targets.
The following table summarizes the activities related to the Company’s unvested RSUs and PSUs:
| Unvested Restricted Stock Units | |||||||||||
| Number of Shares | Weighted- Average Grant-Date Fair Value (per share) | ||||||||||
| Balances as of December 31, 2024 | 133,318 | $ | 711.23 | ||||||||
| Granted(1) | 122,785 | 1,111.80 | |||||||||
| Vested(1) | (74,447) | 774.68 | |||||||||
| Forfeited | (1,632) | 931.17 | |||||||||
| Balances as of June 30, 2025 | 180,024 | $ | 956.20 |
(1) Amounts include 26,660 PSU awards that were granted and 53,320 PSU awards that vested based on the achievement of market-based performance targets during the performance period ended December 31, 2024, but were settled in the first quarter of 2025.
Stock-based Compensation
Total stock-based compensation expense was $81 million and $153 million for the three and six months ended June 30, 2025, respectively, and $69 million and $145 million for the three and six months ended June 30, 2024, respectively.
Stock Repurchases
In September 2023, the Board of Directors authorized the repurchase of up to $10 billion of the Company’s 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. 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. The Company is 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 the Company’s stock price, general economic, business and market conditions, and alternative investment opportunities. The Company may discontinue any repurchases of its common stock at any time without prior notice. During the three and six months ended June 30, 2025, the Company repurchased 1,524,908 and 5,238,736 shares of common stock, respectively, for an aggregate amount of $1.6 billion and $5.2 billion, respectively (excluding the 1% excise tax on stock repurchases as a result of the Inflation Reduction Act of 2022). As of June 30, 2025, $12.0 billion remains available for repurchases. Shares repurchased by the Company are accounted for when the transaction is settled. As of June 30, 2025, there were no unsettled share repurchases. Direct costs incurred to acquire the shares are included in the total cost of the shares.
Accumulated Other Comprehensive Income (Loss)
The following tables summarize the changes in accumulated balances of other comprehensive income (loss) for the three and six months ended June 30, 2025:
| Foreign Currency Translation Adjustments | Net Investment Hedge Gains (Losses) | Change in Unrealized Gains (Losses) on Cash Flow Hedges | Change in Unrealized Gains (Losses) on Excluded Component of Fair Value Hedges | Change in Unrealized Gains (Losses) on AFS Securities | Tax (Expense) Benefit | Total | |||||||||||||||||||||||||||||||||||
| (in thousands) | |||||||||||||||||||||||||||||||||||||||||
| Balances as of March 31, 2025 | $ | (285,557) | $ | (12,200) | $ | 264,945 | $ | 5,771 | $ | 907 | $ | (59,601) | $ | (85,735) | |||||||||||||||||||||||||||
| Other comprehensive income (loss) before reclassifications | 169,299 | (93,400) | (1,222,145) | (18,099) | (907) | 306,378 | (858,874) | ||||||||||||||||||||||||||||||||||
| Amounts reclassified from accumulated other comprehensive income (loss) | — | — | 37,041 | 14,802 | — | (11,902) | 39,941 | ||||||||||||||||||||||||||||||||||
| Net change in accumulated other comprehensive income (loss) | 169,299 | (93,400) | (1,185,104) | (3,297) | (907) | 294,476 | (818,933) | ||||||||||||||||||||||||||||||||||
| Balances as of June 30, 2025 | $ | (116,258) | $ | (105,600) | $ | (920,159) | $ | 2,474 | $ | — | $ | 234,875 | $ | (904,668) |
| Foreign Currency Translation Adjustments | Net Investment Hedge Gains (Losses) | Change in Unrealized Gains (Losses) on Cash Flow Hedges | Change in Unrealized Gains (Losses) on Excluded Component of Fair Value Hedges | Change in Unrealized Gains (Losses) on AFS Securities | Tax (Expense) Benefit | Total | |||||||||||||||||||||||||||||||||||
| (in thousands) | |||||||||||||||||||||||||||||||||||||||||
| Balances as of December 31, 2024 | $ | (376,833) | $ | 32,400 | $ | 914,369 | $ | 9,233 | $ | 3,260 | $ | (220,267) | $ | 362,162 | |||||||||||||||||||||||||||
