Cover and table of contents

123K characters. Original on sec.gov ·

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 September 30, 2026

☐ 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 September 30, 2026, there were 4,106,325,903 shares of the registrant’s common stock, par value $0.001, outstanding.

Table of Contents


		Page
	Part I. Financial Information
Item 1.	Consolidated Financial Statements

	Consolidated Statements of Operations	3
	Consolidated Statements of Comprehensive Income	4
	Consolidated Statements of Cash Flows	5
	Consolidated Balance Sheets	6
	Consolidated Statements of Stockholders’ Equity	7
	Notes to Consolidated Financial Statements	8
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	26
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	38
Item 4.	Controls and Procedures	39
	Part II. Other Information
Item 1.	Legal Proceedings	39
Item 1A.	Risk Factors	40
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	40
Item 5.	Other Information	40
Item 6.	Exhibits	40
Exhibit Index		41
Signatures		41

NETFLIX, INC.

Consolidated Statements of Operations

(unaudited)

(in thousands, except per share data)


	Three Months Ended				Nine Months Ended
	September 30, 2026		September 30, 2025		September 30, 2026		September 30, 2025
Revenues	$	12,874,176	$	11,510,307	$	37,683,871	$	33,132,274
Cost of revenues	6,079,016		6,164,250		18,004,219		16,752,708
Sales and marketing	837,051		786,295		2,503,106		2,187,930
Technology and development	1,033,142		853,584		3,000,513		2,501,090
General and administrative	466,367		457,931		1,567,826		1,320,606
Operating income	4,458,600		3,248,247		12,608,207		10,369,940
Other income (expense):
Interest expense	(184,701)		(175,294)		(622,463)		(542,115)
Interest and other income (expense)	43,006		36,457		2,946,833		126,986
Income before income taxes	4,316,905		3,109,410		14,932,577		9,954,811
Provision for income taxes	(652,978)		(562,494)		(2,584,445)		(1,392,131)
Net income	$	3,663,927	$	2,546,916	$	12,348,132	$	8,562,680

Earnings per share:
Basic	$	0.89	$	0.60	$	2.95	$	2.01
Diluted	$	0.87	$	0.59	$	2.90	$	1.97
Weighted-average shares of common stock outstanding:
Basic	4,134,463		4,244,553		4,181,861		4,256,350
Diluted	4,195,127		4,340,392		4,251,298		4,352,844

See accompanying notes to the consolidated financial statements.

NETFLIX, INC.

Consolidated Statements of Comprehensive Income

(unaudited)

(in thousands)


	Three Months Ended				Nine Months Ended
	September 30, 2026		September 30, 2025		September 30, 2026		September 30, 2025
Net income	$	3,663,927	$	2,546,916	$	12,348,132	$	8,562,680
Other comprehensive income (loss):
Foreign currency translation adjustments, net of income tax benefit (expense) of $(3) million, $0.5 million, $(15) million, and $32 million, respectively	29,345		(51,361)		(19,984)		102,895
Net change in unrealized gains (losses) on available-for-sale securities, net of income tax benefit (expense) of $0, $0, $0, and $1 million, respectively	—		—		—		(2,511)
Cash flow hedges:
Net unrealized gains (losses)	56,945		141,622		445,454		(1,175,122)
Reclassification of net (gains) losses included in net income	1,844		98,391		140,324		1,767
Net change, net of income tax benefit (expense) of $(18) million, $(72) million, $(176) million, and $350 million, respectively	58,789		240,013		585,778		(1,173,355)
Fair value hedges:
Net change in unrealized gains (losses) excluded from the assessment of effectiveness, net of income tax benefit (expense) of $0.1 million, $1 million, $(2) million, and $3 million, respectively	(469)		(3,240)		5,136		(8,447)
Total other comprehensive income (loss)	87,665		185,412		570,930		(1,081,418)
Comprehensive income	$	3,751,592	$	2,732,328	$	12,919,062	$	7,481,262

See accompanying notes to the consolidated financial statements.

NETFLIX, INC.

Consolidated Statements of Cash Flows

(unaudited)

(in thousands)


	Three Months Ended				Nine Months Ended
	September 30, 2026		September 30, 2025		September 30, 2026		September 30, 2025
Cash flows from operating activities:
Net income	$	3,663,927	$	2,546,916	$	12,348,132	$	8,562,680
Adjustments to reconcile net income to net cash provided by operating activities:
Additions to content assets	(5,159,790)		(4,653,935)		(14,934,230)		(12,039,405)
Change in content liabilities	93,508		24,262		(43,070)		(601,043)
Amortization of content assets	4,235,454		4,002,744		12,764,663		11,657,930
Depreciation and amortization of property, equipment and intangibles	107,100		87,326		306,205		247,406
Stock-based compensation expense	133,723		80,986		405,440		233,825
Foreign currency remeasurement loss (gain) on debt	(9,162)		(1,707)		(28,085)		82,078
Other non-cash items	119,748		142,293		459,331		377,162
Deferred income taxes	182,054		20,539		322,133		(279,144)
Changes in operating assets and liabilities:
Other current assets	(136,415)		(169,597)		(729,342)		(477,647)
Accounts payable	46,211		139,451		(111,032)		(125,929)
Accrued expenses and other liabilities	85,509		707,151		131,620		746,329
Deferred revenue	(17,823)		(3,686)		3,903		203,862
Other non-current assets and liabilities	(181,765)		(97,569)		(699,372)		(550,473)
Net cash provided by operating activities	3,162,279		2,825,174		10,196,296		8,037,631
Cash flows from investing activities:
Purchases of property and equipment	(278,766)		(164,719)		(693,540)		(448,885)

