10-K – 2026-01-23 – nflx-20251231.htm

Foreign Currency Risk
We operate our business globally and transact in multiple currencies. Currencies denominated in other than the U.S. dollar accounted for 56% of revenue and 31% of operating expenses for the year ended December 31, 2025. We therefore have foreign currency risk related to these currencies, which are primarily the Euro, British pound, Brazilian real, Mexican peso, Canadian dollar, and Argentine peso.
Accordingly, volatility in exchange rates, and in particular a weakening of foreign currencies relative to the U.S. dollar, may negatively affect our revenue and operating income as expressed in U.S. dollars. Our revenues, on a constant currency basis, would have been approximately $271 million higher for the year ended December 31, 2025 than our reported revenues of $45,183 million. See Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” for further information regarding our non-GAAP financial measure of constant currency.
We enter into foreign exchange forward contracts to mitigate fluctuations in forecasted U.S. dollar-equivalent revenues from changes in foreign currency exchange rates. These contracts may reduce, but do not entirely eliminate, the effect of foreign currency exchange fluctuations, and we may choose not to hedge certain exposures. We designate these contracts as cash flow hedges of forecasted foreign currency revenue and initially record the gains or losses on these derivative instruments as a component of accumulated other comprehensive income (“AOCI”) within Stockholders' equity in the Consolidated Balance Sheets and reclassify the amounts into “Revenues” on the Consolidated Statements of Operations in the same period the forecasted transaction affects earnings. If the U.S dollar weakened by 10% as of December 31, 2025 and December 31, 2024, the amount recorded in AOCI related to our foreign exchange contracts, before taxes, would have been approximately $2,296 million and $1,850 million lower, respectively. This adverse change in AOCI would be expected to offset a corresponding favorable foreign currency change in the underlying forecasted revenues when recognized in earnings.
We enter into foreign exchange forward contracts to mitigate fluctuations in forecasted and firmly committed U.S. dollar-equivalent transactions related to the licensing and production of content assets from changes in foreign currency exchange rates. These contracts may reduce, but do not entirely eliminate, the effect of foreign currency exchange fluctuations, and we may choose not to hedge certain exposures. We designate these contracts as cash flow hedges and initially record the gains or losses on these derivative instruments as a component of AOCI and reclassify the amounts into “Cost of Revenues” to offset the hedged exposures as they affect earnings, which occurs as the underlying hedged content assets are amortized. If the U.S dollar strengthened by 10% as of December 31, 2025 and December 31, 2024, the amount recorded in AOCI related to our foreign exchange contracts, before taxes, would have been approximately $237 million and $187 million lower, respectively. This adverse change in AOCI would be expected to offset a corresponding favorable foreign currency change in the underlying exposures when recognized in earnings.
We use non-derivative instruments to mitigate foreign exchange risk related to our net investments in certain foreign subsidiaries. These non-derivative instruments may reduce, but do not entirely eliminate, the effect of foreign currency exchange fluctuations, and we may choose not to hedge certain exposures. We designate a portion of our foreign currency-denominated Senior Notes in Euro as net investment hedges and the gains or losses on these non-derivative instruments are reported as a component of AOCI and remain in AOCI until the hedged net investment is sold or liquidated, at which point the amounts recognized in AOCI are reclassified into earnings.
We have also experienced and will continue to experience fluctuations in our net income as a result of gains (losses) on the settlement and the remeasurement of monetary assets and liabilities denominated in currencies that are not the functional currency. We enter into foreign exchange forward contracts to mitigate the foreign exchange risk on intercompany transactions and monetary assets and liabilities that are not denominated in the functional currencies of the Company and its subsidiaries. These contracts may reduce, but do not entirely eliminate, the effect of foreign currency exchange fluctuations, and we may choose not to hedge certain exposures. Certain contracts are not designated as hedging instruments and the gains or losses on these derivative instruments are recorded in “Interest and other income (expense)” in the
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Consolidated Statements of Operations. We also designate certain contracts as fair value hedges to mitigate the foreign exchange risk on the remeasurement of our foreign-currency denominated debt. The gains or losses on these derivative instruments included in the assessment of hedge effectiveness are recorded in “Interest and other income (expense),” net with the offsetting foreign currency remeasurement gains and losses on the hedged items. If an adverse change in exchange rates of 10% was applied to our monetary assets and liabilities denominated in currencies other than the functional currencies as of December 31, 2025 and December 31, 2024, income before income taxes would have been approximately $1 million and $38 million lower, respectively, after considering the offsetting impact of the foreign currency exchange contracts and our net investment hedges.

Item 8. Financial Statements and Supplementary Data
The consolidated financial statements and accompanying notes listed in Part IV, Item 15(a)(1) of this Annual Report on Form 10-K are included immediately following Part IV hereof and incorporated by reference herein.

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
None.
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Item 9A. Controls and Procedures
(a) Evaluation of Disclosure Controls and Procedures
Our management, with the participation of our co-Chief Executive Officers and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the period covered by this Annual Report on Form 10-K. Based on that evaluation, our co-Chief Executive Officers and Chief Financial Officer concluded that our disclosure controls and procedures as of the end of the period covered by this Annual Report on Form 10-K were effective in providing reasonable assurance that information required to be disclosed by us in reports that we file or submit under the Exchange Act, is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, and that such information is accumulated and communicated to our management, including our co-Chief Executive Officers and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosures.
Our management, including our co-Chief Executive Officers and Chief Financial Officer, does not expect that our disclosure controls and procedures or our internal controls will prevent all errors and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within Netflix have been detected.
 
(b) Management’s Annual Report on Internal Control Over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rule 13a-15(f) of the Exchange Act). Our management assessed the effectiveness of our internal control over financial reporting as of December 31, 2025. In making this assessment, our management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) in Internal Control—Integrated Framework (2013 framework). Based on our assessment under the framework in Internal Control—Integrated Framework (2013 framework), our management concluded that our internal control over financial reporting was effective as of December 31, 2025. The effectiveness of our internal control over financial reporting as of December 31, 2025 has been audited by Ernst & Young LLP, an independent registered public accounting firm, as stated in their report that is included herein.
 
(c) Changes in Internal Control Over Financial Reporting
There was no change in our internal control over financial reporting that occurred during the quarter ended December 31, 2025 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
 

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Report of Independent Registered Public Accounting Firm

To the Stockholders and the Board of Directors of Netflix, Inc.

Opinion on Internal Control Over Financial Reporting
We have audited Netflix, Inc.’s internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria). In our opinion, Netflix, Inc. (the Company) maintained, in all material respects, effective internal control over financial reporting as of December 31, 2025, based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2025 and 2024, the related consolidated statements of operations, comprehensive income, stockholders’ equity and cash flows for each of the three years in the period ended December 31, 2025, and the related notes and our report dated January 23, 2026 expressed an unqualified opinion thereon.

Basis for Opinion
The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s Annual Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects.

Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

Definition and Limitations of Internal Control Over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

/s/ Ernst & Young LLP
San Jose, California
January 23, 2026

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Item 9B. Other Information
Rule 10b5-1 Trading Plans
The adoption or termination of contracts, instructions or written plans for the purchase or sale of our securities by our Section 16 officers and directors for the three months ended December 31, 2025, each of which is intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) under the Exchange Act (“Rule 10b5-1 Plan”), were as follows:

Name Title Action Date Adopted Expiration Date Aggregate # of Securities to be Purchased/Sold (1)

Spencer Neumann (2)
Chief Financial Officer Adoption 10/23/2025 12/31/2026 314,880
Greg Peters (3)
Co-CEO and Director Termination 10/30/2025 N/A 1,585,830
Greg Peters (4)
Co-CEO and Director Adoption 10/30/2025 12/31/2029 2,951,230
Ann Mather (5)
Director Adoption 11/7/2025 12/31/2026 23,430

(1) Aggregated shares covered have been adjusted to reflect the effect of the Stock Split. See Note 1 Organization and Summary of Significant Accounting Policies for further information regarding the Stock Split.

