Last Updated: 26 September 2026
Netflix is growing revenue in the low-to-mid teens and widening its operating margin, yet its shares closed at $71.14 on 25 September 2026, about 43% below the 52-week high set in October 2025. Since the previous version of this report, three things have changed. Netflix agreed to buy Warner Bros., then withdrew in February 2026 when Paramount Skydance outbid it, and collected a $2.8bn termination fee. It completed a 10-for-1 stock split in November 2025. It has also turned to record buybacks and a fast-growing advertising business. This report sets out what Netflix's shareholder letters and SEC filings show: revenue, earnings, cash flow, debt, insider dealing and scheduled events. All per-share figures are on a post-split basis, and every valuation figure is shown as a calculation.
1. Company Snapshot
| Field | Value |
|---|---|
| Company | Netflix, Inc., headquartered in Los Gatos, California |
| Ticker / exchange | NFLX, Nasdaq Global Select Market |
| CEO / Leadership | Ted Sarandos and Greg Peters (co-Chief Executive Officers); Spence Neumann (Chief Financial Officer). Co-founder Reed Hastings did not stand for re-election to the board at the 4 June 2026 annual meeting |
| Employees | About 16,000 full-time employees at 31 December 2025 (FY2025 Form 10-K), 68% of them in the US and Canada |
| Revenue (FY2025) | $45,183m, up 15.9% year on year (fiscal year ended 31 December 2025) |
| Net income (FY2025, GAAP) | $10,981m; diluted EPS $2.53 (post-split); operating margin 29.5% |
| Revenue (trailing twelve months to 30 June 2026) | $48,371m |
| Market cap | ~$296.2bn (4,163.9m shares outstanding per the Q2 2026 Form 10-Q cover, at the $71.14 close of 25 September 2026) |
| Paid memberships | More than 325m at the end of Q4 2025, the last figure disclosed; Netflix no longer reports subscriber numbers quarterly |
| Dividend | None. Netflix returns cash through share repurchases, with $27.1bn of authorisation remaining after Q2 2026 |
| Most recent reported period | Q2 2026 (quarter ended 30 June 2026), reported 16 July 2026 |
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2. Bull Case and Bear Case
Bull Case
- Double-digit growth at scale: revenue grew 15.6% in FY2024 and 15.9% in FY2025 to $45,183m. Q1 2026 grew 16.2% and Q2 2026 13.4%, and full-year 2026 guidance is $51.0bn to $51.4bn, up 13% to 14%.
- Margins are still widening: the operating margin rose from 26.7% in FY2024 to 29.5% in FY2025. Management guides 31.5% for 2026 and 33.2% for Q3 2026, against 28.2% in Q3 2025.
- Advertising is doubling: ad revenue grew more than 2.5 times in 2025 to over $1.5bn, and Netflix targets roughly $3bn in 2026. The ad tier passed 250m monthly active viewers, the Ads Suite received MRC accreditation, and the 2026 US upfront nearly doubled commitments.
- Heavy capital returns: Netflix repurchased $4.7bn of stock in Q2 2026, its largest quarter ever, after adding a $25bn authorisation in April. It expects about $12.5bn of free cash flow in 2026.
- A clean exit from Warner Bros.: walking away from the Warner Bros. deal in February 2026 left Netflix with a $2.8bn termination fee and no acquisition debt. Net debt was about $5.2bn at 30 June 2026.
Bear Case
- Growth is slowing into the second half: Q3 2026 revenue guidance is $12.86bn, up 11.7%, against 16.2% in Q1 and 13.4% in Q2. Full-year guidance was narrowed to $51.0bn to $51.4bn from $50.7bn to $51.7bn.
- A larger rival is forming: Paramount Skydance settled the state antitrust suit over its Warner Bros. Discovery acquisition on 21 September 2026, clearing the way to close. The combined group would bring HBO Max, Paramount+ and two major studios under one owner.
- Insiders are sellers, not buyers: every 2026 Form 4 transaction found was a sale or an option exercise followed by a sale. Reed Hastings sold roughly $38m a month early in the year, and both co-CEOs and the CFO sold in August.
- Live sport is expensive per hour watched: management says live programming is just over 5% of content spend but about 1% of viewing hours, as NFL, boxing, MLB and FIFA Women's World Cup rights are added.
- Earnings quality is noisy: Q3 2025 carried a roughly $619m Brazilian non-income tax charge, and Q1 2026 EPS of $1.23 was lifted by the $2.8bn termination fee. Trailing GAAP figures therefore overstate or understate the underlying run rate, depending on the period.