Acquisitions	—		—		(585,744)		—
Purchases of investments	(52,545)		(3,850)		(52,545)		(161,515)

Proceeds from maturities and sales of investments	—		176,250		—		1,908,617
Other investing activities	—		36,190		—		—
Net cash provided by (used in) investing activities	(331,311)		43,871		(1,331,829)		1,298,217
Cash flows from financing activities:
Proceeds from issuance of debt	992,550		—		992,550		—

Repayments of debt	—		—		—		(1,833,450)
Proceeds from issuance of common stock	74,674		70,215		183,964		590,883
Repurchases of common stock	(4,796,725)		(1,856,885)		(10,781,716)		(7,047,608)
Taxes paid related to net share settlement of equity awards	(5,165)		(6,196)		(41,026)		(40,180)
Other financing activities	(20,306)		55,837		(9,185)		62,142
Net cash used in financing activities	(3,754,972)		(1,737,029)		(9,655,413)		(8,268,213)
Effect of exchange rate changes on cash, cash equivalents and restricted cash	18,995		(21,721)		(50,471)		415,896
Net increase (decrease) in cash, cash equivalents and restricted cash	(905,009)		1,110,295		(841,417)		1,483,531
Cash, cash equivalents and restricted cash at beginning of period	9,102,786		8,180,573		9,039,194		7,807,337
Cash, cash equivalents and restricted cash at end of period	$	8,197,777	$	9,290,868	$	8,197,777	$	9,290,868

See accompanying notes to the consolidated financial statements.

NETFLIX, INC.

Consolidated Balance Sheets

(in thousands, except share and par value data)


	As of
	September 30, 2026		December 31, 2025
	(unaudited)
Assets
Current assets:
Cash and cash equivalents	$	8,194,275	$	9,033,681
Short-term investments	28,678		28,678
Other current assets	4,999,384		3,957,832
Total current assets	13,222,337		13,020,191
Content assets, net	34,605,477		32,778,392
Property and equipment, net	2,560,619		2,004,350
Other non-current assets	8,293,521		7,794,060
Total assets	$	58,681,954	$	55,596,993
Liabilities and Stockholders’ Equity
Current liabilities:
Current content liabilities	$	3,885,069	$	4,084,854
Accounts payable	860,098		900,612
Accrued expenses and other liabilities	3,301,264		3,220,869
Deferred revenue	1,779,633		1,775,730
Short-term debt	2,474,796		998,865
Total current liabilities	12,300,860		10,980,930
Non-current content liabilities	1,723,034		1,579,476
Long-term debt	12,657,598		13,463,971
Other non-current liabilities	2,714,209		2,957,128
Total liabilities	29,395,701		28,981,505
Commitments and contingencies (Note 9)
Stockholders’ equity:
Common stock, $0.001 par value; 49,900,000,000 shares authorized at September 30, 2026 and December 31, 2025; 4,106,325,903 and 4,222,162,150 issued and outstanding at September 30, 2026 and December 31, 2025, respectively	7,898,264		7,286,410
Treasury stock at cost (477,363,677 and 346,541,145 shares at September 30, 2026 and December 31, 2025, respectively)	(33,232,809)		(22,372,658)
Accumulated other comprehensive loss	(9,452)		(580,382)
Retained earnings	54,630,250		42,282,118
Total stockholders’ equity	29,286,253		26,615,488
Total liabilities and stockholders’ equity	$	58,681,954	$	55,596,993

See accompanying notes to the consolidated financial statements.

NETFLIX, INC.

Consolidated Statements of Stockholders’ Equity

(unaudited)

(in thousands)


	Three Months Ended				Nine Months Ended
	September 30, 2026		September 30, 2025		September 30, 2026		September 30, 2025
Total stockholders’ equity, beginning balances	$	30,152,052	$	24,951,899	$	26,615,488	$	24,743,567

Common stock and additional paid-in capital:
Beginning balances	$	7,670,503	$	6,932,828	$	7,286,410	$	6,252,126
Issuance of common stock	94,038		66,511		206,414		594,374
Stock-based compensation expense	133,723		80,986		405,440		233,825
Ending balances	$	7,898,264	$	7,080,325	$	7,898,264	$	7,080,325

Treasury stock:
Beginning balances	$	(28,387,657)	$	(18,392,942)	$	(22,372,658)	$	(13,171,638)
Repurchases of common stock to be held as treasury stock	(4,845,152)		(1,877,689)		(10,860,151)		(7,098,993)
Ending balances	$	(33,232,809)	$	(20,270,631)	$	(33,232,809)	$	(20,270,631)

Accumulated other comprehensive income (loss):
Beginning balances	$	(97,117)	$	(904,668)	$	(580,382)	$	362,162
Other comprehensive income (loss)	87,665		185,412		570,930		(1,081,418)
Ending balances	$	(9,452)	$	(719,256)	$	(9,452)	$	(719,256)

Retained earnings:
Beginning balances	$	50,966,323	$	37,316,681	$	42,282,118	$	31,300,917
Net income	3,663,927		2,546,916		12,348,132		8,562,680
Ending balances	$	54,630,250	$	39,863,597	$	54,630,250	$	39,863,597

Total stockholders’ equity, ending balances	$	29,286,253	$	25,954,035	$	29,286,253	$	25,954,035

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, 2025 filed with the Securities and Exchange Commission (the “SEC”) on January 23, 2026. 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, 2025. Interim results are not necessarily indicative of the results for a full year.