(2) Spencer Neumann, Chief Financial Officer, entered into a pre-arranged stock trading plan pursuant to Rule 10b5-1 on October 23, 2025. Mr. Neumann's plan provides for the potential exercise of vested stock options and the associated sale of up to 314,880 shares of Netflix common stock. The plan expires on December 31, 2026, or upon the earlier completion of all authorized transactions under the plan.

(3) On October 30, 2025, Greg Peters, Co-CEO and a member of the Board of Directors, terminated a pre-arranged stock trading plan pursuant to Rule 10b5-1, which was adopted on October 30, 2024. The plan provided for the potential exercise and sale of vested stock options, as well as the sale of Performance Share Units (PSUs) that were expected to vest during the term of the 10b5-1 plan (assuming vest at 100% of the target award amount) for up to 1,585,830 shares of Netflix common stock until November 1, 2027 or the earlier completion of all authorized transactions under the plan.

(4) Upon termination of Mr. Peters' prior plan (described in footnote 3), on October 30, 2025, Mr. Peters entered into a pre-arranged stock trading plan pursuant to Rule 10b5-1 that provides for the potential exercise of vested stock options and the associated sale of up to 2,951,230 shares of Netflix common stock. This figure includes 380,720 PSUs that are expected to vest during the term of the 10b5-1 plan, which are assumed to vest at 100% of the target award amount. The actual number of PSUs that may vest can vary between 0% - 200% of the target award of PSUs, subject to the achievement of certain performance conditions as set forth in the PSU award agreement, less shares to be withheld for tax withholding obligations. The plan expires on December 31, 2029, or upon the earlier completion of all authorized transactions under the plan.

(5) Ann Mather, a member of the Board of Directors, entered into a pre-arranged stock trading plan pursuant to Rule 10b5-1 on November 7, 2025. Ms. Mather's plan provides for the potential exercise of vested stock options and the associated sale of up to 23,430 shares of Netflix common stock. The plan expires on December 31, 2026, or upon the earlier completion of all authorized transactions under the plan.

Other than those disclosed above, none of our directors or officers adopted or terminated a “non-Rule 10b5-1 trading arrangement” as defined in Item 408 of Regulation S-K.

Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
Not applicable.
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PART III
 

Item 10. Directors, Executive Officers and Corporate Governance
Information regarding our directors and executive officers is incorporated by reference from the information contained under the sections “Proposal One: Election of Directors,” “Our Company Executive Officers," and "Other Information” in our Proxy Statement for the Annual Meeting of Stockholders.
The Company has adopted an insider trading policy which governs transactions in our securities by the Company and its directors, officers, employees, consultants, and contractors, which the Company believes is reasonably designed to promote compliance with insider trading laws, rules and regulations, and any listing standards applicable to the Company. A copy of our insider trading policy is filed with this Annual Report on Form 10-K as Exhibit 19.1.
 

Item 11. Executive Compensation
Information required by this item is incorporated by reference from information contained under the sections “Compensation Discussion and Analysis” and “Compensation of Named Executive Officers and Other Matters” in our Proxy Statement for the Annual Meeting of Stockholders.
 

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
Information required by this item is incorporated by reference from information contained under the sections “Security Ownership of Certain Beneficial Owners and Management” and “Equity Compensation Plan Information” in our Proxy Statement for the Annual Meeting of Stockholders.
 

Item 13. Certain Relationships and Related Transactions, and Director Independence
Information required by this item is incorporated by reference from information contained under the section “Certain Relationships and Related Transactions” and “Director Independence” in our Proxy Statement for the Annual Meeting of Stockholders.
 

Item 14. Principal Accountant Fees and Services
Information with respect to principal independent registered public accounting firm fees and services is incorporated by reference from the information under the caption “Proposal Two: Ratification of Appointment of Independent Registered Public Accounting Firm” in our Proxy Statement for the Annual Meeting of Stockholders.

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PART IV
 

Item 15. Exhibits, Financial Statement Schedules

(a) The following documents are filed as part of this Annual Report on Form 10-K:
(1) Financial Statements:
The financial statements are filed as part of this Annual Report on Form 10-K under “Item 8. Financial Statements and Supplementary Data.”
(2) Financial Statement Schedules:
The financial statement schedules are omitted as they are either not applicable or the information required is presented in the financial statements and notes thereto under “Item 8. Financial Statements and Supplementary Data.”
(3) Exhibits:
See Exhibit Index immediately following the signature page of this Annual Report on Form 10-K.

Item 16. Form 10–K Summary

None.

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NETFLIX, INC.
INDEX TO FINANCIAL STATEMENTS
 

  Page
Report of Independent Registered Public Accounting Firm (PCAOB ID: 42 )
37

Consolidated Statements of Operations
39

Consolidated Statements of Comprehensive Income
40

Consolidated Statements of Cash Flows
41

Consolidated Balance Sheets
42

Consolidated Statements of Stockholders’ Equity
43

Notes to Consolidated Financial Statements
44

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Report of Independent Registered Public Accounting Firm

To the Stockholders and the Board of Directors of Netflix, Inc.

Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of Netflix, Inc. (the Company) as of December 31, 2025 and 2024, the related consolidated statements of operations, comprehensive income, stockholders’ equity and cash flows for each of the three years in the period ended December 31, 2025, and the related notes (collectively referred to as the “consolidated financial statements"). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2025, in conformity with U.S. generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework), and our report dated January 23, 2026 expressed an unqualified opinion thereon.

Basis for Opinion
These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
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Content Amortization
Description of the Matter As disclosed in Note 1 to the consolidated financial statements “Organization and Summary of Significant Accounting Policies”, the Company acquires, licenses and produces content, including original programming (“Content”). The Company amortizes Content based on factors including historical and estimated viewing patterns.

Auditing the amortization of the Company’s Content is complex and subjective due to the judgmental nature of amortization which is based on an estimate of future viewing patterns. Estimated viewing patterns are based on historical and forecasted viewing. If actual viewing patterns differ from these estimates, the pattern and/or period of amortization would be changed and could affect the timing of recognition of content amortization.

How We Addressed the
Matter in Our Audit We obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the content amortization process. For example, we tested controls over management’s review of the content amortization method and the significant assumptions, including the historical and forecasted viewing hour consumption, used to develop estimated viewing patterns. We also tested management’s controls to determine that the data used in the model was complete and accurate.

To test content amortization, our audit procedures included, among others, evaluating the content amortization method, testing the significant assumptions used to develop the estimated viewing patterns and testing the completeness and accuracy of the underlying data. For example, we assessed management’s assumptions by comparing them to current viewing trends and current operating information including comparing previous estimates of viewing patterns to actual results. We also performed sensitivity analyses to evaluate the potential changes in the content amortization recorded that could result from changes in the assumptions.

