nflx-20230331

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 March 31, 2023

☐ 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 March 31, 2023, there were 444,536,878 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	18
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	27
Item 4.	Controls and Procedures	27
	Part II. Other Information
Item 1.	Legal Proceedings	28
Item 1A.	Risk Factors	29
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	29
Item 6.	Exhibits	29
Exhibit Index		30
Signatures		30

Table of Contents

NETFLIX, INC.

Consolidated Statements of Operations

(unaudited)

(in thousands, except per share data)


	Three Months Ended
	March 31, 2023		March 31, 2022
Revenues	$	8,161,503	$	7,867,767
Cost of revenues	4,803,625		4,284,705
Marketing	555,362		555,978
Technology and development	687,275		657,530
General and administrative	400,924		397,928
Operating income	1,714,317		1,971,626
Other income (expense):
Interest expense	(174,239)		(187,579)
Interest and other income (expense)	(71,204)		195,645
Income before income taxes	1,468,874		1,979,692
Provision for income taxes	(163,754)		(382,245)
Net income	$	1,305,120	$	1,597,447

Earnings per share:
Basic	$	2.93	$	3.60
Diluted	$	2.88	$	3.53
Weighted-average shares of common stock outstanding:
Basic	445,244		444,146
Diluted	452,417		452,984

See accompanying notes to the consolidated financial statements.

Table of Contents

NETFLIX, INC.

Consolidated Statements of Comprehensive Income

(unaudited)

(in thousands)


	Three Months Ended
	March 31, 2023		March 31, 2022
Net income	$	1,305,120	$	1,597,447
Other comprehensive income (loss):
Foreign currency translation adjustments	25,611		(33,675)

Comprehensive income	$	1,330,731	$	1,563,772

See accompanying notes to the consolidated financial statements.

Table of Contents

NETFLIX, INC.

Consolidated Statements of Cash Flows

(unaudited)

(in thousands)


	Three Months Ended
	March 31, 2023		March 31, 2022
Cash flows from operating activities:
Net income	$	1,305,120	$	1,597,447
Adjustments to reconcile net income to net cash provided by operating activities:
Additions to content assets	(2,458,666)		(3,584,164)
Change in content liabilities	(354,791)		(347,149)
Amortization of content assets	3,459,984		3,166,365
Depreciation and amortization of property, equipment and intangibles	90,335		74,602
Stock-based compensation expense	99,099		119,209
Foreign currency remeasurement loss (gain) on debt	80,651		(161,821)
Other non-cash items	120,008		101,968
Deferred income taxes	(98,782)		(68,906)
Changes in operating assets and liabilities:
Other current assets	(88,522)		41,157
Accounts payable	(89,668)		(215,444)
Accrued expenses and other liabilities	185,299		350,763
Deferred revenue	(2,390)		16,743
Other non-current assets and liabilities	(68,937)		(167,931)
Net cash provided by operating activities	2,178,740		922,839
Cash flows from investing activities:
Purchases of property and equipment	(62,019)		(121,158)

Acquisitions	—		(124,521)
Purchases of short-term investments	(201,634)		—
Net cash used in investing activities	(263,653)		(245,679)
Cash flows from financing activities:


Repayments of debt	—		(700,000)
Proceeds from issuance of common stock	26,028		13,678
Repurchases of common stock	(400,101)		—
Net cash used in financing activities	(374,073)		(686,322)
Effect of exchange rate changes on cash, cash equivalents and restricted cash	26,423		(11,448)
Net increase (decrease) in cash, cash equivalents and restricted cash	1,567,437		(20,610)
Cash, cash equivalents and restricted cash at beginning of period	5,170,582		6,055,111
Cash, cash equivalents and restricted cash at end of period	$	6,738,019	$	6,034,501

See accompanying notes to the consolidated financial statements.

Table of Contents

NETFLIX, INC.

Consolidated Balance Sheets

(in thousands, except share and par value data)


	As of
	March 31, 2023		December 31, 2022
	(unaudited)
Assets
Current assets:
Cash and cash equivalents	$	6,714,594	$	5,147,176
Short-term investments	1,112,910		911,276
Other current assets	2,655,119		3,208,021
Total current assets	10,482,623		9,266,473
Content assets, net	32,349,184		32,736,713
Property and equipment, net	1,413,094		1,398,257
Other non-current assets	5,245,444		5,193,325
Total assets	$	49,490,345	$	48,594,768
Liabilities and Stockholders’ Equity
Current liabilities:
Current content liabilities	$	4,344,580	$	4,480,150
Accounts payable	591,987		671,513
Accrued expenses and other liabilities	1,718,069		1,514,650
Deferred revenue	1,262,271		1,264,661
Short-term debt	399,163		—
Total current liabilities	8,316,070		7,930,974
Non-current content liabilities	2,908,029		3,081,277
Long-term debt	14,037,965		14,353,076
Other non-current liabilities	2,400,085		2,452,040
Total liabilities	27,662,149		27,817,367
Commitments and contingencies (Note 7)
Stockholders’ equity:
Common stock, $0.001 par value; 4,990,000,000 shares authorized at March 31, 2023 and December 31, 2022; 444,536,878 and 445,346,776 issued and outstanding at March 31, 2023 and December 31, 2022, respectively	4,762,395		4,637,601
Treasury stock at cost (2,786,534 and 1,564,478 shares at March 31, 2023 and December 31, 2022, respectively)	(1,228,920)		(824,190)
Accumulated other comprehensive loss	(191,695)		(217,306)
Retained earnings	18,486,416		17,181,296
Total stockholders’ equity	21,828,196		20,777,401
Total liabilities and stockholders’ equity	$	49,490,345	$	48,594,768

See accompanying notes to the consolidated financial statements.

Table of Contents

NETFLIX, INC.

Consolidated Statements of Stockholders’ Equity

(unaudited)

(in thousands)


	Three Months Ended
	March 31, 2023		March 31, 2022
Total stockholders' equity, beginning balances	$	20,777,401	$	15,849,248

Common stock and additional paid-in capital:
Beginning balances	$	4,637,601	$	4,024,561

SEC Form 10-Q filed by Netflix Inc.