Netflix 10-Q 2026-09-30

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 September 30, 2026

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)

(408) 540-3700

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

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.

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 September 30, 2026, there were 4,106,325,903 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)

Showing the first 8K of 123K characters. Open the full section

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, profitability, and memberships; liquidity, including the sufficiency of our capital resources, net cash provided by (used in) operating activities, access to financing sources and free cash flows; capital allocation strategies, including any stock repurchases or repurchase programs; stock price volatility; impact of foreign exchange rate fluctuations, including on net income and revenues; expectations regarding hedging activity; impact of interest rate fluctuations; adequacy of existing facilities; future regulatory changes and their impact on our business; intellectual property; cybersecurity; price changes and testing; accounting treatment for changes related to content assets; acquisitions; actions by competitors; partnerships; advertising; member viewing patterns; dividends; future contractual obligations, including unknown content obligations and timing of payments; our global content and marketing investments, including investments in original programming, consumer products and experiences; impact of work stoppages; content amortization; resolution of tax examinations; tax expense; unrecognized tax

benefits; deferred tax assets; resolution of disputes and other proceedings; our ability to effectively manage change and growth; our company culture; and our ability to attract and retain qualified employees and key personnel. These forward-looking statements are subject to risks and uncertainties that could cause actual results and events to differ materially from those included in forward-looking statements. Factors that might cause or contribute to such differences include, but are not limited to, those discussed in our Annual Report on Form 10-K for the year ended December 31, 2025 filed with the Securities and Exchange Commission (“SEC”) on January 23, 2026, in particular the risk factors discussed under the heading “Risk Factors” in Part I, Item 1A.

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

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

Overview

We are one of the world’s leading entertainment services offering TV series, films, games and live programming across a wide variety of genres and languages. Members can play, pause and resume watching as much as they want, anytime, anywhere, and can change their plans at any time.

Our core strategy is to grow our business globally within the parameters of our operating margin target. We strive to continuously improve our members’ experience by offering compelling content that delights them and attracts new members. We aim to offer a range of streaming plans, including our ad-supported subscription, to meet a variety of consumer needs. We seek to drive conversation around our content to further enhance member joy, and we are continuously enhancing our user interface to help our members more easily choose content that they will find enjoyable.

Results of Operations

The following represents our consolidated performance highlights:

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

Operating margin for the three months ended September 30, 2026 increased by over six percentage points as compared to the prior comparative period. The increase in operating margin was driven by a decrease in cost of revenues and revenue growth outpacing the growth in sales and marketing and general and administrative expenses, partially offset by technology and development expenses growing at a faster rate than revenues.

Net income for the three months ended September 30, 2026 increased by $1,117 million as compared to the prior comparative period, primarily due to a $1,210 million increase in operating income, driven by a $1,364 million increase in revenues and an $85 million decrease in cost of revenues. The impact of higher operating income was partially offset by a $90 million increase in the provision for income taxes.

Revenues

We primarily derive revenues from monthly subscription fees for services related to streaming content to our members. We offer a variety of streaming plans, including our ad-supported subscription, with multiple pricing tiers that vary by country and the features of the plan. As of September 30, 2026, pricing on our streaming plans ranged from the U.S. dollar equivalent of $1 to $37 per month, and pricing on our extra member accounts ranged from the U.S. dollar equivalent of $2 to $10 per month. We expect that from time to time the prices of our streaming plans in each country may change and we may test other plan and price variations. The prices of our streaming plans, and periodic changes to these prices, may impact growth in memberships and the plans that both new and existing members choose, including the number of members that select our ad-supported subscription.

We also earn revenues from advertisements presented on our streaming service, consumer products and experiences, and various other sources.