/s/ Ernst & Young LLP

We have served as the Company's auditor since 2012.
San Jose, California
January 23, 2026

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NETFLIX, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
 

   
Year ended December 31,
   
2025 2024 2023
Revenues $ 45,183,036   $ 39,000,966   $ 33,723,297  
Cost of revenues 23,275,329   21,038,464   19,715,368  
Sales and marketing 3,301,306   2,917,554   2,657,883  
Technology and development
3,391,390   2,925,295   2,675,758  
General and administrative
1,888,408   1,702,039   1,720,285  
Operating income 13,326,603   10,417,614   6,954,003  
Other income (expense):
Interest expense ( 776,510 ) ( 718,733 ) ( 699,826 )
Interest and other income (expense) 172,459   266,776   ( 48,772 )
Income before income taxes 12,722,552   9,965,657   6,205,405  
Provision for income taxes ( 1,741,351 ) ( 1,254,026 ) ( 797,415 )
Net income $ 10,981,201   $ 8,711,631   $ 5,407,990  

Earnings per share:
Basic $ 2.58   $ 2.03   $ 1.22  
Diluted $ 2.53   $ 1.98   $ 1.20  
Weighted-average shares of common stock outstanding:
Basic 4,249,512   4,295,191   4,415,712  
Diluted 4,343,863   4,392,608   4,494,966  

See accompanying notes to consolidated financial statements.
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NETFLIX, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(in thousands)

Year ended December 31,
2025 2024 2023
Net income $ 10,981,201   $ 8,711,631   $ 5,407,990  
Other comprehensive income (loss):
Foreign currency translation adjustments, net of income tax benefit (expense) of $ 33 million, $( 7 ) million, and $ 0 , respectively
72,011   ( 247,949 ) 113,384  
Net change in unrealized gains (losses) on available-for-sale securities, net of income tax benefit (expense) of $ 1 million, $( 1 ) million, and $ 0 , respectively
( 2,511 ) 2,511   —  
Cash flow hedges:
Net unrealized gains (losses) ( 1,071,168 ) 921,227   ( 120,023 )
Reclassification of net (gains) losses included in net income 68,962   ( 96,795 ) —  
Net change, net of income tax benefit (expense) of $ 301 million, $( 246 ) million, and $ 36 million, respectively
( 1,002,206 ) 824,432   ( 120,023 )
Fair value hedges:
Net change in unrealized gains (losses) excluded from the assessment of effectiveness, net of income tax benefit (expense) of $ 3 million, $( 2 ) million, and $ 0 , respectively
( 9,838 ) 7,113   —  
Total other comprehensive income (loss) ( 942,544 ) 586,107   ( 6,639 )
Comprehensive income $ 10,038,657   $ 9,297,738   $ 5,401,351  

See accompanying notes to consolidated financial statements.
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NETFLIX, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)

   
Year Ended December 31,
   
2025 2024 2023
Cash flows from operating activities:
Net income $ 10,981,201   $ 8,711,631   $ 5,407,990  
Adjustments to reconcile net income to net cash provided by operating activities:
Additions to content assets ( 17,096,617 ) ( 16,223,617 ) ( 12,554,703 )
Change in content liabilities ( 610,838 ) ( 779,135 ) ( 585,602 )
Amortization of content assets 16,422,166   15,301,517   14,197,437  
Depreciation and amortization of property, equipment and intangibles 333,389   328,914   356,947  
Stock-based compensation expense 368,449   272,588   339,368  
Foreign currency remeasurement loss (gain) on debt 72,348   ( 121,539 ) 176,296  
Other non-cash items 577,451   494,778   512,075  
Deferred income taxes ( 442,056 ) ( 590,698 ) ( 459,359 )
Changes in operating assets and liabilities:
Other current assets ( 790,661 ) 22,180   ( 181,003 )
Accounts payable ( 8,039 ) 121,353   93,502  
Accrued expenses and other liabilities 881,218   191,899   103,565  
Deferred revenue 254,917   77,844   178,708  
Other non-current assets and liabilities ( 793,655 ) ( 446,351 ) ( 310,920 )
Net cash provided by operating activities 10,149,273   7,361,364   7,274,301  
Cash flows from investing activities:
Purchases of property and equipment ( 688,220 ) ( 439,538 ) ( 348,552 )
Acquisitions ( 17,194 ) —   —  
Purchases of investments ( 169,965 ) ( 1,742,246 ) ( 504,862 )
Proceeds from maturities and sales of investments 1,917,067   —   1,395,165  

Net cash provided by (used in) investing activities 1,041,688   ( 2,181,784 ) 541,751  
Cash flows from financing activities:
Proceeds from issuance of debt —   1,794,460   —  

Repayments of debt ( 1,833,450 ) ( 400,000 ) —  
Proceeds from issuance of common stock 666,965   832,887   169,990  
Repurchases of common stock ( 9,127,167 ) ( 6,263,746 ) ( 6,045,347 )
Taxes paid related to net share settlement of equity awards ( 46,165 ) ( 8,285 ) —  
Other financing activities ( 5,806 ) ( 29,743 ) ( 75,446 )
Net cash used in financing activities ( 10,345,623 ) ( 4,074,427 ) ( 5,950,803 )
Effect of exchange rate changes on cash, cash equivalents and restricted cash 386,519   ( 416,331 ) 82,684  
Net increase in cash, cash equivalents and restricted cash 1,231,857   688,822   1,947,933  
Cash, cash equivalents and restricted cash, beginning of year 7,807,337   7,118,515   5,170,582  
Cash, cash equivalents and restricted cash, end of year $ 9,039,194   $ 7,807,337   $ 7,118,515  
Supplemental disclosure:

Interest paid 718,611   674,502   684,504  

See accompanying notes to consolidated financial statements.
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NETFLIX, INC.
CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share data)
 

  As of December 31,
   
2025 2024
Assets
Current assets:
Cash and cash equivalents $ 9,033,681   $ 7,804,733  
Short-term investments 28,678   1,779,006  
Other current assets 3,957,832   3,516,640  
Total current assets 13,020,191   13,100,379  
Content assets, net 32,778,392   32,452,462  
Property and equipment, net 2,004,350   1,593,756  
Other non-current assets 7,794,060   6,483,777  
Total assets $ 55,596,993   $ 53,630,374  
Liabilities and Stockholders’ Equity
Current liabilities:
Current content liabilities $ 4,084,854   $ 4,393,681  
Accounts payable 900,612   899,909  
Accrued expenses and other liabilities 3,220,869   2,156,544  
Deferred revenue 1,775,730   1,520,813  
Short-term debt 998,865   1,784,453  
Total current liabilities 10,980,930   10,755,400  
Non-current content liabilities 1,579,476   1,780,806  
Long-term debt 13,463,971   13,798,351  
Other non-current liabilities 2,957,128   2,552,250  
Total liabilities 28,981,505   28,886,807  
Commitments and contingencies (Note 9)
Stockholders’ equity:
Preferred stock, $ 0.001 par value; 10,000,000 shares authorized at December 31, 2025 and December 31, 2024; no shares issued and outstanding at December 31, 2025 and December 31, 2024
—   —  
Common stock, $ 0.001 par value; 49,900,000,000 shares authorized at December 31, 2025 and December 31, 2024; 4,222,162,150 and 4,277,571,000 issued and outstanding at December 31, 2025 and December 31, 2024, respectively
7,286,410   6,252,126  
Treasury stock at cost ( 346,541,145 and 259,534,600 shares at December 31, 2025 and December 31, 2024)
( 22,372,658 ) ( 13,171,638 )
Accumulated other comprehensive income (loss) ( 580,382 ) 362,162  
Retained earnings 42,282,118   31,300,917  
Total stockholders’ equity 26,615,488   24,743,567  
Total liabilities and stockholders’ equity $ 55,596,993   $ 53,630,374  

See accompanying notes to consolidated financial statements.
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NETFLIX, INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(in thousands, except share data)
 

  Common Stock and Additional
Paid-in Capital Treasury Stock Accumulated
Other
Comprehensive Income (Loss) Retained
Earnings Total
Stockholders’
Equity
  Shares Amount    
Balances as of December 31, 2022 4,453,467,760   $ 4,637,601   $ ( 824,190 ) $ ( 217,306 ) $ 17,181,296   $ 20,777,401  
Net income
—  —  —  —  5,407,990   5,407,990  
Other comprehensive loss —  —  —  ( 6,639 ) —  ( 6,639 )
Issuance of common stock 19,265,980   168,203   —  —  —  168,203  
Repurchases of common stock ( 145,137,900 ) —  ( 6,098,010 ) —  —  ( 6,098,010 )