Stock Split

On November 14, 2025, the Company completed a ten-for-one forward stock split of the Company’s issued common stock (the “Stock Split”). Each shareholder as of the record date of November 10, 2025 received nine additional shares of common stock for every share held. References made to share or per share amounts in the accompanying consolidated financial statements and applicable disclosures have been retroactively adjusted to reflect the Stock Split.

Significant Accounting Policies

The following is provided to update the Company’s significant accounting policies previously described in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025.

Derivative Financial Instruments and Hedging Activities

The Company uses derivative and non-derivative instruments to manage foreign exchange risk and interest rate risk related to its ongoing business operations.

Interest Rate Risk

Fair value hedges

The Company enters into interest rate swap agreements to manage its exposure to changes in the fair value of its fixed-rate debt attributable to changes in the benchmark interest rate. These hedges may reduce, but do not entirely eliminate, the effect of interest rate movements, and the Company may choose not to hedge the full amount of its exposure. The Company designates these agreements as fair value hedges of specifically identified tranches of its fixed-rate debt. Changes in the fair value of the interest rate swap instruments are recognized in “Interest expense” on the Consolidated Statements of Operations, net with the offsetting changes in the fair value of the designated hedged debt attributable to changes in the benchmark interest rate. Net periodic settlements between the Company and its swap counterparties are recognized as adjustments to “Interest expense” in the period in which they accrue. Cash flows from hedging activities are classified within “Net cash provided by operating activities” on the Consolidated Statements of Cash Flows, consistent with the classification of interest payments on the hedged debt.

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.

Recently issued accounting pronouncements not yet adopted

In November 2024, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“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.

In December 2025, the FASB issued ASU 2025-10, Government Grants (Topic 832): Accounting for Government Grants Received by Business Entities, which establishes authoritative guidance on the recognition, measurement, presentation, and disclosure of government grants. Under ASU 2025-10, government grants are recognized when it is probable that the entity will both comply with the conditions of the grant and the grant will be received. The ASU provides specific accounting models for grants related to assets and grants related to income, including options to recognize government grants as deferred income or as a reduction of the asset’s cost basis. The ASU also requires enhanced disclosures regarding the nature of government grants, significant terms and conditions, accounting policies applied, and amounts recognized in the financial statements. ASU 2025-10 is effective for fiscal years beginning after December 15, 2028, including interim periods within those fiscal years, with early adoption permitted. The Company is currently evaluating the impact of adopting ASU 2025-10.

In December 2025, the FASB issued ASU 2025-11, Interim Reporting (Topic 270): Narrow-Scope Improvements, which clarifies the guidance in Topic 270 to improve the consistency of interim financial reporting. The ASU provides a comprehensive list of required interim disclosures and introduces a disclosure principle requiring entities to disclose events since the end of the last annual reporting period that have a material impact on the entity. ASU 2025-11 is effective for fiscal years beginning after December 15, 2027, including interim periods within those fiscal years, with early adoption permitted. The Company is currently evaluating the impact of adopting ASU 2025-11.

2. Revenue Recognition

The following table summarizes revenues by region for the three and nine months ended September 30, 2026 and September 30, 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 for further information.


	Three Months Ended				Nine Months Ended
	September 30, 2026		September 30, 2025		September 30, 2026		September 30, 2025
	(in thousands)
United States and Canada (UCAN)	$	5,628,215	$	5,071,781	$	16,305,180	$	14,617,882
Europe, Middle East, and Africa (EMEA)	4,106,572		3,699,052		12,138,506		10,641,903
Latin America (LATAM)	1,602,603		1,370,913		4,683,951		3,939,582
Asia-Pacific (APAC)	1,536,786		1,368,561		4,556,234		3,932,907
Total Revenues	$	12,874,176	$	11,510,307	$	37,683,871	$	33,132,274

Deferred revenue consists primarily of prepaid subscription fees for streaming plans that have been billed and not yet recognized as revenue, as well as gift cards that have not been fully redeemed. As of September 30, 2026, total deferred revenue was $1,780 million, the vast majority of which was related to prepaid subscription fees billed that are expected to be recognized as revenue within the next month. Deferred revenue balances relating to gift cards will be recognized over the service period following redemption, which is expected to occur over the next 12 months. Deferred revenue increased $4 million from $1,776 million as of December 31, 2025 to $1,780 million as of September 30, 2026. Deferred revenue balances may fluctuate due to the number of paid memberships and the price of our streaming plans.

