Netflix

Netflix is a streaming entertainment service offering TV series, films, games and live programming across many genres and languages. Members can watch as much as they want, anytime, anywhere, and can change their plans at any time. Its stated strategy is to grow globally within an operating margin target. Netflix operates as one operating segment, and its fiscal year is the calendar year.

Revenue comes mainly from monthly membership fees for streaming. Plan prices vary by country and by the features of the plan, and Netflix also offers a lower-priced ad-supported plan. Members are billed in advance, and revenue is recognized ratably over each monthly membership period.

Netflix says it has adjusted, and may adjust, its pricing, its plans and the lower-priced ad-supported plan, and it is enforcing limits on shared viewing outside a household. It aims to attract new members with compelling content, and its stated strategy is to grow globally within an operating margin target.

Content costs are largely fixed, so if growth slows, margins and cash flow can suffer. The market for entertainment video is intensely competitive, and competition pushes up the cost of some programming. Content obligations include $18.4 billion that is not on the balance sheet. A weakening of foreign currencies against the U.S. dollar may reduce reported revenue: 2025 revenue would have been about $271 million higher at constant currency.