Stock-based compensation expense
—  339,368   —  —  —  339,368  
Balances as of December 31, 2023 4,327,595,840   $ 5,145,172   $ ( 6,922,200 ) $ ( 223,945 ) $ 22,589,286   $ 20,588,313  
Net income
—  —  —  —  8,711,631   8,711,631  
Other comprehensive income —  —  —  586,107   —  586,107  
Issuance of common stock 48,727,080   834,366   —  —  —  834,366  
Repurchases of common stock ( 98,619,350 ) —  ( 6,241,153 ) —  —  ( 6,241,153 )
Shares withheld related to net share settlement of equity awards
( 132,570 ) —  ( 8,285 ) —  —  ( 8,285 )
Stock-based compensation expense
—  272,588   —  —  —  272,588  
Balances as of December 31, 2024 4,277,571,000   $ 6,252,126   $ ( 13,171,638 ) $ 362,162   $ 31,300,917   $ 24,743,567  
Net income
—  —  —  —  10,981,201   10,981,201  
Other comprehensive loss —  —  —  ( 942,544 ) —  ( 942,544 )
Issuance of common stock 31,597,695   665,835   —  —  —  665,835  
Repurchases of common stock ( 86,536,215 ) —  ( 9,154,855 ) —  —  ( 9,154,855 )
Shares withheld related to net share settlement of equity awards ( 470,330 ) —  ( 46,165 ) —  —  ( 46,165 )
Stock-based compensation expense
—  368,449   —  —  —  368,449  
Balances as of December 31, 2025 4,222,162,150   $ 7,286,410   $ ( 22,372,658 ) $ ( 580,382 ) $ 42,282,118   $ 26,615,488  

See accompanying notes to consolidated financial statements.
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NETFLIX, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 