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 outstanding 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				Nine Months Ended
	September 30, 2026		September 30, 2025		September 30, 2026		September 30, 2025
	(in thousands, except per share data)
Basic earnings per share:
Net income	$	3,663,927	$	2,546,916	$	12,348,132	$	8,562,680
Shares used in computation:
Weighted-average shares of common stock outstanding	4,134,463		4,244,553		4,181,861		4,256,350
Basic earnings per share	$	0.89	$	0.60	$	2.95	$	2.01

Diluted earnings per share:
Net income	$	3,663,927	$	2,546,916	$	12,348,132	$	8,562,680
Shares used in computation:
Weighted-average shares of common stock outstanding	4,134,463		4,244,553		4,181,861		4,256,350
Effect of dilutive stock-based awards	60,664		95,839		69,437		96,494
Weighted-average number of shares	4,195,127		4,340,392		4,251,298		4,352,844
Diluted earnings per share	$	0.87	$	0.59	$	2.90	$	1.97

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		Nine Months Ended
	September 30, 2026	September 30, 2025	September 30, 2026	September 30, 2025
	(in thousands)
Stock-based awards	9,228	296	7,078	326

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 September 30, 2026 and December 31, 2025:


	As of September 30, 2026
	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	$	4,271,312	$	—	$	—	$	4,271,312	$	4,267,872	$	—	$	3,358	$	82
Level 1 securities:
Money market funds	2,352,508		—		—		2,352,508		2,352,446		—		—		62
Level 2 securities:
Time deposits	1,602,635		—		—		1,602,635		1,573,957		28,678		—		—

	$	8,226,455	$	—	$	—	$	8,226,455	$	8,194,275	$	28,678	$	3,358	$	144


	As of December 31, 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	$	5,214,163	$	—	$	—	$	5,214,163	$	5,208,710	$	—	$	5,369	$	84
Level 1 securities:
Money market funds	3,259,240		—		—		3,259,240		3,259,180		—		—		60
Level 2 securities:
Time deposits	594,469		—		—		594,469		565,791		28,678		—		—
	$	9,067,872	$	—	$	—	$	9,067,872	$	9,033,681	$	28,678	$	5,369	$	144

Other current assets and non-current assets primarily consist of restricted cash for deposits related to self-insurance. The fair value of AFS 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 7 Debt and Note 8 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
	September 30, 2026		December 31, 2025
	(in thousands)
Licensed content, net	$	12,508,405	$	12,138,578

Produced content, net
Released, less amortization	10,369,622		10,687,444
In production	10,905,673		9,210,735
In development and pre-production	821,777		741,635
	22,097,072		20,639,814

Content assets, net	$	34,605,477	$	32,778,392

The following table summarizes the amortization of content assets:


	Three Months Ended				Nine Months Ended
	September 30, 2026		September 30, 2025		September 30, 2026		September 30, 2025
	(in thousands)
Licensed content	$	2,271,145	$	2,253,603	$	6,817,921	$	6,262,335
Produced content	1,964,309		1,749,141		5,946,742		5,395,595
Total	$	4,235,454	$	4,002,744	$	12,764,663	$	11,657,930

Property and Equipment, Net

Property and equipment and accumulated depreciation consisted of the following:


	As of
	September 30, 2026		December 31, 2025		Estimated Useful Lives
	(in thousands)
Land	$	155,870	$	155,664
Buildings and improvements	559,410		537,082		30 years
Leasehold improvements	1,398,853		1,263,051		Over life of lease
Furniture and fixtures	165,931		157,984		3 years
Information technology	718,399		572,407		3-5 years
Corporate aircraft	185,660		99,164		8-10 years
Machinery and equipment	46,808		30,879		3-5 years
Capital work-in-progress	602,158		285,010
Property and equipment, gross	3,833,089		3,101,241
Less: Accumulated depreciation	(1,272,470)		(1,096,891)
Property and equipment, net	$	2,560,619	$	2,004,350

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				Nine Months Ended
	September 30, 2026		September 30, 2025		September 30, 2026		September 30, 2025
	(in thousands)
Cash paid for operating lease liabilities	$	137,673	$	108,787	$	412,197	$	356,708
Right-of-use assets obtained in exchange for new operating lease obligations	40,845		235,513		89,711		447,040


	As of
	September 30, 2026		December 31, 2025
	(in thousands)
Operating lease right-of-use assets, net	$	1,969,057	$	2,207,161

Current operating lease liabilities	435,730		460,475
Non-current operating lease liabilities	1,816,507		2,052,526
Total operating lease liabilities	$	2,252,237	$	2,513,001

Other Current Assets

Other current assets consisted of the following:


	As of
	September 30, 2026		December 31, 2025
	(in thousands)
Trade receivables	$	2,060,374	$	2,031,476
Prepaid expenses	593,552		498,054
Other	2,345,458		1,428,302
Total other current assets	$	4,999,384	$	3,957,832

6. Acquisitions

In March 2026, the Company completed an acquisition which was accounted for as a business combination for a total purchase price of approximately $587 million, consisting of cash consideration.