| Other comprehensive income (loss) before reclassifications | 260,575 | (138,000) | (1,709,112) | (36,130) | (3,139) | 433,065 | (1,192,741) | ||||||||||||||||||||||||||||||||||
| Amounts reclassified from accumulated other comprehensive income (loss) | — | — | (125,416) | 29,371 | (121) | 22,077 | (74,089) | ||||||||||||||||||||||||||||||||||
| Net change in accumulated other comprehensive income (loss) | 260,575 | (138,000) | (1,834,528) | (6,759) | (3,260) | 455,142 | (1,266,830) | ||||||||||||||||||||||||||||||||||
| Balances as of June 30, 2025 | $ | (116,258) | $ | (105,600) | $ | (920,159) | $ | 2,474 | $ | — | $ | 234,875 | $ | (904,668) |
The following tables summarize the changes in accumulated balances of other comprehensive income (loss) for the three and six months ended June 30, 2024:
| Foreign Currency Translation Adjustments | Net Investment Hedge Gains (Losses) | Change in Unrealized Gains (Losses) on Cash Flow Hedges | Change in Unrealized Gains (Losses) on Excluded Component of Fair Value Hedges | Change in Unrealized Gains (Losses) on AFS Securities | Tax (Expense) Benefit | Total | |||||||||||||||||||||||||||||||||||
| (in thousands) | |||||||||||||||||||||||||||||||||||||||||
| Balances as of March 31, 2024 | $ | (176,974) | $ | — | $ | 84,461 | $ | — | $ | — | $ | (19,366) | $ | (111,879) | |||||||||||||||||||||||||||
| Other comprehensive income (loss) before reclassifications | (72,626) | (3,400) | 160,544 | — | — | (36,031) | 48,487 | ||||||||||||||||||||||||||||||||||
| Amounts reclassified from accumulated other comprehensive income (loss) | — | — | (33,374) | — | — | 7,652 | (25,722) | ||||||||||||||||||||||||||||||||||
| Net change in accumulated other comprehensive income (loss) | (72,626) | (3,400) | 127,170 | — | — | (28,379) | 22,765 | ||||||||||||||||||||||||||||||||||
| Balances as of June 30, 2024 | $ | (249,600) | $ | (3,400) | $ | 211,631 | $ | — | $ | — | $ | (47,745) | $ | (89,114) |
| Foreign Currency Translation Adjustments | Net Investment Hedge Gains (Losses) | Change in Unrealized Gains (Losses) on Cash Flow Hedges | Change in Unrealized Gains (Losses) on Excluded Component of Fair Value Hedges | Change in Unrealized Gains (Losses) on AFS Securities | Tax (Expense) Benefit | Total | |||||||||||||||||||||||||||||||||||
| (in thousands) | |||||||||||||||||||||||||||||||||||||||||
| Balances as of December 31, 2023 | $ | (103,922) | $ | — | $ | (155,730) | $ | — | $ | — | $ | 35,707 | $ | (223,945) | |||||||||||||||||||||||||||
| Other comprehensive income (loss) before reclassifications | (145,678) | (3,400) | 389,688 | — | — | (88,571) | 152,039 | ||||||||||||||||||||||||||||||||||
| Amounts reclassified from accumulated other comprehensive income (loss) | — | — | (22,327) | — | — | 5,119 | (17,208) | ||||||||||||||||||||||||||||||||||
| Net change in accumulated other comprehensive income (loss) | (145,678) | (3,400) | 367,361 | — | — | (83,452) | 134,831 | ||||||||||||||||||||||||||||||||||
| Balances as of June 30, 2024 | $ | (249,600) | $ | (3,400) | $ | 211,631 | $ | — | $ | — | $ | (47,745) | $ | (89,114) |
The following tables summarize the amounts reclassified from AOCI to the Consolidated Statement of Operations for the three and six months ended June 30, 2025:
| Three Months Ended | |||||||||||||||||||||||||||||||||||||||||
| June 30, 2025 | |||||||||||||||||||||||||||||||||||||||||
| Revenues | Cost of Revenues | Interest and other income (expense) | Provision for Income Taxes | Total Reclassifications | |||||||||||||||||||||||||||||||||||||
| (in thousands) | |||||||||||||||||||||||||||||||||||||||||
| Gains (losses) on available-for-sale securities | |||||||||||||||||||||||||||||||||||||||||
| Amount of gains (losses) reclassified from AOCI | $ | — | $ | — | $ | — | $ | — | $ | — | |||||||||||||||||||||||||||||||
| Gains (losses) on derivatives in cash flow hedging relationship | |||||||||||||||||||||||||||||||||||||||||
| Foreign exchange contracts | |||||||||||||||||||||||||||||||||||||||||
| Amount of gains (losses) reclassified from AOCI | (37,385) | 344 | — | 8,504 | (28,537) | ||||||||||||||||||||||||||||||||||||