1. Organization and Summary of Significant Accounting Policies
Description of Business
Netflix, Inc. (the “Company”) was incorporated on August 29, 1997 and began operations on April 14, 1998. The Company is one of the world’s leading entertainment services offering TV series, films, games and live programming across a wide variety of genres and languages. Members can play, pause and resume watching as much as they want, anytime, anywhere, and can change their plans at any time.
Basis of Presentation
The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. Intercompany balances and transactions have been eliminated.
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. See Note 10 Stockholders' Equity for additional information.
Use of Estimates
The preparation of consolidated financial statements in conformity with generally accepted accounting principles (“GAAP”) in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting periods. Significant items subject to such estimates and assumptions include the content asset amortization policy 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 an ongoing basis, the Company evaluates these assumptions, judgments and estimates. Actual results may differ from these estimates.
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.
Recently adopted accounting pronouncements
In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures , which requires public entities, on an annual basis, to provide disclosure of specific categories in the rate reconciliation, as well as disclosure of income taxes paid disaggregated by jurisdiction. ASU 2023-09 is effective for fiscal years beginning after December 15, 2024, with early adoption permitted. The Company adopted ASU 2023-09 for the year ended December 31, 2025, and applied the new disclosure requirements
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prospectively to the current annual period. Prior period disclosures have not been adjusted to reflect the new disclosure requirements. See Note 11 Income Taxes in the accompanying notes to the consolidated financial statements for further detail.
Cash Equivalents and Short-term Investments
The Company considers investments in instruments purchased with an original maturity of 90 days or less to be cash equivalents. The Company also classifies amounts in transit from payment processors for customer credit card and debit card transactions that it expects to settle within several days as cash equivalents.
The Company classifies short-term investments, which consist of marketable securities with original maturities in excess of 90 days as available-for-sale. Short-term investments are reported at fair value, with allowances for credit losses included in “Interest and other income (expense)” in the Consolidated Statements of Operations and unrealized gains and losses included in “Accumulated other comprehensive income (loss)” within Stockholders’ equity in the Consolidated Balance Sheets. The Company uses the specific identification method to determine cost in calculating realized gains and losses upon the sale of short-term investments.
Short-term investments are reviewed periodically for allowances for credit losses and impairment. When evaluating the investments, the Company reviews factors such as the extent to which the fair value of the security is less than the amortized cost basis, adverse conditions specifically related to the security, the financial condition of the issuer, the Company’s intent to sell, and whether it would be more likely than not that the Company would be required to sell the investments before the recovery of their amortized cost basis.
Content
The Company acquires, licenses and produces content, including original programming, in order to offer members unlimited viewing of video entertainment. The content licenses are for a fixed fee and specific windows of availability. Payment terms for certain content licenses and the production of content require more upfront cash payments relative to the amortization expense. Payments for content, including additions to content assets and the changes in related liabilities, are classified within “Net cash provided by operating activities” on the Consolidated Statements of Cash Flows.
The Company recognizes content assets (licensed and produced) as “Content assets, net” on the Consolidated Balance Sheets. For licensed content, the Company capitalizes the fee per title and records a corresponding liability at the gross amount of the liability when the license period begins, the cost of the title is known and the title is accepted and available for streaming. For produced content, the Company capitalizes costs associated with the production, including development costs, direct costs and production overhead, as costs are incurred.
Based on factors including historical and estimated viewing patterns, the Company amortizes the content assets (licensed and produced) in “Cost of revenues” on the Consolidated Statements of Operations over the shorter of each title's contractual window of availability, estimated period of use or ten years , beginning with the month of first availability. The amortization is on an accelerated basis, as the Company typically expects more upfront viewing, and film amortization is more accelerated than TV series amortization. On average, over 90 % of a licensed or produced content asset is expected to be amortized within four years after its month of first availability. The Company reviews factors impacting the amortization of the content assets on a regular basis. The Company's estimates related to these factors require considerable management judgment.
In the normal course of business, the Company, or a third-party producing content on the Company's behalf, may qualify for tax incentives through eligible spend on productions. The accounting for tax incentives is dependent on the particular type of incentive, including the nature of the benefit and the location the incentive is earned. In general, tax incentives are realized as cash receipts and may be received prior to or after a title launches on the Company’s service. Any amounts the Company is eligible for through qualified production spend but has not received, are recognized in “Other current assets” or “Other non-current assets” on the Company’s Consolidated Balance Sheets as receivables. Tax incentives are generally accounted for as a reduction to the cost basis of the Company’s content assets (presented in “Content assets, net”) and reduce content amortization over the life of the title (as presented in “Cost of revenues”) on the Consolidated Statements of Operations.
The Company's business model is subscription based as opposed to a model generating revenues at a specific title level. Content assets (licensed and produced) are predominantly monetized as a group and therefore are reviewed in the aggregate at a group level when an event or change in circumstances indicates a change in the expected usefulness of the content or that the fair value may be less than unamortized cost. To date, the Company has not identified any such event or changes in circumstances. If such changes are identified in the future, these aggregated content assets will be stated at the lower of unamortized cost or fair value. In addition, unamortized costs for assets that have been, or are expected to be, abandoned are written off.
Acquisitions
The Company uses its best estimates and assumptions to assign fair value to the tangible and intangible assets acquired and liabilities assumed at the acquisition date. In addition, uncertain tax positions, tax-related valuation allowances and pre-acquisition contingencies of an entity acquired in a business combination are recorded as of the acquisition date.
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Property and Equipment
Property and equipment are carried at cost less accumulated depreciation. Depreciation is calculated using the straight-line method over the shorter of the estimated useful lives of the respective assets, generally up to 30 years, or the expected lease term for leasehold improvements, if applicable.
Trade Receivables
Trade receivables primarily consist of membership and advertising fees due to the Company. The Company evaluates the need for an allowance for credit losses based on historical collection trends, the financial condition of its payment partners, and external market factors.
Revenue Recognition
The Company's primary source of revenues is from monthly membership fees. Members are billed in advance of the start of their monthly membership and revenues are recognized ratably over each monthly membership period. Revenues are presented net of the taxes that are collected from members and remitted to governmental authorities. The Company is the principal in all its relationships where partners, including consumer electronics (“CE”) manufacturers, multichannel video programming distributors (“MVPDs”), mobile operators and internet service providers (“ISPs”), provide access to the service as the Company retains control over service delivery to its members. In circumstances in which the price that the member pays is established by a partner and there is no standalone price for the Netflix service (for instance, in a bundle), the net amount collected from the partner is recognized as revenue.
The Company also earns revenue from advertisements presented on its streaming service, consumer products, live experiences and various other sources. Revenues earned from sources other than monthly membership fees were not a material component of revenues for the years ended December 31, 2025, 2024, and 2023. See Note 2 Revenue Recognition to the consolidated financial statements for further information regarding revenues.
Sales and Marketing
Sales and marketing expenses consist primarily of expenses for promotional activities such as digital and television advertising, and certain payments made to marketing and advertising sales partners. Our marketing partners include CE manufacturers, MVPDs, mobile operators, and ISPs. Our advertising sales partners include advertising technology providers and advertising agencies. Sales and marketing expenses also include payroll, stock-based compensation, facilities, and other related expenses for personnel that support advertising sales and marketing activities. Marketing expenses are expensed as incurred. Advertising expenses were $ 2,001 million, $ 1,779 million and $ 1,732 million for the years ended December 31, 2025, 2024 and 2023, respectively.
Income Taxes
The Company records a provision for income taxes for the anticipated tax consequences of the reported results of operations using the asset and liability method. Deferred income taxes are recognized by applying enacted statutory tax rates applicable to future years to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases as well as net operating loss and tax credit carryforwards. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. The measurement of deferred tax assets is reduced, if necessary, by a valuation allowance for any tax benefits for which future realization is uncertain. The Company accounts for the tax effects of global intangible low tax income as a current period expense.
The Company does not recognize certain tax benefits from uncertain tax positions within the provision for income taxes. The Company may recognize a tax benefit only if it is more likely than not the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such positions are then measured based on the largest benefit that has a greater than 50% likelihood of being realized upon settlement. The Company recognizes interest and penalties related to uncertain tax positions in income tax expense. See Note 11 Income Taxes to the consolidated financial statements for further information regarding income taxes.
Foreign Currency
The functional currency for the Company's subsidiaries is determined based on the primary economic environment in which the subsidiary operates. The Company translates the assets and liabilities of its non-U.S. dollar functional currency subsidiaries into U.S. dollars using exchange rates in effect at the end of each period. Revenues and expenses for these subsidiaries are translated using rates that approximate those in effect during the period. Gains and losses from these translations are recognized in cumulative translation adjustment included in “Accumulated other comprehensive income” in Stockholders’ equity on the Consolidated Balance Sheets.
The Company remeasures monetary assets and liabilities that are not denominated in the functional currency at exchange rates in effect at the end of each period. Gains and losses from these remeasurements are recognized in “Interest and other income (expense)” in the Consolidated Statements of Operations. Foreign exchange losses were $ 123 million, $ 18 million, and $ 293  million for the years ended
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December 31, 2025, 2024, and 2023, respectively. These losses were primarily due to the non-cash remeasurement of our Senior Notes denominated in Euro and the remeasurement of cash and content liability positions denominated in currencies other than functional currencies. Foreign exchange losses for the years ended December 31, 2025 and December 31, 2024 were net of hedging impacts. No hedging gains or losses were recognized in the Consolidated Statements of Operations in the year ended December 31, 2023. See Note 8 Derivative Financial Instruments and Hedging Activities for further information.
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 recognizes derivative instruments at fair value as either assets (presented in “Other current assets” and “Other non-current assets”) or liabilities (presented in “Accrued expenses and other liabilities” and “Other non-current liabilities”) on the Company’s Consolidated Balance Sheets. The Company classifies derivative instruments in the Level 2 category within the fair value hierarchy.
Cash flow hedges
The Company enters into forward contracts to manage the foreign exchange risk on forecasted revenue transactions denominated in currencies other than the U.S. dollar, as well as the foreign exchange risk on forecasted transactions and firm commitments related to the licensing and production of foreign currency-denominated content assets. These forward contracts are designated as cash flow hedges of foreign currency firm commitments and forecasted transactions and generally have maturities of 36 months or less. The hedging contracts may reduce, but do not entirely eliminate, the effect of foreign currency exchange movements, and the Company may choose not to hedge certain exposures.
The gain or loss on derivative instruments designated as cash flow hedges of forecasted foreign currency revenue is initially reported as a component of accumulated other comprehensive income (“AOCI”) and reclassified into “Revenues” on the Consolidated Statements of Operations in the same period the forecasted transaction affects earnings. The gain or loss on derivative instruments designated as cash flow hedges of firmly committed or forecasted transactions related to the licensing and production of content assets is initially reported as a component of AOCI and reclassified into “Cost of Revenues” on the Consolidated Statements of Operations in the same period the hedged transaction affects earnings, which occurs as the underlying hedged content assets are amortized. Cash flows from hedging activities are classified in the same category as the cash flows for the underlying item being hedged within “Net cash provided by operating activities” on the Consolidated Statements of Cash Flows.
In the event that the likelihood of occurrence of the underlying forecasted transactions is determined to be probable not to occur, the gains or losses on the related cash flow hedges are reclassified from AOCI to “Interest and other income (expense)” in the Consolidated Statements of Operations in the period of dedesignation.
Fair value hedges
The Company designates forward contracts as fair value hedges to manage the foreign exchange risk on its foreign-currency denominated debt. These hedges may reduce, but do not entirely eliminate, the effect of foreign currency exchange movements, and the Company may choose not to hedge the full amount of its exposure. The gain or loss on derivative instruments designated as fair value hedges included in the assessment of hedge effectiveness is recognized in “Interest and other income (expense),” net with the offsetting foreign currency remeasurement gains and losses on the hedged items. The Company excludes forward points from the assessment of hedge effectiveness and recognizes the initial value of the excluded component over the life of the hedging instrument in “Interest and other income (expense)” on the Consolidated Statements of Operations. The difference between changes in fair value of the excluded component and the amount recognized in earnings is recognized as a component in AOCI. Cash flows from hedging activities are classified in the same category as the cash flows for the underlying item being hedged within “Net cash provided by (used in) financing activities” on the Consolidated Statements of Cash Flows.
Net investment hedges
The Company designates a portion of its foreign currency-denominated debt as net investment hedges to manage the foreign exchange risk on its investment in certain foreign subsidiaries. These hedges may reduce, but do not entirely eliminate, the effect of foreign currency exchange movements, and the Company may choose not to hedge certain exposures. The gains or losses on these non-derivative instruments are reported as a component of AOCI as part of the cumulative translation adjustment on the Company’s Consolidated Balance Sheets. The accumulated gains and losses remain in AOCI until the hedged net investment is sold or liquidated, at which point the amounts recognized in AOCI are reclassified into earnings.
Derivative instruments not designated as hedging instruments
The Company enters into forward contracts to manage the foreign exchange risk on intercompany transactions and monetary assets and liabilities that are not denominated in the functional currencies of the Company and its subsidiaries. These derivative instruments are not designated as hedging instruments and may reduce, but do not entirely eliminate, the effect of foreign currency exchange movements. The gains or losses on derivative instruments not designated as hedging instruments are recorded in “Interest and other income (expense)” in the
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Consolidated Statements of Operations. Cash flows related to these derivative instruments are classified within “Net cash provided by operating activities” on the Consolidated Statements of Cash Flows.
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.
Stock-Based Compensation
The Company grants non-qualified stock options to its employees on a monthly basis. For certain executive officers, the Company grants restricted stock units (“RSUs”) and performance-based restricted stock units (“PSUs”). Stock-based compensation expense is based on the fair value of the stock awards at the grant date and is recognized, net of forfeitures, over the requisite service period. See Note 10 Stockholders' Equity to the consolidated financial statements for further information regarding stock-based compensation.