On December 4, 2025, the Company entered into a definitive agreement and plan of merger with Warner Bros. Discovery, Inc. (“WBD”), to acquire WBD’s streaming and studios businesses, including its film and television studios, HBO Max and HBO (such transaction, the “WBD transaction”), which was then amended by the parties thereto on January 19, 2026 (as so amended and restated, the “Amended and Restated Merger Agreement”).

On February 27, 2026, WBD provided notice to the Company that it had terminated the Amended and Restated Merger Agreement in accordance with its terms in order to enter into an Agreement and Plan of Merger with Paramount Skydance Corporation (“PSKY”). Concurrently with the termination of the Amended and Restated Merger Agreement and entry into such agreement between WBD and PSKY, PSKY, on behalf of WBD, paid a $2.8 billion termination fee owed to Netflix in accordance with the terms of the Amended and Restated Merger Agreement. The $2.8 billion termination fee received was recorded in “Interest and other income (expense)” in the Company’s Consolidated Statements of Operations during the first quarter of 2026.

7. Debt

As of September 30, 2026, the Company had aggregate outstanding notes of $15,132 million, net of $59 million of issuance costs and discounts and $145 million of fair value hedging adjustments, with varying maturities (the “Notes”). Of the outstanding balance, $2,475 million, net of issuance costs, is classified as short-term debt on the Consolidated Balance Sheets. As of December 31, 2025, the Company had aggregate outstanding notes of $14,463 million, net of $56 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) and is remeasured into U.S. dollars at each balance sheet date (with remeasurement gain, net of hedging impacts, totaling $9 million and $28 million for the three and nine months ended September 30, 2026, 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.

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 September 30, 2026 and December 31, 2025:


	Principal Amount at Par						Level 2 Fair Value as of
	September 30, 2026		December 31, 2025		Issuance Date	Maturity	September 30, 2026		December 31, 2025
	(in millions)						(in millions)
4.375% Senior Notes	$	1,000	$	1,000	October 2016	November 2026	$	1,000	$	1,006
3.625% Senior Notes(1)	1,476		1,526		May 2017	May 2027	1,480		1,550
4.875% Senior Notes	1,600		1,600		October 2017	April 2028	1,595		1,634
5.875% Senior Notes	1,900		1,900		April 2018	November 2028	1,926		1,998
4.625% Senior Notes(1)	1,249		1,292		October 2018	May 2029	1,275		1,363
6.375% Senior Notes	800		800		October 2018	May 2029	820		857
3.875% Senior Notes(1)	1,363		1,409		April 2019	November 2029	1,361		1,455
5.375% Senior Notes	900		900		April 2019	November 2029	900		939
3.625% Senior Notes(1)	1,249		1,292		October 2019	June 2030	1,235		1,322
4.875% Senior Notes	1,000		1,000		October 2019	June 2030	978		1,025
4.900% Senior Notes(2)	1,000		1,000		August 2024	August 2034	942		1,025
5.250% Senior Notes(2)	1,000		—		July 2026	August 2036	946		—
5.400% Senior Notes(2)	800		800		August 2024	August 2054	700		777
	$	15,337	$	14,519			$	15,158	$	14,951

(1) The following Senior Notes have a principal amount denominated in Euros: 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.

(2) As of September 30, 2026, the Company designated a portion of its 4.900% Senior Notes, 5.250% Senior Notes, and 5.400% Senior Notes as the hedged items in fair value hedging relationships for interest rate risk, using interest rate swap agreements as the hedging instruments. Under these agreements, the Company pays a floating interest rate based on the Secured Overnight Financing Rate (“SOFR”), effectively converting the fixed-rate debt to floating-rate debt. The floating interest rate on the hedged tranches will vary with changes in SOFR. See Note 8 Derivative Financial Instruments and Hedging Activities for further details.

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 (if any). The Notes include, among other terms and conditions, limitations on the Company’s ability to 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 require the Company to offer to repurchase the Notes at a purchase price in cash equal to 101% of the principal plus accrued interest in the event of a change of control accompanied by a decline in the ratings of the Notes and limit the ability of the Company and certain of its subsidiaries to create, incur or allow certain liens, enter into sale and lease-back transactions and create, assume, incur or guarantee additional indebtedness of certain of the Company’s subsidiaries. As of September 30, 2026 and December 31, 2025, 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 September 30, 2026, 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 September 30, 2026 and December 31, 2025, 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 September 30, 2026.

WBD Financing

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.

8. 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.

The Company also uses derivative instruments to manage interest rate risk, with the primary objective of reducing its exposure to changes in the fair value of its fixed-rate debt attributable to changes in the benchmark interest rate.

Notional Amount of Derivative Contracts

The net notional amounts of the Company’s outstanding derivative instruments were as follows:


	As of
	September 30, 2026		December 31, 2025
	(in thousands)
Derivatives designated as hedging instruments:
Foreign exchange contracts
Cash flow hedges	$	22,719,064	$	21,066,760
Fair value hedges	2,926,246		2,884,792
Interest rate contracts
Fair value hedges	2,400,000		—
Derivatives not designated as hedging instruments:
Foreign exchange contracts	1,556,156		1,555,502
Total	$	29,601,466	$	25,507,054

Foreign Exchange Contracts

As of September 30, 2026 and December 31, 2025, approximately $1.8 billion and $1.9 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 September 30, 2026 and December 31, 2025, the carrying amount of the Company’s Euro-denominated Senior Notes (included in “Short-term debt” and “Long-term debt” on the Company’s Consolidated Balance Sheets), which was designated as the hedged items in fair value hedges, was approximately $2.8 billion and $2.9 billion, respectively.

See Note 7 Debt for further information on the Company’s debt obligations.

Interest Rate Contracts

As of September 30, 2026, the carrying amount of the Company’s Senior Notes (included in “Long-term debt” on the Company’s Consolidated Balance Sheets), which was designated as the hedged items in fair value hedges of interest rate risk was approximately $2.2 billion. The related cumulative fair value hedging adjustments included in the carrying amount of the hedged Senior Notes was approximately $(145) million. No Senior Notes were designated as the hedged items in fair value hedges of interest rate risk as of December 31, 2025.

Fair Value of Derivative Contracts

The fair value of the Company’s outstanding derivative instruments was as follows:


	As of September 30, 2026
	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	$	372,293	$	261,029	$	278,754	$	78,126
Interest rate contracts	1,123		—		—		145,158
Derivatives not designated as hedging instruments:
Foreign exchange contracts	46,915		—		26,964		—
Total	$	420,331	$	261,029	$	305,718	$	223,284


	As of December 31, 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	$	192,828	$	88,985	$	426,341	$	214,574
Interest rate contracts	—		—		—		—
Derivatives not designated as hedging instruments:
Foreign exchange contracts	3,463		—		11,704		—
Total	$	196,291	$	88,985	$	438,045	$	214,574

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 September 30, 2026, the pre-tax net accumulated gain 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 $193 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 and interest rate 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 September 30, 2026
							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	$	681,360	$	—	$	681,360	$	(498,881)	$	—	$	182,479
Derivative liabilities	529,002		—		529,002		(498,881)		—		30,121


	As of December 31, 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	$	285,276	$	—	$	285,276	$	(282,469)	$	—	$	2,807
Derivative liabilities	652,619		—		652,619		(282,469)		—		370,150

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				Nine Months Ended
	September 30, 2026		September 30, 2025		September 30, 2026		September 30, 2025
	(in thousands)
Cash flow hedges:
Foreign exchange contracts
Amount included in the assessment of effectiveness	$	74,072	$	183,823	$	579,440	$	(1,525,289)
Fair value hedges:
Foreign exchange contracts
Amount excluded from the assessment of effectiveness	(11,545)		(18,895)		(28,900)		(55,025)
Net investment hedges:
Foreign currency-denominated debt
Amount included in the assessment of effectiveness	12,157		(2,320)		62,743		(140,320)
Total	$	74,684	$	162,608	$	613,283	$	(1,720,634)

The following tables present the effects of the Company’s derivative instruments and related hedged items on the Consolidated Statements of Operations:


	Three Months Ended
	September 30, 2026
	Revenues		Cost of Revenues		Interest Expense		Interest and Other Income (Expense)
	(in thousands)
Total amounts presented in the Consolidated Statements of Operations	$	12,874,176	$	6,079,016	$	(184,701)	$	43,006

Losses on derivatives in cash flow hedging relationship
Foreign exchange contracts
Amount of losses reclassified from AOCI	(713)		(1,686)		—		—
Gains (losses) on derivatives in fair value hedging relationship
Foreign exchange contracts
Hedged items	—		—		—		18,617
Derivatives designated as hedging instruments	—		—		—		(13,909)
Amount excluded from assessment of effectiveness and recognized in earnings based on amortization approach	—		—		—		(10,934)
Interest rate contracts
Hedged items	—		—		131,348		—
Derivatives designated as hedging instruments	—		—		(131,348)		—
Amount recognized in earnings on net periodic settlements	—		—		896		—
Losses on derivatives not designated as hedging instruments
Foreign exchange contracts	—		—		—		(19,097)


	Three Months Ended
	September 30, 2025
	Revenues		Cost of Revenues		Interest Expense		Interest and Other Income (Expense)
	(in thousands)
Total amounts presented in the Consolidated Statements of Operations	$	11,510,307	$	6,164,250	$	(175,294)	$	36,457

Gains (losses) on derivatives in cash flow hedging relationship
Foreign exchange contracts
Amount of gains (losses) reclassified from AOCI	(129,365)		1,655		—		—
Gains (losses) on derivatives in fair value hedging relationship
Foreign exchange contracts
Hedged items	—		—		—		(4,091)
Derivatives designated as hedging instruments	—		—		—		5,896
Amount excluded from assessment of effectiveness and recognized in earnings based on amortization approach	—		—		—		(14,690)
Interest rate contracts
Hedged items	—		—		—		—
Derivatives designated as hedging instruments	—		—		—		—
Amount recognized in earnings on net periodic settlements	—		—		—		—
Losses on derivatives not designated as hedging instruments
Foreign exchange contracts	—		—		—		(9,396)


	Nine Months Ended
	September 30, 2026
	Revenues		Cost of Revenues		Interest Expense		Interest and Other Income (Expense)
	(in thousands)
Total amounts presented in the Consolidated Statements of Operations	$	37,683,871	$	18,004,219	$	(622,463)	$	2,946,833