Three months ended September 30, 2026 as compared to the three months ended September 30, 2025

Revenues for the three months ended September 30, 2026 increased 12% as compared to the three months ended September 30, 2025, primarily due to the growth in subscription revenue of $1,057 million, which reflects increases in memberships and pricing, and an increase of $256 million in advertising revenue. The $1,364 million increase in revenues includes a favorable impact of $101 million from changes in foreign exchange rates, net of hedging.

Nine months ended September 30, 2026 as compared to the nine months ended September 30, 2025

Revenues for the nine months ended September 30, 2026 increased 14% as compared to the nine months ended September 30, 2025, primarily due to the growth in subscription revenue of $3,472 million, which reflects increases in memberships and pricing, and an increase of $864 million in advertising revenue. The $4,552 million increase in revenues includes a favorable impact of $508 million from changes in foreign exchange rates, net of hedging.

Revenues earned from other sources did not materially impact total revenues for the three and nine months ended September 30, 2026.

The following tables summarize revenues by region for the three and nine months ended September 30, 2026 and 2025. Total revenues are inclusive of hedging losses of $(1) million and $(181) million for the three and nine months ended September 30, 2026, respectively, and $(129) million and $(2) million for the three and nine months ended September 30, 2025, respectively. See Note 8 Derivative Financial Instruments and Hedging Activities to the consolidated financial statements for further information regarding the Company’s derivative and non-derivative financial instruments.

Three months ended September 30, 2026 as compared to the three months ended September 30, 2025

Nine months ended September 30, 2026 as compared to the nine months ended September 30, 2025

Non-GAAP Constant Currency Information

We believe the non-GAAP financial measure of constant currency revenue is useful in analyzing period-to-period comparisons in revenues 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 revenue, we calculate current period revenue assuming foreign exchange rates had remained constant with foreign exchange rates from each of the corresponding months of the prior-year period and exclude the impact of hedging gains or losses realized as revenues. Constant currency percentage change in revenues is calculated as the percentage change between current period constant currency revenue and the prior comparative period revenue. The impact of hedging gains or losses is excluded from both the current and prior periods.

The tables below summarize constant currency revenues by region for the three and nine months ended September 30, 2026 and the constant currency percentage change in revenues by region for the three and nine months ended September 30, 2026 as compared to the three and nine months ended September 30, 2025:

Cost of Revenues

Cost of revenues primarily consists of the amortization of content assets. Other costs of revenues include expenses associated with the acquisition, licensing and production of content, streaming delivery costs, and other operating costs.

Expenses related to the acquisition, licensing and production of content not included in content amortization may include payroll, stock-based compensation, facilities, and other personnel-related 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 are primarily related to our global content delivery network (“Open Connect”). We have built our own Open Connect network 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 operating 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 September 30, 2026 as compared to the three months ended September 30, 2025

The decrease in cost of revenues was primarily due to a decrease in other cost of revenues, driven by lower non-income tax expenses as the prior year period includes a $619 million expense related to non-income tax assessments in Brazil. The decrease in other cost of revenues was partially offset by a $233 million increase in content amortization relating to our existing and new content. No individual component of the remaining change in cost of revenues was material.

Nine months ended September 30, 2026 as compared to the nine months ended September 30, 2025

The increase in cost of revenues was primarily due to a $1,107 million increase in content amortization relating to our existing and new content. No individual component of the remaining increase in cost of revenues was material.

Sales and Marketing

Sales and marketing expenses consist primarily of expenses for promotional activities such as digital and television advertising, and certain payments made to marketing and advertising sales partners. Our marketing partners include consumer electronics manufacturers, multichannel video programming distributors, mobile operators, and internet service providers. Our advertising sales partners include advertising technology providers and advertising agencies. Sales and marketing expenses also include payroll, stock-based compensation, facilities, and other related expenses for personnel that support advertising sales and marketing activities.

Three months ended September 30, 2026 as compared to the three months ended September 30, 2025

The increase in sales and marketing expenses was primarily driven by a $42 million increase in personnel-related costs, primarily due to the growth in advertising sales headcount.