3. Business Segments
Netflix reports a single operating segment: its streaming service. It discloses revenue by geographic region, shown below for FY2025. In Q2 2026, UCAN revenue grew 10%, EMEA 14%, LATAM 21% and APAC 16%.
| Segment / region | % of revenue | What it is |
|---|---|---|
| United States and Canada (UCAN) | 44.2% ($19,957m) | The most mature market and the lead market for advertising, live NFL games and price increases. US prices rose on 26 March 2026, with the ads plan moving to $8.99 a month |
| Europe, Middle East and Africa (EMEA) | 32.1% ($14,515m) | The second-largest region. The ad plan is due to launch in nine more EMEA countries in March 2027, and the first UK Upfront was held in September 2026 |
| Latin America (LATAM) | 11.9% ($5,358m) | The fastest-growing region in Q2 2026, at 21%. It is also the source of the Brazilian non-income tax charge taken in Q3 2025 |
| Asia-Pacific (APAC) | 11.8% ($5,354m) | Growing through local-language originals and live events. Netflix streamed the 2026 World Baseball Classic in Japan |
4. Business Model and Moat
How it makes money. Most revenue comes from monthly subscriptions across ad-supported, Standard and Premium plans in more than 190 countries. Advertising is a growing second stream: Netflix sells ads on its cheapest plan through its own Ads Suite and programmatic partners. Content is the main cost. It is capitalised and amortised through cost of revenue, so reported depreciation and amortisation is small, at $333m in FY2025, while content amortisation runs to billions. Management guides cash content spend at about 1.1 times amortisation for 2026.
Where the durable advantage sits. Netflix has the largest paid streaming base, with more than 325m memberships. That scale spreads content, technology and marketing costs across more subscribers than any rival, and it funds a local-language slate that travels across regions. Its recommendation system and viewing data shape both what it commissions and how it is presented. It has also shown it can raise prices without losing its growth.
Where the model is fragile. Streaming competes for time with free video platforms such as YouTube and with bundles from companies whose main business lies elsewhere, such as Amazon. Hits are not predictable, so revenue growth depends on a steady flow of successful titles. Live sports rights cost more per hour watched than scripted content. Moving into advertising also exposes Netflix to the ad cycle, which subscription revenue does not.
5. Financial Health
All figures come from Netflix's quarterly shareholder letters and Form 10-K and 10-Q filings, cross-checked against its SEC XBRL data. Netflix completed a 10-for-1 stock split on 14 November 2025. Per-share figures for FY2024 onward are as restated by Netflix. Figures for FY2021 to FY2023 are the originally reported diluted EPS of $11.24, $9.95 and $12.03, divided by ten. Netflix pays no dividend.
| Fiscal Year | Revenue ($m) | YoY % | GAAP EPS | Adjusted EPS | Dividend/share | Long-term debt (YE) |
|---|---|---|---|---|---|---|
| FY2021 | 29,698 | +18.8% | $1.12 | $1.12 † | Nil | $14,693m |
| FY2022 | 31,616 | +6.5% | $1.00 | $1.00 † | Nil | $14,353m |
| FY2023 | 33,723 | +6.7% | $1.20 | $1.20 † | Nil | $14,143m |
| FY2024 | 39,001 | +15.6% | $1.98 | $1.98 † | Nil | $13,798m |
| FY2025 | 45,183 | +15.9% | $2.53 | $2.53 † | Nil | $13,464m |
† Netflix does not report an adjusted or non-GAAP EPS figure, so the GAAP diluted figure is repeated. ‡ Long-term debt is the non-current portion at year end. Short-term debt was a further $700m at FY2021, nil at FY2022, $400m at FY2023, $1,784m at FY2024 and $999m at FY2025. At 30 June 2026, short-term debt was $2,484m and non-current debt $11,826m, a total of $14,309m.
Cash generation and balance sheet: FY2025 operating cash flow was $10,149m, capital expenditure $688m, and depreciation and amortisation of property, equipment and intangibles $333m. GAAP operating income was $13,327m. For the twelve months to 30 June 2026, operating cash flow was $11,971m, capital expenditure $819m, and depreciation and amortisation $372m. Q1 2026 operating cash flow includes the $2.8bn Warner Bros. termination fee. At 30 June 2026, cash and equivalents were $9,099m and short-term investments $29m, a total of $9,128m against $14,309m of debt. Net debt was therefore about $5.18bn, and stockholders' equity was $30,152m.
| Quarter / Half | Revenue ($m) | Adjusted EPS | GAAP EPS |
|---|---|---|---|
| Q2 2026 | 12,560 | $0.80 † | $0.80 |
| Q1 2026 | 12,250 | $1.23 † | $1.23 |
| Q4 2025 | 12,051 | $0.56 † | $0.56 |
| Q3 2025 | 11,510 | $0.59 † | $0.59 |
| Q2 2025 | 11,079 | $0.72 † | $0.72 |
| Q1 2025 | 10,543 | $0.66 † | $0.66 |
| FY2025 total | 45,183 | $2.53 | $2.53 |
Q2 2026 operating income was $4,193m, a 33.4% margin, and net income was $3,401m. Q1 2026 EPS of $1.23 includes the $2.8bn termination fee, booked in interest and other income; Netflix had forecast $0.76 before the fee. Q3 2025 EPS absorbed the Brazilian tax charge of about $619m. For Q3 2026, management guides revenue of $12,860m, an operating margin of 33.2%, net income of $3,452m and diluted EPS of $0.82.
6. Valuation Metrics
Raw metrics, September 2026. Not opinions on whether the stock is cheap or expensive.
| Metric | Value |
|---|---|
| Market cap | ~$296.2bn (4,163.9m shares at the $71.14 close of 25 September 2026) |
| Trailing P/E (GAAP) | ~22.4x (price $71.14 / trailing twelve-month diluted EPS $3.18, the sum of Q3 2025 to Q2 2026). That total includes both the Q1 2026 termination fee and the Q3 2025 Brazil tax charge |
| P/E (forward) | ~21.7x on annualised Q3 2026 guidance (price $71.14 / $3.28, being guided Q3 EPS of $0.82 times four). Netflix does not publish full-year EPS guidance |
| P/S (TTM) | ~6.1x (market cap $296.2bn / trailing revenue $48.37bn) |
| Enterprise value | ~$301.4bn (market cap $296.2bn + total debt $14.31bn − cash and short-term investments $9.13bn, per the 30 June 2026 balance sheet) |
| EV/EBITDA (TTM) | ~20.5x (EV $301.4bn / EBITDA $14.73bn; EBITDA = trailing operating income $14.35bn + depreciation and amortisation of property, equipment and intangibles $0.37bn from the cash flow statement). Content amortisation is treated as an operating cost and not added back |
| P/FCF | ~26.6x (market cap $296.2bn / free cash flow $11.15bn; FCF = trailing operating cash flow $11.97bn − capital expenditure $0.82bn). The trailing figure includes the $2.8bn termination fee; on management's 2026 FCF guidance of about $12.5bn the multiple is ~23.7x |
| 52-week high | $124.86 (21 October 2025) |
| 52-week low | $65.08 (17 July 2026, the day after Q2 results) |
| Short interest (% of float) | ~2.3% of float, being 94.19m shares short against a float of about 4.14bn at the 15 September 2026 settlement date (Nasdaq data via Benzinga and MarketBeat) |
| Days to cover | ~3.6 days at the 15 September 2026 settlement date |
| Price/book | ~9.8x (market cap $296.2bn / stockholders' equity $30.15bn at 30 June 2026) |
Because content costs sit inside operating income as amortisation, EV/EBITDA for Netflix is close to EV/operating income and is not directly comparable with companies that capitalise and depreciate physical assets. The one-off items in Q3 2025 and Q1 2026 roughly offset in trailing EPS but not in trailing free cash flow.
7. What Are They Building
An in-house advertising business. The Netflix Ads Suite, launched in May 2025, now carries MRC accreditation. It offers programmatic access to Pause Ads and live inventory, AI-generated pause-ad formats, interactive formats and household demographic targeting. Pause Ads go programmatic across partner platforms in October 2026. The ad plan launches in Austria, Belgium, Denmark, Ireland, the Netherlands, Norway, Poland, Sweden and Switzerland in March 2027.
Live events and sport. Netflix's NFL deal runs through the 2029-30 season and covers a Week 1 game, Thanksgiving Eve, Christmas Day, Week 18 and NFL Honors. Venue distribution of those games comes through EverPass Media from September 2026. Other live rights include WWE, MLB fixtures, boxing (Tyson Fury against Anthony Joshua on 11 December 2026) and the 2027 FIFA Women's World Cup.
Beyond scripted series. Netflix now carries video podcasts from Spotify and The Ringer, iHeartMedia and Barstool, and creator shows from Ms. Rachel and Mark Rober. It also streams publisher video from Condé Nast and Hearst, and TF1's linear channels inside the app in France. Its games are cloud-played TV party games that use a phone as the controller, plus the Netflix Playground app for children.
AI and product. Netflix uses large language models for recommendations and conversational search. It bought InterPositive, an AI filmmaking-tools company, in March 2026, and says generative AI was used in about 300 titles in 2026. A redesigned mobile app with a vertical video feed rolled out from April 2026. Netflix House venues are open in Dallas and King of Prussia.
8. Competitive Landscape
Market capitalisations were re-checked live at the 25 September 2026 close. Metrics come from each company's own results releases or filings.
| Peer | Market cap (September 2026) | Key 2025 metric |
|---|---|---|
| Alphabet (GOOGL), owner of YouTube | ~$4,206bn | YouTube's 2025 total revenue was more than $60bn, including $11.4bn of ad revenue in Q4 2025 (Alphabet Q4 2025 results) |
| Amazon (AMZN), owner of Prime Video | ~$2,693bn | 2025 net sales $716.9bn, up 12% (Amazon Q4 2025 release) |
| Walt Disney (DIS) | ~$183.3bn | FY2025 (to September 2025) revenue $94.4bn, up 3% (Disney FY2025 release) |
| Spotify (SPOT) | ~$104.9bn | 751m monthly active users and 290m paid subscribers at Q4 2025; now a video-podcast partner of Netflix |
| Comcast (CMCSA), owner of Peacock | ~$77.8bn | Peacock 2025 revenue $5.4bn, up 10%, with 44m paid subscribers (Comcast Q4 2025 release) |
| Warner Bros. Discovery (WBD) | ~$77.4bn | 131.6m streaming subscribers at the end of 2025, up 13%; being acquired by Paramount Skydance |
| Paramount Skydance (PSKY) | ~$11.2bn | 78.9m Paramount+ subscribers at 31 December 2025 |
Netflix's market value is larger than Disney, Warner Bros. Discovery and Paramount Skydance combined. Its most direct rivals for viewing time are YouTube and Amazon, whose parents are far larger and do not need streaming to be profitable on its own. The Paramount Skydance and Warner Bros. Discovery combination would be the largest traditional-studio competitor once it closes.
9. Insider Activity
Co-CEOs Ted Sarandos and Greg Peters and CFO Spence Neumann all sold stock in August 2026, and no open-market purchases by insiders were found in 2026. Several sales were made under Rule 10b5-1 plans adopted on 4 May 2026. Reed Hastings, who left the board in June, sold about 390,000 to 426,000 shares a month from January to June 2026. He still held about 21.16m shares through a trust after his 1 June 2026 sale. The table is compiled from SEC Form 4 filings, with all share counts on a post-split basis.
| Name | Date | Type | Shares | Price | Value | Plan Type |
|---|---|---|---|---|---|---|
| Richard Barton (Director) | 09 Sep 2026 | Option exercise and sale (9 to 10 September) | 1,440 | $75.27 to $76.26 | ~$0.11m | Rule 10b5-1 (adopted 4 May 2026) |
| Spence Neumann (CFO) | 10 Aug 2026 | Sale | 9,248 | $75.79 | ~$0.70m | No 10b5-1 footnote |
| Greg Peters (Co-CEO) | 06 Aug 2026 | Sale | 27,312 | $73.54 | ~$2.01m | No 10b5-1 footnote |
| David Hyman (General Counsel) | 04 Aug 2026 | Option exercise and sale | 5,723 | $72.85 | ~$0.42m | Not verified |
| Ted Sarandos (Co-CEO) | 03 Aug 2026 | Sale (3 to 4 August, after RSU vesting) | 133,162 | $72.90 to $73.48 | ~$9.73m | Rule 10b5-1 for 3 August sales (adopted 4 May 2026) |
| Bradford Smith (Director) | 17 Jun 2026 | Option exercise and sale | 35,990 | $77.52 | ~$2.79m | Not verified |
| Reed Hastings (then Director) | 01 Jun 2026 | Option exercise and sale | 386,700 | $85.85 to $86.73 | ~$33.2m | Rule 10b5-1 (adopted 8 August 2023) |
| Reed Hastings (Director) | 01 May 2026 | Sale | 407,550 | $93.13 | ~$37.96m | Rule 10b5-1 |
Earlier in 2026, Neumann sold 114,520 shares between 27 February and 2 April at $95.50 to $98.00, and Peters sold 105,781 shares on 29 January at $82.94. The August sales by both co-CEOs came at prices close to the 52-week low.