Losses on derivatives in cash flow hedging relationship
Foreign exchange contracts
Amount of losses reclassified from AOCI	(180,860)		(1,673)		—		—
Gains (losses) on derivatives in fair value hedging relationship
Foreign exchange contracts
Hedged items	—		—		—		96,085
Derivatives designated as hedging instruments	—		—		—		(90,897)
Amount excluded from assessment of effectiveness and recognized in earnings based on amortization approach	—		—		—		(35,581)
Interest rate contracts
Hedged items	—		—		145,157		—
Derivatives designated as hedging instruments	—		—		(145,157)		—
Amount recognized in earnings on net periodic settlements	—		—		1,132		—
Losses on derivatives not designated as hedging instruments
Foreign exchange contracts	—		—		—		(19,416)


	Nine Months Ended
	September 30, 2025
	Revenues		Cost of Revenues		Interest Expense		Interest and Other Income (Expense)
	(in thousands)
Total amounts presented in the Consolidated Statements of Operations	$	33,132,274	$	16,752,708	$	(542,115)	$	126,986

Losses on derivatives in cash flow hedging relationship
Foreign exchange contracts
Amount of losses reclassified from AOCI	(1,954)		(340)		—		—
Gains (losses) on derivatives in fair value hedging relationship
Foreign exchange contracts
Hedged items	—		—		—		(469,478)
Derivatives designated as hedging instruments	—		—		—		479,523
Amount excluded from assessment of effectiveness and recognized in earnings based on amortization approach	—		—		—		(44,061)
Interest rate contracts
Hedged items	—		—		—		—
Derivatives designated as hedging instruments	—		—		—		—
Amount recognized in earnings on net periodic settlements	—		—		—		—
Losses on derivatives not designated as hedging instruments
Foreign exchange contracts	—		—		—		(80,367)

9. Commitments and Contingencies

Content

As of September 30, 2026, the Company had $25.2 billion of obligations 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 yet meet the criteria for recognition.

As of December 31, 2025, the Company had $24.0 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 $18.4 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
	September 30, 2026		December 31, 2025
	(in thousands)
Less than one year	$	11,776,580	$	11,528,030
Due after one year and through three years	9,895,575		8,376,160
Due after three years and through five years	3,027,909		3,041,538
Due after five years	522,736		1,093,500
Total content obligations	$	25,222,800	$	24,039,228

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.

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.

10. 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.

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, 2025	127,679,804	$	36.07
Granted	6,571,326	84.84
Exercised	(14,023,403)	14.72
Expired	(52,610)	9.77
Balances as of September 30, 2026	120,175,117	$	41.24
Vested and exercisable as of September 30, 2026	120,175,117	$	41.24

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, 2025	1,585,260	$	98.68
Granted(1)	1,245,383	82.91
Vested(1)	(962,882)	78.32
Forfeited	—	—
Balances as of September 30, 2026	1,867,761	$	98.66

(1) Amounts include 264,300 PSU awards that were granted and 528,600 PSU awards that vested based on the achievement of market-based performance targets during the performance period ended December 31, 2025, but were settled in the first quarter of 2026.

Stock-Based Compensation

Total stock-based compensation expense was $134 million and $405 million for the three and nine months ended September 30, 2026, respectively, and $81 million and $234 million for the three and nine months ended September 30, 2025, respectively.

Stock 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. 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 nine months ended September 30, 2026, the Company repurchased 63,917,979 and 130,349,765 shares of common stock, respectively, for an aggregate amount of $4.8 billion and $10.7 billion, respectively (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. Shares repurchased by the Company are accounted for when the transaction is settled. As of September 30, 2026, 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 nine months ended September 30, 2026:


	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 June 30, 2026	$	(281,833)	$	(61,670)	$	296,213	$	3,727	$	—	$	(53,554)	$	(97,117)
Other comprehensive income (loss) before reclassifications	19,999		12,157		74,072		(11,545)		—		(17,268)		77,415
Amounts reclassified from accumulated other comprehensive income (loss)	—		—		2,399		10,934		—		(3,083)		10,250
Net change in accumulated other comprehensive income (loss)	19,999		12,157		76,471		(611)		—		(20,351)		87,665
Balances as of September 30, 2026	$	(261,834)	$	(49,513)	$	372,684	$	3,116	$	—	$	(73,905)	$	(9,452)


	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, 2025	$	(193,615)	$	(112,256)	$	(389,289)	$	(3,565)	$	—	$	118,343	$	(580,382)
Other comprehensive income (loss) before reclassifications	(68,219)		62,743		579,440		(28,900)		—		(141,812)		403,252
Amounts reclassified from accumulated other comprehensive income (loss)	—		—		182,533		35,581		—		(50,436)		167,678
Net change in accumulated other comprehensive income (loss)	(68,219)		62,743		761,973		6,681		—		(192,248)		570,930
Balances as of September 30, 2026	$	(261,834)	$	(49,513)	$	372,684	$	3,116	$	—	$	(73,905)	$	(9,452)