Nine months ended September 30, 2026 as compared to the nine months ended September 30, 2025

The increase in sales and marketing expenses was primarily driven by a $196 million increase in marketing expenses, coupled with a $137 million increase in personnel-related costs, primarily due to the growth in advertising sales headcount.

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 and infrastructure. Technology and development expenses also include costs associated with general use computer hardware and software.

Three months ended September 30, 2026 as compared to the three months ended September 30, 2025

The increase in technology and development expenses was primarily due to a $136 million increase in personnel-related costs.

Nine months ended September 30, 2026 as compared to the nine months ended September 30, 2025

The increase in technology and development expenses was primarily due to a $383 million increase in personnel-related costs.

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 September 30, 2026 as compared to the three months ended September 30, 2025

General and administrative expenses for the three months ended September 30, 2026 as compared to the three months ended September 30, 2025 remained relatively flat.

Nine months ended September 30, 2026 as compared to the nine months ended September 30, 2025

The increase in general and administrative expenses was primarily due to a $126 million increase in personnel-related costs and a $91 million increase in third-party expenses, driven by higher legal fees and transaction-related costs, including those associated with the WBD transaction.

Interest Expense

Interest expense consists primarily of the interest associated with our outstanding debt obligations and the amortization of debt issuance costs. See Note 7 Debt in the accompanying notes to our consolidated financial statements for further detail on our debt obligations.

Three months ended September 30, 2026 as compared to the three months ended September 30, 2025

Nine months ended September 30, 2026 as compared to the nine months ended September 30, 2025

Interest expense, net of hedging impacts, primarily consisted of interest on our Notes of $184 million and $535 million for the three and nine months ended September 30, 2026, respectively. The increase in interest expense for the three months ended September 30, 2026 as compared to the three months ended September 30, 2025 was due to the increase in debt. The increase in interest expense for the nine months ended September 30, 2026 as compared to the nine months ended September 30, 2025 was primarily driven by higher amortization of debt issuance costs, including approximately $85 million recognized in connection with the termination of financing arrangements associated with the WBD transaction in the first quarter of 2026. See Note 7 Debt for additional details regarding the termination of financing arrangements associated with the WBD transaction.

Interest and Other Income (Expense)

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

Three months ended September 30, 2026 as compared to the three months ended September 30, 2025

Interest and other income (expense) increased in the three months ended September 30, 2026 primarily due to a $3 million increase in interest income earned in the three months ended September 30, 2026 as compared to the corresponding period in 2025.

Nine months ended September 30, 2026 as compared to the nine months ended September 30, 2025

Interest and other income (expense) increased in the nine months ended September 30, 2026, primarily due to a $2.8 billion termination fee received in connection with the termination of the WBD transaction in the first quarter of 2026. See Note 6 Acquisitions for further information.

Provision for Income Taxes

Three months ended September 30, 2026 as compared to the three months ended September 30, 2025

Nine months ended September 30, 2026 as compared to the nine months ended September 30, 2025

The decrease in the effective tax rate for the three months ended September 30, 2026, as compared to the same period in 2025, was primarily due to an increase in U.S. federal research and development tax credit benefits. The increase in the effective tax rate for the nine months ended September 30, 2026, as compared to the same period in 2025, was primarily due to a decrease in tax benefits associated with lower excess tax benefits on stock-based compensation as well as lower foreign-derived income deduction relative to the growth in income before income taxes.

Liquidity and Capital Resources

Cash, cash equivalents, restricted cash and short-term investments decreased $841 million in the nine months ended September 30, 2026, primarily due to the repurchases of stock, purchases of property and equipment and cash paid for acquisitions, partially offset by cash provided by operations and proceeds from the issuance of debt. Cash provided by operations in the nine months ended September 30, 2026 includes the receipt of a $2.8 billion termination fee in connection with the termination of the WBD transaction in the first quarter of 2026. See Note 6 Acquisitions for further information.