| Gains (losses) on derivatives in fair value hedging relationship | |||||||||||||||||||||||||||||||||||||||||
| Foreign exchange contracts | |||||||||||||||||||||||||||||||||||||||||
| Amount excluded from assessment of effectiveness and recognized in earnings based on amortization approach | — | — | (14,802) | 3,398 | (11,404) | ||||||||||||||||||||||||||||||||||||
| Total | $ | (37,385) | $ | 344 | $ | (14,802) | $ | 11,902 | $ | (39,941) |
| Six Months Ended | |||||||||||||||||||||||||||||||||||||||||
| June 30, 2025 | |||||||||||||||||||||||||||||||||||||||||
| Revenues | Cost of Revenues | Interest and other income (expense) | Provision for Income Taxes | Total Reclassifications | |||||||||||||||||||||||||||||||||||||
| (in thousands) | |||||||||||||||||||||||||||||||||||||||||
| Gains (losses) on available-for-sale securities | |||||||||||||||||||||||||||||||||||||||||
| Amount of gains (losses) reclassified from AOCI | $ | — | $ | — | $ | 121 | $ | (28) | $ | 93 | |||||||||||||||||||||||||||||||
| Gains (losses) on derivatives in cash flow hedging relationship | |||||||||||||||||||||||||||||||||||||||||
| Foreign exchange contracts | |||||||||||||||||||||||||||||||||||||||||
| Amount of gains (losses) reclassified from AOCI | 127,411 | (1,995) | — | (28,792) | 96,624 | ||||||||||||||||||||||||||||||||||||
| Gains (losses) on derivatives in fair value hedging relationship | |||||||||||||||||||||||||||||||||||||||||
| Foreign exchange contracts | |||||||||||||||||||||||||||||||||||||||||
| Amount excluded from assessment of effectiveness and recognized in earnings based on amortization approach | — | — | (29,371) | 6,743 | (22,628) | ||||||||||||||||||||||||||||||||||||
| Total | $ | 127,411 | $ | (1,995) | $ | (29,250) | $ | (22,077) | $ | 74,089 |
The following tables summarize the amounts reclassified from AOCI to the Consolidated Statement of Operations for the three and six months ended June 30, 2024:
| Three Months Ended | |||||||||||||||||||||||||||||||||||||||||
| June 30, 2024 | |||||||||||||||||||||||||||||||||||||||||
| Revenues | Cost of Revenues | Interest and other income (expense) | Provision for Income Taxes | Total Reclassifications | |||||||||||||||||||||||||||||||||||||
| (in thousands) | |||||||||||||||||||||||||||||||||||||||||
| Gains (losses) on derivatives in cash flow hedging relationship | |||||||||||||||||||||||||||||||||||||||||
| Foreign exchange contracts | |||||||||||||||||||||||||||||||||||||||||
| Amount of gains (losses) reclassified from AOCI | $ | 33,301 | $ | 73 | $ | — | $ | (7,652) | $ | 25,722 | |||||||||||||||||||||||||||||||
| Total | $ | 33,301 | $ | 73 | $ | — | $ | (7,652) | $ | 25,722 |
| Six Months Ended | |||||||||||||||||||||||||||||||||||||||||
| June 30, 2024 | |||||||||||||||||||||||||||||||||||||||||
| Revenues | Cost of Revenues | Interest and other income (expense) | Provision for Income Taxes | Total Reclassifications | |||||||||||||||||||||||||||||||||||||
| (in thousands) | |||||||||||||||||||||||||||||||||||||||||
| Gains (losses) on derivatives in cash flow hedging relationship | |||||||||||||||||||||||||||||||||||||||||
| Foreign exchange contracts | |||||||||||||||||||||||||||||||||||||||||
| Amount of gains (losses) reclassified from AOCI | $ | 22,060 | $ | 267 | $ | — | $ | (5,119) | $ | 17,208 | |||||||||||||||||||||||||||||||
| Total | $ | 22,060 | $ | 267 | $ | — | $ | (5,119) | $ | 17,208 |
10. Income Taxes
| Three Months Ended | Six Months Ended | |||||||||||||||||||||||||
| June 30, 2025 | June 30, 2024 | June 30, 2025 | June 30, 2024 | |||||||||||||||||||||||
| (in thousands, except percentages) | ||||||||||||||||||||||||||
| Provision for income taxes | $ | 506,262 | $ | 366,550 | $ | 829,637 | $ | 648,920 | ||||||||||||||||||
| Effective tax rate | 14 | % | 15 | % | 12 | % | 13 | % |
The effective tax rates for the three and six months ended June 30, 2025 differed from the Federal statutory rate primarily due to the foreign-derived intangible income deduction and excess tax benefits on stock-based compensation.