The following tables summarize the changes in accumulated balances of other comprehensive income (loss) for the three and nine months ended September 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 June 30, 2025	$	(116,258)	$	(105,600)	$	(920,159)	$	2,474	$	—	$	234,875	$	(904,668)
Other comprehensive income (loss) before reclassifications	(49,574)		(2,320)		183,823		(18,895)		—		(37,330)		75,704
Amounts reclassified from accumulated other comprehensive income (loss)	—		—		127,710		14,690		—		(32,692)		109,708
Net change in accumulated other comprehensive income (loss)	(49,574)		(2,320)		311,533		(4,205)		—		(70,022)		185,412
Balances as of September 30, 2025	$	(165,832)	$	(107,920)	$	(608,626)	$	(1,731)	$	—	$	164,853	$	(719,256)


	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	211,001		(140,320)		(1,525,289)		(55,025)		(3,139)		395,735		(1,117,037)
Amounts reclassified from accumulated other comprehensive income (loss)	—		—		2,294		44,061		(121)		(10,615)		35,619
Net change in accumulated other comprehensive income (loss)	211,001		(140,320)		(1,522,995)		(10,964)		(3,260)		385,120		(1,081,418)
Balances as of September 30, 2025	$	(165,832)	$	(107,920)	$	(608,626)	$	(1,731)	$	—	$	164,853	$	(719,256)

The following tables summarize the amounts reclassified from AOCI to the Consolidated Statements of Operations for the three and nine months ended September 30, 2026:


	Three Months Ended
	September 30, 2026
	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	(713)		(1,686)		—		555		(1,844)
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	—		—		(10,934)		2,528		(8,406)
Total	$	(713)	$	(1,686)	$	(10,934)	$	3,083	$	(10,250)


	Nine Months Ended
	September 30, 2026
	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	(180,860)		(1,673)		—		42,209		(140,324)
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	—		—		(35,581)		8,227		(27,354)
Total	$	(180,860)	$	(1,673)	$	(35,581)	$	50,436	$	(167,678)

The following tables summarize the amounts reclassified from AOCI to the Consolidated Statements of Operations for the three and nine months ended September 30, 2025:


	Three Months Ended
	September 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	(129,365)		1,655		—		29,319		(98,391)
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	—		—		(14,690)		3,373		(11,317)
Total	$	(129,365)	$	1,655	$	(14,690)	$	32,692	$	(109,708)


	Nine Months Ended
	September 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	(1,954)		(340)		—		527		(1,767)
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	—		—		(44,061)		10,116		(33,945)
Total	$	(1,954)	$	(340)	$	(43,940)	$	10,615	$	(35,619)

11. Income Taxes


	Three Months Ended						Nine Months Ended
	September 30, 2026			September 30, 2025			September 30, 2026			September 30, 2025
	(in thousands, except percentages)
Provision for income taxes	$	652,978		$	562,494		$	2,584,445		$	1,392,131
Effective tax rate	15		%	18		%	17		%	14		%

The effective tax rates for the three and nine months ended September 30, 2026 differed from the Federal statutory rate primarily due to the foreign-derived income deduction and excess tax benefits on stock-based compensation.

12. 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 nine months ended September 30, 2026 and 2025:


	Three Months Ended						Nine Months Ended
	September 30, 2026			September 30, 2025			September 30, 2026			September 30, 2025
	(in thousands)
Revenues	$	12,874,176		$	11,510,307		$	37,683,871		$	33,132,274
Less:
Content amortization	4,235,454			4,002,744			12,764,663			11,657,930
Other cost of revenues	1,843,562			2,161,506			5,239,556			5,094,778
Sales and marketing	837,051			786,295			2,503,106			2,187,930
Technology and development	1,033,142			853,584			3,000,513			2,501,090
General and administrative	466,367			457,931			1,567,826			1,320,606
Operating income	4,458,600			3,248,247			12,608,207			10,369,940
Operating margin	34.6		%	28.2		%	33.5		%	31.3		%

Other income (expense)
Interest expense	(184,701)			(175,294)			(622,463)			(542,115)
Interest and other income (expense)(1)	43,006			36,457			2,946,833			126,986
Income before income taxes	4,316,905			3,109,410			14,932,577			9,954,811
Provision for income taxes	(652,978)			(562,494)			(2,584,445)			(1,392,131)
Net income	$	3,663,927		$	2,546,916		$	12,348,132		$	8,562,680

(1) Interest and other income (expense) for the nine months ended September 30, 2026 includes a $2.8 billion termination fee received during the first quarter of 2026 in connection with the termination of the WBD transaction. Interest and other income (expense) also includes interest income of $70 million and $222 million, respectively, for the three and nine months ended September 30, 2026, and $67 million and $221 million, respectively, for the three and nine months ended September 30, 2025.

See the consolidated financial statements for other financial information regarding the Company’s operating segment.

Total U.S. revenues were $5.3 billion and $15.2 billion, respectively, for the three and nine months ended September 30, 2026, and $4.7 billion and $13.6 billion, respectively, for the three and nine months ended September 30, 2025. 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 September 30, 2026 and December 31, 2025, were located as follows:


	As of
	September 30, 2026		December 31, 2025
	(in thousands)
United States	$	3,345,183	$	3,075,477
International	1,184,493		1,136,034

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