Debt, net of debt issuance costs, discounts and hedging impacts, increased $670 million primarily due to the issuance of debt, partially offset by the remeasurement of our Euro-denominated notes in the nine months ended September 30, 2026 and fair value hedging adjustments. The amount of principal and interest on our outstanding notes due in the next twelve months is $3,194 million. See Note 7 Debt in the accompanying notes to our consolidated financial statements.

Uses of Cash

Our primary uses of cash include the acquisition, licensing and production of content, marketing programs, streaming delivery, and personnel-related costs. 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. Our other uses of cash include strategic acquisitions and investments, as well as share repurchases.

Financing Arrangements

On April 12, 2024, we entered into a five-year, $3 billion unsecured revolving credit facility that matures on April 12, 2029 (the “Revolving Credit Agreement”). In May 2025, we established a $3 billion commercial paper program (the “Commercial Paper Program”) under which we may issue short-term unsecured commercial paper notes. As of September 30, 2026, no amounts have been borrowed under the Revolving Credit Agreement or the Commercial Paper Program.

On February 27, 2026, upon the termination of the Amended and Restated Merger Agreement, all related financing arrangements to fund the previously proposed WBD transaction were terminated in accordance with their respective terms. No amounts had been borrowed under any of the financing arrangements and the related expenses were not material.

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.

Share Repurchases

In March 2021, the Company’s Board of Directors authorized a share repurchase program for the Company’s common stock with no expiration date. The Board subsequently approved additional repurchase authorizations in September 2023 and December 2024, and most recently in April 2026, authorized the repurchase of an additional $25 billion of the Company’s common stock. 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 nine months ended September 30, 2026, the Company repurchased 130,349,765 shares of common stock for an aggregate amount of $10.7 billion (excluding the 1% excise tax on stock repurchases as a result of the Inflation Reduction Act of 2022). As of September 30, 2026, $22.3 billion remains available for repurchases.

Material Cash Requirements

We currently anticipate that cash flows from operations, available funds and access to financing sources, including our Revolving Credit Facility and Commercial Paper Program, 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 September 30, 2026, the expected timing of those payments are as follows:

(1)As of September 30, 2026, content obligations were comprised of $3.9 billion included in “Current content liabilities” and $1.7 billion of “Non-current content liabilities” on the Consolidated Balance Sheets and $19.6 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 7 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 September 30, 2026 as compared to the three months ended September 30, 2025

Net cash provided by operating activities for the three months ended September 30, 2026 increased $337 million as compared to the corresponding period in 2025, primarily driven by a $1,117 million increase in net income and a $437 million increase in adjustments for non-cash expenses, partially offset by $780 million in unfavorable changes in working capital and a $437 million increase in payments for content assets.

Net cash used in investing activities for the three months ended September 30, 2026 increased $375 million as compared to the corresponding period in 2025, primarily due to a net decrease of $225 million in cash flows from maturities, sales and purchases of investments. In addition, purchases of property and equipment increased $114 million in the three months ended September 30, 2026 as compared to the three months ended September 30, 2025.

Net cash used in financing activities for the three months ended September 30, 2026 increased $2,018 million as compared to the corresponding period in 2025, primarily due to a $2,940 million increase in repurchases of common stock, partially offset by $993 million of proceeds from the issuance of debt in the current period.

Nine months ended September 30, 2026 as compared to the nine months ended September 30, 2025

Net cash provided by operating activities for the nine months ended September 30, 2026 increased $2,159 million as compared to the corresponding period in 2025, primarily driven by a $3,785 million increase in net income which includes a $2.8 billion termination fee received in connection with the termination of the WBD transaction in the first quarter of 2026 recorded in “Interest and other income (expense),” and a $1,910 million increase in adjustments for non-cash expenses, partially offset by a $2,337 million increase in payments for content assets and $1,200 million in unfavorable changes in working capital. Changes in working capital includes $729 million of non-routine payments made in connection with non-income tax assessments in Brazil for prior tax periods.

Net cash used in investing activities for the nine months ended September 30, 2026 increased $2,630 million as compared to the corresponding period in 2025, primarily driven by a net decrease of $1,800 million in cash flows from maturities, sales and purchases of investments, coupled with net cash outflows for acquisitions for an aggregate amount of $586 million in the nine months ended September 30, 2026, as compared to no acquisition-related cash flows in the corresponding period in 2025. In addition, purchases of property and equipment increased $245 million in the nine months ended September 30, 2026 as compared to the nine months ended September 30, 2025.

Net cash used in financing activities for the nine months ended September 30, 2026 increased $1,387 million as compared to the corresponding period in 2025, primarily driven by a $3,734 million increase in repurchases of common stock, partially offset by no repayments of debt in the nine months ended September 30, 2026, as compared to $1,833 million in repayments of debt in the corresponding period in 2025, as well as proceeds from the issuance of debt of $993 million in the nine months ended September 30, 2026. In addition, proceeds from

the issuance of common stock decreased $407 million in the nine months ended September 30, 2026 as compared to the nine months ended September 30, 2025.

Indemnification

The information set forth under Note 9 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, 2025, 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, 2025.

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

Interest Rate Risk

As of September 30, 2026, our cash equivalents were generally invested in money market funds and time deposits. Interest earned on such funds fluctuates with the prevailing interest rate.

As of September 30, 2026, we had $15.3 billion of debt, consisting of fixed rate unsecured debt in thirteen tranches due between 2026 and 2054. Refer to Note 7 Debt to the consolidated financial statements for details about all issuances. The fair value of our debt will fluctuate with movements of interest rates, increasing in periods of declining rates of interest and declining in periods of increasing rates of interest. The fair value of our debt will also fluctuate based on changes in foreign currency rates, as discussed below.

As of September 30, 2026, we have entered into interest rate swap agreements with an aggregate notional amount of $2,400 million, which we designated as fair value hedges of specifically identified tranches of our fixed-rate Senior Notes. Under these agreements, we pay a floating rate based on the Secured Overnight Financing Rate (“SOFR”) and receive a fixed rate equal to the contractual coupon of the designated hedged debt, effectively converting $2,400 million of fixed-rate debt to floating-rate debt. Refer to Note 8, Derivative Financial Instruments and Hedging Activities, for further information. As a result of these hedging activities, we are exposed to variability in interest expense from changes in SOFR on the hedged notional amount. A 1% increase in SOFR as of September 30, 2026, would increase our annual interest expense by approximately $24 million. For our remaining fixed-rate debt not subject to an interest rate swap, interest expense is contractually fixed and will not be affected by changes in market interest rates; however, the fair value of that debt will continue to fluctuate with changes in market interest rates as noted above.

Foreign Currency Risk

We operate our business globally and transact in multiple currencies. Currencies denominated in other than the U.S. dollar accounted for 57% of revenue and 30% of operating expenses for the nine months ended September 30, 2026. We therefore have foreign currency risk related to these currencies, which are primarily the Euro, British pound, Brazilian real, Mexican peso, Canadian dollar, and Argentine peso.

Accordingly, volatility in exchange rates and, in particular, a weakening of foreign currencies relative to the U.S. dollar may negatively affect our revenue and operating income as expressed in U.S. dollars. Our revenues, on a constant currency basis, would have been approximately $506 million lower for the nine months ended September 30, 2026 than our reported revenues of $37,684 million. See Part I, Item 2, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” for further information regarding our non-GAAP financial measure of constant currency.