11. Segment and Geographic Information
The Company operates as one operating segment. The Company's chief operating decision maker ("CODM") is its co-chief executive officers, who review financial information presented on a consolidated basis. The CODM uses consolidated operating margin and net income to assess financial performance and allocate resources. These financial metrics are used by the CODM to make key operating decisions, such as the determination of the rate at which the Company seeks to grow global operating margin and the allocation of budget between cost of revenues, sales and marketing, technology and development, and general and administrative expenses.
The following table presents selected financial information with respect to the Company’s single operating segment for the three and six months ended June 30, 2025 and 2024:
| Three Months Ended | Six Months Ended | ||||||||||||||||||||||
| June 30, 2025 | June 30, 2024 | June 30, 2025 | June 30, 2024 | ||||||||||||||||||||
| (in thousands) | |||||||||||||||||||||||
| Revenues | $ | 11,079,166 | $ | 9,559,310 | $ | 21,621,967 | $ | 18,929,750 | |||||||||||||||
| Less: | |||||||||||||||||||||||
| Content amortization | 3,832,074 | 3,769,690 | 7,655,186 | 7,440,495 | |||||||||||||||||||
| Other cost of revenues | 1,493,237 | 1,404,453 | 2,933,272 | 2,710,721 | |||||||||||||||||||
| Sales and marketing | 713,265 | 644,084 | 1,401,635 | 1,298,424 | |||||||||||||||||||
| Technology and development | 824,683 | 711,254 | 1,647,506 | 1,413,727 | |||||||||||||||||||
| General and administrative | 441,213 | 426,992 | 862,675 | 831,012 | |||||||||||||||||||
| Operating income | 3,774,694 | 2,602,837 | 7,121,693 | 5,235,371 | |||||||||||||||||||
| Operating margin | 34.1 | % | 27.2 | % | 32.9 | % | 27.7 | % | |||||||||||||||
| Other income (expense) | |||||||||||||||||||||||
| Interest expense | (182,649) | (167,986) | (366,821) | (341,300) | |||||||||||||||||||
| Interest and other income (expense)(1) | 39,630 | 79,005 | 90,529 | 234,364 | |||||||||||||||||||
| Income before income taxes | 3,631,675 | 2,513,856 | 6,845,401 | 5,128,435 | |||||||||||||||||||
| Provision for income taxes | (506,262) | (366,550) | (829,637) | (648,920) | |||||||||||||||||||
| Net income | $ | 3,125,413 | $ | 2,147,306 | $ | 6,015,764 | $ | 4,479,515 |
(1) Includes interest income of $72 million and $154 million, respectively, for the three and six months ended June 30, 2025, and $63 million and $130 million, respectively, for the three and six months ended June 30, 2024.
See the consolidated financial statements for other financial information regarding the Company’s operating segment.
Total U.S. revenues were $4.6 billion and $8.9 billion, respectively, for the three and six months ended June 30, 2025, and $4.0 billion and $7.9 billion, respectively, for the three and six months ended June 30, 2024. See Note 2 Revenue Recognition for additional information about revenues by region.
The Company's long-lived tangible assets, as well as the Company's operating lease right-of-use assets recognized on the Consolidated Balance Sheets as of June 30, 2025 and December 31, 2024, were located as follows:
| As of | |||||||||||
| June 30, 2025 | December 31, 2024 | ||||||||||
| (in thousands) | |||||||||||
| United States | $ | 2,853,087 | $ | 2,769,828 | |||||||
| International | 1,065,822 | 926,238 |
12. Subsequent Event
The One Big Beautiful Bill Act (“OBBBA”) was enacted on July 4, 2025 and the Company continues to evaluate the impact on its financial position. The OBBBA is not currently expected to materially impact the Company’s effective tax rate or cash flows in the current fiscal year.
Next: Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations