nflx-20240331

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, 2024

☐ 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, 2024, there were 430,964,991 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	22
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	31
Item 4.	Controls and Procedures	32
	Part II. Other Information
Item 1.	Legal Proceedings	32
Item 1A.	Risk Factors	33
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	33
Item 5.	Other Information	33
Item 6.	Exhibits	33
Exhibit Index		34
Signatures		34

Table of Contents

NETFLIX, INC.

Consolidated Statements of Operations

(unaudited)

(in thousands, except per share data)


	Three Months Ended
	March 31, 2024		March 31, 2023
Revenues	$	9,370,440	$	8,161,503
Cost of revenues	4,977,073		4,803,625
Marketing	654,340		555,362
Technology and development	702,473		687,275
General and administrative	404,020		400,924
Operating income	2,632,534		1,714,317
Other income (expense):
Interest expense	(173,314)		(174,239)
Interest and other income (expense)	155,359		(71,204)
Income before income taxes	2,614,579		1,468,874
Provision for income taxes	(282,370)		(163,754)
Net income	$	2,332,209	$	1,305,120

Earnings per share:
Basic	$	5.40	$	2.93
Diluted	$	5.28	$	2.88
Weighted-average shares of common stock outstanding:
Basic	432,090		445,244
Diluted	441,654		452,417

See accompanying notes to the consolidated financial statements.

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NETFLIX, INC.

Consolidated Statements of Comprehensive Income

(unaudited)

(in thousands)


	Three Months Ended
	March 31, 2024		March 31, 2023
Net income	$	2,332,209	$	1,305,120
Other comprehensive income:
Foreign currency translation adjustments	(73,052)		25,611
Cash flow hedges:
Net unrealized gains	176,604		—
Reclassification of net losses included in net income	8,514		—
Net change, net of income tax expense of $55 million and $0, respectively	185,118		—
Total other comprehensive income	112,066		25,611
Comprehensive income	$	2,444,275	$	1,330,731

See accompanying notes to the consolidated financial statements.

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NETFLIX, INC.

Consolidated Statements of Cash Flows

(unaudited)

(in thousands)


	Three Months Ended
	March 31, 2024		March 31, 2023
Cash flows from operating activities:
Net income	$	2,332,209	$	1,305,120
Adjustments to reconcile net income to net cash provided by operating activities:
Additions to content assets	(3,728,967)		(2,458,666)
Change in content liabilities	(189,441)		(354,791)
Amortization of content assets	3,670,805		3,459,984
Depreciation and amortization of property, equipment and intangibles	87,234		90,335
Stock-based compensation expense	76,345		99,099
Foreign currency remeasurement loss (gain) on debt	(130,801)		80,651
Other non-cash items	97,181		120,008
Deferred income taxes	(107,077)		(98,782)
Changes in operating assets and liabilities:
Other current assets	38,049		(88,522)
Accounts payable	(145,265)		(89,668)
Accrued expenses and other liabilities	251,782		185,299
Deferred revenue	26,515		(2,390)
Other non-current assets and liabilities	(66,047)		(68,937)
Net cash provided by operating activities	2,212,522		2,178,740
Cash flows from investing activities:
Purchases of property and equipment	(75,714)		(62,019)


Purchases of short-term investments	—		(201,634)

Net cash used in investing activities	(75,714)		(263,653)
Cash flows from financing activities:


Repayments of debt	(400,000)		—
Proceeds from issuance of common stock	268,881		26,028
Repurchases of common stock	(2,000,000)		(400,101)
Taxes paid related to net share settlement of equity awards	(1,825)		—

Net cash used in financing activities	(2,132,944)		(374,073)
Effect of exchange rate changes on cash, cash equivalents and restricted cash	(95,790)		26,423
Net increase (decrease) in cash, cash equivalents and restricted cash	(91,926)		1,567,437
Cash, cash equivalents and restricted cash at beginning of period	7,118,515		5,170,582
Cash, cash equivalents and restricted cash at end of period	$	7,026,589	$	6,738,019

See accompanying notes to the consolidated financial statements.

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NETFLIX, INC.

Consolidated Balance Sheets

(in thousands, except share and par value data)


	As of
	March 31, 2024		December 31, 2023
	(unaudited)
Assets
Current assets:
Cash and cash equivalents	$	7,024,766	$	7,116,913
Short-term investments	20,973		20,973
Other current assets	2,875,574		2,780,247
Total current assets	9,921,313		9,918,133
Content assets, net	31,662,100		31,658,056
Property and equipment, net	1,501,168		1,491,444
Other non-current assets	5,743,140		5,664,359
Total assets	$	48,827,721	$	48,731,992
Liabilities and Stockholders’ Equity
Current liabilities:
Current content liabilities	$	4,436,021	$	4,466,470
Accounts payable	607,348		747,412
Accrued expenses and other liabilities	1,977,428		1,803,960
Deferred revenue	1,469,484		1,442,969
Short-term debt	798,936		399,844
Total current liabilities	9,289,217		8,860,655
Non-current content liabilities	2,370,692		2,578,173
Long-term debt	13,217,038		14,143,417
Other non-current liabilities	2,585,364		2,561,434
Total liabilities	27,462,311		28,143,679
Commitments and contingencies (Note 8)
Stockholders’ equity:
Common stock, $0.001 par value; 4,990,000,000 shares authorized at March 31, 2024 and December 31, 2023; 430,964,991 and 432,759,584 issued and outstanding at March 31, 2024 and December 31, 2023, respectively	5,489,850		5,145,172
Treasury stock at cost (19,648,480 and 16,078,268 shares at March 31, 2024 and December 31, 2023, respectively)	(8,934,056)		(6,922,200)
Accumulated other comprehensive loss	(111,879)		(223,945)
Retained earnings	24,921,495		22,589,286
Total stockholders’ equity	21,365,410		20,588,313
Total liabilities and stockholders’ equity	$	48,827,721	$	48,731,992

See accompanying notes to the consolidated financial statements.

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NETFLIX, INC.

Consolidated Statements of Stockholders’ Equity

(unaudited)

(in thousands)

Three Months Ended

March 31,
2024

March 31,
2023

Total stockholders' equity, beginning balances

SEC Form 10-Q filed by Netflix Inc.