10. Key Risks
- Content hit rate and engagement: revenue growth depends on a continuous supply of titles that people want to watch, and Netflix no longer publishes subscriber counts. Weaker engagement would show up first in slower revenue growth and less pricing power.
- Competitive consolidation: Paramount Skydance's pending acquisition of Warner Bros. Discovery would combine two studios and two streaming services. YouTube and Amazon compete for the same viewing time with far larger balance sheets.
- Advertising execution: management's 2026 plan assumes ad revenue roughly doubles to about $3bn. Advertising is cyclical and relies on measurement, programmatic partners and ad-tech that Netflix has built only since 2025.
- Rising cost of live rights: NFL, boxing, MLB and FIFA rights cost more per viewing hour than scripted content. Live programming is just over 5% of content spend but about 1% of viewing hours, so the payback depends on ads and retention.
- International tax and currency exposure: more than half of revenue comes from outside UCAN. The roughly $619m Brazilian non-income tax charge in Q3 2025 showed how local tax disputes can hit margins. Currency moves also shift reported growth: Q2 2026 revenue rose 13.4% reported against 12% FX-neutral.
- Price-rise tolerance: US prices rose on 26 March 2026 across all plans. Repeated increases carry churn risk, particularly as more members move to the cheaper ad-supported plan.
11. Recent Developments
- 25 Sep 2026 — Sesame Street film in development. Netflix is developing a Sesame Street feature film with Sesame Workshop and Rideback, and has extended its series deal through Season 62.
- 24 Sep 2026 — First UK Upfront and ad-plan expansion. Netflix said Pause Ads will be sold programmatically from October and that the ad plan will launch in nine more EMEA countries in March 2027. It also confirmed that Tyson Fury against Anthony Joshua will stream live on 11 December 2026.
- 21 Sep 2026 — Paramount Skydance settles Warner Bros. Discovery antitrust suit. The settlement with state attorneys general clears the path for Paramount Skydance to complete its acquisition of Warner Bros. Discovery, the deal Netflix withdrew from in February. Netflix shares rose about 2% that day.
- 01 Sep 2026 — EverPass NFL distribution deal. A multi-year agreement brings Netflix's NFL games to bars, restaurants and other commercial venues through EverPass Media.
- 10 Aug 2026 — US upfront closed with commitments nearly doubled. Netflix said sponsorships for its 2027 FIFA Women's World Cup games had sold out and that its Ads Suite had received its first MRC accreditation.
- 03 Aug 2026 — Co-CEOs sell stock. Ted Sarandos sold 133,162 shares on 3 and 4 August for about $9.73m, and Greg Peters sold 27,312 shares on 6 August for about $2.01m.
- 16 Jul 2026 — Q2 2026 results in line; FY2026 revenue range narrowed. Revenue was $12,560m (+13.4%), operating margin 33.4% and EPS $0.80. Buybacks were a record $4.7bn. Full-year revenue guidance was narrowed to $51.0bn to $51.4bn. The shares fell more than 7% the next day to a 52-week low of $65.08.
12. Key Dates to Watch
- 20 Oct 2026 — Q3 2026 results posted at about 1:01pm Pacific time, followed by a live video interview at 1:45pm. Guidance is revenue of $12,860m, an operating margin of 33.2% and EPS of $0.82.
- Expected Oct 2026 — Pause Ads become available programmatically through partner demand-side platforms.
- 25 Nov 2026 — NFL Thanksgiving Eve game streamed on Netflix.
- 11 Dec 2026 — Tyson Fury against Anthony Joshua, live from Cardiff.
- 25 Dec 2026 — NFL Christmas Day games streamed on Netflix.
- 31 Dec 2026 — FY2026 fiscal year end. Management guides revenue of $51.0bn to $51.4bn, a 31.5% operating margin and about $12.5bn of free cash flow.
- Expected Jan 2027 — Q4 2026 results and 2027 guidance; date TBC.
- Expected Mar 2027 — ad plan launches in Austria, Belgium, Denmark, Ireland, the Netherlands, Norway, Poland, Sweden and Switzerland.
Netflix pays no dividend, so there are no ex-dividend dates to track. Macro releases that move large-cap media and technology stocks are listed on the ChartsView Economic Calendar. Reader discussion of these dates continues in the Forum.
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