2. Revenue Recognition
The following table summarizes streaming revenues by region for the years ended December 31, 2025, 2024 and 2023. Total streaming revenues are inclusive of hedging gains (losses) of $( 91 ) million and $ 124  million for the years ended December 31, 2025 and 2024, respectively. No hedging gains and losses were recognized in total streaming revenues for the year ended December 31, 2023. See Note 8 Derivative Financial Instruments and Hedging Activities for further information.

Year Ended December 31,

  2025 2024 2023
  (in thousands)
United States and Canada (UCAN) $ 19,957,152   $ 17,359,369   $ 14,873,783  
Europe, Middle East, and Africa (EMEA) 14,514,646   12,387,035   10,556,487  
Latin America (LATAM) 5,357,521   4,839,816   4,446,461  
Asia-Pacific (APAC) 5,353,717   4,414,746   3,763,727  
Total Streaming Revenues $ 45,183,036   $ 39,000,966   $ 33,640,458  

Deferred revenue consists of membership fees billed that have not been recognized, as well as gift and other prepaid memberships that have not been fully redeemed. As of December 31, 2025, total deferred revenue was $ 1,776  million, the vast majority of which was related to membership fees billed that are expected to be recognized as revenue within the next month. The remaining deferred revenue balance, which is related to gift cards and other prepaid memberships, will be recognized as revenue over the period of service after redemption, which is expected to occur over the next 12 months. Deferred revenue increased $ 255 million from $ 1,521 million as of December 31, 2024 to $ 1,776 million as of December 31, 2025. Deferred revenue balances may fluctuate due to the number of paid memberships and the price of our memberships.

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3. Earnings per Share
On November 14, 2025, the Company completed the Stock Split to all shareholders of record as of November 10, 2025.
Outstanding share and per-share amounts disclosed for all periods provided have been retroactively adjusted to reflect the effects of the Stock Split.
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, as adjusted for the Stock Split, is as follows:
 

  Year Ended December 31,
  2025 2024 2023
  (in thousands, except per share data)
Basic earnings per share:
Net income $ 10,981,201   $ 8,711,631   $ 5,407,990  
Shares used in computation:
Weighted-average shares of common stock outstanding 4,249,512   4,295,191   4,415,712  
Basic earnings per share $ 2.58   $ 2.03   $ 1.22  
Diluted earnings per share:
Net income $ 10,981,201   $ 8,711,631   $ 5,407,990  
Shares used in computation:
Weighted-average shares of common stock outstanding 4,249,512   4,295,191   4,415,712  
Effect of dilutive stock-based awards 94,351   97,417   79,254  
Weighted-average number of shares 4,343,863   4,392,608   4,494,966  
Diluted earnings per share
$ 2.53   $ 1.98   $ 1.20  

The following table summarizes the potential shares of common stock excluded from the diluted calculation, as adjusted for the Stock Split, as their inclusion would have been anti-dilutive:
 

  Year Ended December 31,
  2025 2024 2023
  (in thousands)
Stock-based awards 818   2,432   41,091  

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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 December 31, 2025 and 2024:

  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 (1)
594,469   —   —   594,469   565,791   28,678   —   —  

$ 9,067,872   $ —   $ —   $ 9,067,872   $ 9,033,681   $ 28,678   $ 5,369   $ 144  

  As of December 31, 2024
  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 $ 4,866,753   $ —   $ —   $ 4,866,753   $ 4,864,207   $ —   $ 2,472   $ 74  
Level 1 securities:
Money market funds 2,676,314   —   —   2,676,314   2,676,256   —   —   58  
Level 2 securities:
Time Deposits (1)
301,374   —   —   301,374   264,270   37,104   —   —  
Government securities 1,738,642   3,260   1,741,902   —   1,741,902   —   —  
$ 9,583,083   $ 3,260   $ —   $ 9,586,343   $ 7,804,733   $ 1,779,006   $ 2,472   $ 132  

(1) The majority of the Company's time deposits are international deposits, which mature within one year.
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.
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5. Balance Sheet Components
Content Assets, Net
Content assets consisted of the following:

As of December 31,
2025 2024
(in thousands)
Licensed content, net
$ 12,138,578   $ 12,422,309  

Produced content, net

Released, less amortization
10,687,444   10,151,543  
In production
9,210,735   9,317,367  
In development and pre-production
741,635   561,243  
20,639,814   20,030,153  

Content assets, net $ 32,778,392   $ 32,452,462  

As of December 31, 2025, approximately $ 6,381  million, $ 2,280  million, and $ 1,469  million of the $ 12,139  million unamortized cost of the licensed content is expected to be amortized in each of the next three years. As of December 31, 2025, approximately $ 4,309  million, $ 2,784  million, and $ 1,840  million of the $ 10,687  million unamortized cost of the produced content that has been released is expected to be amortized in each of the next three years.
The following table summarizes the amortization of content assets:

Year Ended December 31,
  2025 2024 2023
(in thousands)
Licensed content $ 8,713,558   $ 7,689,014   $ 7,145,446  
Produced content (1)
7,708,608   7,612,503   7,051,991  
Total $ 16,422,166   $ 15,301,517   $ 14,197,437  

(1) Tax incentives earned on qualified production spend generally reduce the cost-basis of content assets and result in lower content amortization over the life of the title. For the years ended December 31, 2025, 2024 and 2023, tax incentives resulted in lower content amortization on produced content of approximately $ 1,000  million, $ 899  million and $ 835  million, respectively.

Property and Equipment, Net
Property and equipment and accumulated depreciation consisted of the following:

As of December 31, Estimated Useful Lives (in Years)
2025 2024
(in thousands)
Land $ 155,664   $ 85,000  
Buildings and improvements 537,082   475,684   30 years
Leasehold improvements 1,263,051   1,026,593   Over life of lease
Furniture and fixtures 157,984   134,987   3 years
Information technology 572,407   446,419   3 - 5 years

Corporate aircraft 99,164   99,175   8 - 10 years

Machinery and equipment 30,879   15,135   3 - 5 years

Capital work-in-progress 285,010   228,300  
Property and equipment, gross 3,101,241   2,511,293  
Less: Accumulated depreciation ( 1,096,891 ) ( 917,537 )
Property and equipment, net $ 2,004,350   $ 1,593,756  

    
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Leases
The Company has entered into operating leases primarily for real estate. These leases generally have terms which range from 1 year to 15 years, and often include one or more options to renew. These renewal terms can extend the lease term from 1 year to 20 years, and are included in the lease term when it is reasonably certain that the Company will exercise the option. These 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. Operating lease right-of-use assets and liabilities are recognized at the commencement date based on the present value of lease payments over the lease term. The Company has entered into various short-term operating leases with an initial term of twelve months or less. These leases are not recorded on the Company's Consolidated Balance Sheets. All operating lease expense is recognized on a straight-line basis over the lease term. Because the rate implicit in each lease is not readily determinable, the Company uses its incremental borrowing rate to determine the present value of the lease payments. The Company has certain contracts for real estate which may contain lease and non-lease components which it has elected to treat as a single lease component.
The components of lease costs for the years ended December 31, 2025, 2024 and 2023 were as follows:

Year ended December 31,
  2025 2024 2023
(in thousands)
Operating lease cost $ 503,637   $ 468,282   $ 430,856  
Short-term lease cost 207,324   197,691   207,822  
Total lease cost $ 710,961   $ 665,973   $ 638,678  

Information related to the Company's operating right-of-use assets and related operating lease liabilities were as follows:

Year ended December 31,
2025 2024 2023
(in thousands)
Cash paid for operating lease liabilities $ 506,624   $ 509,296   $ 451,525  
Right-of-use assets obtained in exchange for new operating lease obligations 465,420   442,391   196,639  

As of December 31,
2025 2024
(in thousands, except lease term and discount rate)
Operating lease right-of-use assets, net $ 2,207,161   $ 2,102,310  

Current operating lease liabilities $ 460,475   $ 428,482  
Non-current operating lease liabilities 2,052,526   1,983,688  
Total operating lease liabilities $ 2,513,001   $ 2,412,170  

Weighted-average remaining lease term 7.0 years 6.9 years
Weighted-average discount rate 3.8   % 3.5   %

Maturities of operating lease liabilities as of December 31, 2025 were as follows (in thousands):
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Due in 12 month period ended December 31,
2026 $ 555,684  
2027 481,542  
2028 422,982  
2029 351,107  
2030 292,154  
Thereafter 782,470  
2,885,939  
Less imputed interest ( 372,938 )
Total operating lease liabilities $ 2,513,001  

Other Current Assets
Other current assets consisted of the following:

As of
December 31,
2025 December 31,
2024
(in thousands)
Trade receivables
$ 2,031,476   $ 1,335,304  
Prepaid expenses
498,054   431,924  
Other (1)
1,428,302   1,749,412  
Total other current assets
$ 3,957,832   $ 3,516,640  

(1) $ 552  million and $ 653  million of receivables related to tax incentives earned on production spend are included in Other as of December 31, 2025 and 2024, respectively.

6.     Acquisitions
In December 2025, the Company completed an acquisition which was accounted for as a business combination for a total purchase price of approximately $ 28  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"). WBD is a leading global media and entertainment company and will separate its Global Linear Networks business, Discovery Global, into a new publicly-traded company prior to the closing of the WBD transaction. See Note 9 Commitments and Contingencies for further details.
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7. Debt
As of December 31, 2025, the Company had aggregate outstanding notes of $ 14,463 million, net of $ 56 million of issuance costs and discounts, with varying maturities (the “Notes”). As of December 31, 2024, the Company had aggregate outstanding notes of $ 15,583 million, net of $ 70  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 loss, net of hedging impacts, totaling $ 72 million for the year ended December 31, 2025). 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 December 31, 2025 and December 31, 2024:

Principal Amount at Par Level 2 Fair Value as of
December 31,
2025 December 31,
2024 Issuance Date Maturity December 31,
2025 December 31,
2024
(in millions) (in millions)

5.875 % Senior Notes
—   800   February 2015 February 2025 —   801  
3.000 % Senior Notes (1)
—   487   April 2020 June 2025 —   487  
3.625 % Senior Notes
—   500   April 2020 June 2025 —   497  
4.375 % Senior Notes
1,000   1,000   October 2016 November 2026 1,006   998  
3.625 % Senior Notes (1)
1,526   1,346   May 2017 May 2027 1,550   1,375  
4.875 % Senior Notes
1,600   1,600   October 2017 April 2028 1,634   1,607  
5.875 % Senior Notes
1,900   1,900   April 2018 November 2028 1,998   1,970  
4.625 % Senior Notes (1)
1,292   1,139   October 2018 May 2029 1,363   1,220  
6.375 % Senior Notes
800   800   October 2018 May 2029 857   848  
3.875 % Senior Notes (1)
1,409   1,242   April 2019 November 2029 1,455   1,293  
5.375 % Senior Notes
900   900   April 2019 November 2029 939   918  
3.625 % Senior Notes (1)
1,292   1,139   October 2019 June 2030 1,322   1,174  
4.875 % Senior Notes
1,000   1,000   October 2019 June 2030 1,025   996  
4.900 % Senior Notes
1,000   1,000   August 2024 August 2034 1,025   982  
5.400 % Senior Notes
800   800   August 2024 August 2054 777   782  
$ 14,519   $ 15,653   $ 14,951   $ 15,948  

(1) The following Senior Notes have a principal amount denominated in Euro: 3.000 % Senior Notes for € 470  million, 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.
In the year ended December 31, 2025, the Company repaid upon maturity the $ 800  million aggregate principal amount of its 5.875 % Senior Notes, the € 470  million aggregate principal amount of its 3.000 % Senior Notes, and the $ 500  million aggregate principal amount of its 3.625 % Senior Notes.
Each of the Notes are repayable in whole or in part upon the occurrence of a change of control, at the option of the holders, at a purchase price in cash equal to 101 % of the principal plus accrued interest. 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. The Notes include, among other terms and conditions, limitations on the Company's ability to create, incur or allow certain liens, and 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 limit the ability to enter into sale and lease-back transactions and create, assume, incur or guarantee additional indebtedness of certain of the Company's subsidiaries. As of December 31, 2025 and December 31, 2024, 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 December 31, 2025, no amounts have been borrowed under the Revolving Credit Agreement.
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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 December 31, 2025 and December 31, 2024, 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 December 31, 2025.
WBD Financing
On December 4, 2025, the Company entered into a bridge commitment letter pursuant to which the commitment parties agreed to provide, subject to the satisfaction of customary closing conditions, a $ 59  billion senior unsecured bridge term loan facility to finance the purchase price for the WBD transaction, to pay fees, costs and expenses incurred in connection with the WBD transaction and, at the Company’s option, to refinance certain indebtedness (the “Bridge Facility Commitments”). As of December 31, 2025, no amounts have been utilized under the Bridge Facility Commitments and the Bridge Facility Commitments have been reduced on a dollar-for-dollar basis by the amounts of the Transactions Revolving Credit Agreement and the DDTL Credit Agreement described below to $ 34  billion.
On December 19, 2025, the Company entered into a $ 5  billion senior unsecured revolving credit facility (the “Transactions Revolving Credit Agreement”). Borrowings under the Transactions Revolving Credit Agreement may be used for working capital and general corporate purposes and to finance the purchase price for the WBD transaction, to pay fees, costs and expenses incurred in connection with the WBD transaction and, at the Company’s option, to refinance certain indebtedness. Revolving loans under the Transactions Revolving Credit Agreement may be borrowed, repaid and reborrowed until the date that is the earliest of (i) the date that is the third anniversary of the date of the consummation of the WBD transaction, (ii) the date the Amended and Restated Merger Agreement is terminated in accordance with its terms and (iii) December 19, 2030, at which time all amounts borrowed must be repaid. Borrowings under the Transactions Revolving Credit Agreement bear interest, at the Company’s option, at either (i) the Alternate Base Rate plus an applicable margin or (ii) a per annum rate equal to a term SOFR rate (the “Term SOFR Rate”) plus an applicable margin. The applicable margin for Alternate Base Rate loans will range from 0 % to 0.10 %, and the applicable margin for Term SOFR Rate loans will range from 0.60 % to 1.10 %, each based on the Company’s credit ratings. The Transactions 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. The Transactions Revolving Credit Agreement 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 December 31, 2025, the Company was in compliance with all related covenants and ratios and no amounts have been borrowed under the Transactions Revolving Credit Agreement.
On December 19, 2025, the Company entered into a senior unsecured delayed draw credit facility (the “DDTL Credit Agreement”). The DDTL Credit Agreement provides for a two-year $ 10  billion unsecured delayed draw term loan credit facility (the “2Y DDTL Facility”) and a three-year $ 10  billion unsecured delayed draw term loan credit facility (the “3Y DDTL Facility”). Borrowings under each of the 2Y DDTL Facility and the 3Y DDTL Facility may be used to finance the purchase price for the WBD transaction, to pay fees, costs and expenses incurred in connection with the WBD transaction and, at the Company’s option, to refinance certain indebtedness. Delayed draw term loans under the DDTL Credit Agreement will bear interest, at the Company’s option, at either (i) the Alternate Base Rate plus an applicable margin or (ii) the Term SOFR Rate plus an applicable margin. For the 2Y DDTL Facility, the applicable margin for Alternate Base Rate loans will range from 0 % to 0.125 %, and the applicable margin for Term SOFR Rate loans will range from 0.850 % to 1.125 %, each based on the Company’s credit ratings. For the 3Y DDTL Facility, the applicable margin for Alternate Base Rate loans will range from 0 % to 0.25 %, and the applicable margin for Term SOFR Rate loans will range from 0.95 % to 1.25 %, each based on the Company’s credit ratings. The DDTL 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. The DDTL Credit Agreement 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 December 31, 2025, the Company was in compliance with all related covenants and ratios and no amounts have been borrowed under the DDTL Credit Agreement.
See Note 9 Commitments and Contingencies and Note 14 Subsequent Event for further information on the financing arrangements the Company has entered into in connection with the WBD transaction.