We enter into foreign exchange forward contracts to mitigate fluctuations in forecasted U.S. dollar-equivalent revenues from changes in foreign currency exchange rates. These contracts may reduce, but do not entirely eliminate, the effect of foreign currency exchange fluctuations, and we may choose not to hedge certain exposures. We designate these contracts as cash flow hedges of forecasted foreign currency revenue and initially record the gains or losses on these derivative instruments as a component of accumulated other comprehensive income (“AOCI”) and reclassify the amounts into “Revenues” on the Consolidated Statements of Operations in the same period the forecasted transaction affects earnings. If the U.S. dollar weakened by 10% as of September 30, 2026 and December 31, 2025, the amount recorded in AOCI related to our foreign exchange contracts, before taxes, would have been approximately $2,423 million and $2,296 million lower, respectively. This adverse change in AOCI would be expected to offset a corresponding favorable foreign currency change in the underlying forecasted revenues when recognized in earnings.

We enter into foreign exchange forward contracts to mitigate fluctuations in forecasted and firmly committed U.S. dollar-equivalent transactions related to the licensing and production of content assets from changes in foreign currency exchange rates. These contracts may reduce, but do not entirely eliminate, the effect of foreign currency exchange fluctuations, and we may choose not to hedge certain exposures. We designate these contracts as cash flow hedges and initially record the gains or losses on these derivative instruments as a component of AOCI and reclassify the amounts into “Cost of Revenues” to offset the hedged exposures as they affect earnings, which occurs as the underlying hedged content assets are amortized. If the U.S. dollar strengthened by 10% as of September 30, 2026 and December 31, 2025, the amount recorded in AOCI related to our foreign exchange contracts, before taxes, would have been approximately $307 million and $237 million lower, respectively. This adverse change in AOCI would be expected to offset a corresponding favorable foreign currency change in the underlying exposures when recognized in earnings.

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

We have also experienced and will continue to experience fluctuations in our net income as a result of gains (losses) on the settlement and the remeasurement of monetary assets and liabilities denominated in currencies that are not the functional currency. We enter into foreign

exchange forward contracts to mitigate the foreign exchange risk on intercompany transactions and monetary assets and liabilities that are not denominated in the functional currencies of the Company and its subsidiaries. These contracts may reduce, but do not entirely eliminate, the effect of foreign currency exchange fluctuations, and we may choose not to hedge certain exposures. Certain contracts are not designated as hedging instruments and the gains or losses on these derivative instruments are recorded in “Interest and other income (expense)” in the Consolidated Statements of Operations. We also designate certain contracts as fair value hedges to mitigate the foreign exchange risk on the remeasurement of our foreign-currency denominated debt. The gains or losses on these derivative instruments included in the assessment of hedge effectiveness are recorded in “Interest and other income (expense),” net with the offsetting foreign currency remeasurement gains and losses on the hedged items. If an adverse change in exchange rates of 10% was applied to our monetary assets and liabilities denominated in currencies other than the functional currencies as of September 30, 2026 and December 31, 2025, income before income taxes would have been approximately $76 million and $1 million lower, respectively, after considering the offsetting impact of the foreign currency exchange contracts and our net investment hedges.

Evaluation of Disclosure Controls and Procedures

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

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

Changes in Internal Control Over Financial Reporting

There were no changes in our internal control over financial reporting that occurred during the quarter ended September 30, 2026, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II. OTHER INFORMATION

The information set forth under Note 9 Commitments and Contingencies in the notes to the consolidated financial statements under the caption “Legal Proceedings” is incorporated herein by reference.

There have been no material changes from the risk factors previously disclosed under the heading “Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025.

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

Company Purchases of Equity Securities

Stock repurchases during the three months ended September 30, 2026 were as follows:

Rule 10b5-1 Trading Plans

The adoption or termination of contracts, instructions or written plans for the purchase or sale of our securities by our Section 16 officers and directors for the three months ended September 30, 2026, each of which is intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) under the Exchange Act (“Rule 10b5-1 Plan”), were as follows:

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

(a) Exhibits:

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

EXHIBIT INDEX

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

SIGNATURES

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