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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.

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

As of December 31,
2025 2024
(in thousands)
Derivatives designated as hedging instruments:

Foreign exchange contracts

Cash flow hedges
$ 21,066,760   $ 18,508,390  
Fair value hedges 2,884,792   3,819,817  
Derivatives not designated as hedging instruments:

Foreign exchange contracts
1,555,502   1,432,136  
Total
$ 25,507,054   $ 23,760,343  

As of December 31, 2025 and December 31, 2024, approximately $ 1.9  billion and $ 1.0  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 December 31, 2025 and December 31, 2024, the carrying amount of the Company's Euro-denominated Senior Notes (included in “Long-term debt” on the Company's Consolidated Balance Sheets), which were designated as the hedged items in fair value hedges, was approximately $ 2.9  billion and $ 3.6  billion, respectively.
See Note 7 Debt for further information on the Company’s debt obligations.
Fair Value of Derivative Contracts
The fair value of the Company’s outstanding derivative instruments was as follows:

  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  
Derivatives not designated as hedging instruments:
Foreign exchange contracts 3,463   —   11,704   —  
Total $ 196,291   $ 88,985   $ 438,045   $ 214,574  

  As of December 31, 2024
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 $ 580,065   $ 406,677   $ 303,425   $ 83  
Derivatives not designated as hedging instruments:
Foreign exchange contracts 16,211   —   14,492   —  
Total $ 596,276   $ 406,677   $ 317,917   $ 83  

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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 December 31, 2025, the pre-tax net accumulated loss on our foreign currency cash flow hedges included in AOCI on the Consolidated Balance Sheets expected to be recognized in earnings within the next 12 months is $ 275  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 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 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  

  As of December 31, 2024
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 $ 1,002,953   $ —   $ 1,002,953   $ ( 316,320 ) $ ( 1,800 ) $ 684,833  
Derivative liabilities 318,000   —   318,000   ( 316,320 ) —   1,680  

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:
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Year Ended December 31,
2025 2024 2023
(in thousands)
Cash flow hedges:
Foreign exchange contracts
Amount included in the assessment of effectiveness $ ( 1,393,364 ) $ 1,195,738   $ ( 155,730 )
Fair value hedges:
Foreign exchange contracts
Amount excluded from the assessment of effectiveness ( 71,999 ) ( 14,334 ) —  
Net investment hedges:
Foreign currency-denominated debt
Amount included in the assessment of effectiveness ( 144,656 ) 32,400   —  
Total $ ( 1,610,019 ) $ 1,213,804   $ ( 155,730 )

The gains (losses) on hedged items and derivative instruments recognized in the Consolidated Statement of Operations were as follows:

Year Ended December 31,
2025
Revenues Cost of Revenues Interest and other income (expense)
(in thousands)
Total amounts presented in the Consolidated Statements of Operations $ 45,183,036   $ 23,275,329   $ 172,459  

Gains (losses) on derivatives in cash flow hedging relationship
Foreign exchange contracts
Amount of gains (losses) reclassified from AOCI ( 91,143 ) 1,437   —  
Gains (losses) on derivatives in fair value hedging relationship
Foreign exchange contracts
Hedged items —   —   ( 470,441 )
Derivatives designated as hedging instruments —   —   481,416  
Amount excluded from assessment of effectiveness and recognized in earnings based on amortization approach —   —   ( 59,201 )
Losses on derivatives not designated as hedging instruments
Foreign exchange contracts —   —   ( 97,865 )

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Year Ended December 31,
2024
Revenues Cost of Revenues Interest and other income (expense)
(in thousands)
Total amounts presented in the Consolidated Statements of Operations $ 39,000,966   $ 21,038,464   $ 266,776  

Gains on derivatives in cash flow hedging relationship
Foreign exchange contracts
Amount of gains reclassified from AOCI 124,010   1,629   —  
Gains (losses) on derivatives in fair value hedging relationship
Foreign exchange contracts
Hedged items —   —   196,660  
Derivatives designated as hedging instruments —   —   ( 201,239 )
Amount excluded from assessment of effectiveness and recognized in earnings based on amortization approach —   —   ( 23,567 )
Gains on derivatives not designated as hedging instruments
Foreign exchange contracts —   —   63,291  

No gains or losses on derivative instruments were reclassified from AOCI into the Consolidated Statements of Operations in the year ended December 31, 2023.

9. Commitments and Contingencies
Content
At 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.
At December 31, 2024, the Company had $ 23.2 billion of obligations comprised of $ 4.4 billion included in “Current content liabilities” and $ 1.8 billion of “Non-current content liabilities” on the Consolidated Balance Sheets and $ 17.0 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 December 31,
2025 2024
  (in thousands)
Less than one year $ 11,528,030   $ 11,424,696  
Due after one year and through three years 8,376,160   8,113,910  
Due after three years and through five years 3,041,538   2,809,834  
Due after five years 1,093,500   900,491  
Total content obligations $ 24,039,228   $ 23,248,931  

    
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.

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Acquisitions
On December 4, 2025, the Company entered into a definitive agreement and plan of merger with WBD to acquire WBD's streaming and studios businesses, including its film and television studios, HBO Max and HBO, which was then amended by the parties thereto on January 19, 2026, by the Amended and Restated Merger Agreement. Under the terms of the Amended and Restated Merger Agreement, each WBD stockholder will receive $ 27.75 in cash (as may be adjusted in accordance with the terms of the Amended and Restated Merger Agreement) for each share of WBD common stock outstanding as of immediately prior to the closing of the WBD transaction, for a total equity value of approximately $ 72.0  billion and an enterprise value of approximately $ 82.7  billion (in each case, as of December 4, 2025). The total equity value and enterprise value of the WBD transaction may fluctuate based on WBD's capitalization as of the closing of the WBD transaction. The Company expects the WBD transaction to close in 12-18 months from December 4, 2025, subject to receipt of required regulatory approvals, approval of WBD stockholders, the consummation of the separation and distribution of Discovery Global and other customary closing conditions. The Amended and Restated Merger Agreement provides that, upon termination of the Amended and Restated Merger Agreement under specified circumstances, a termination fee of $ 5.8  billion may be payable by Netflix to WBD. See Note 7 Debt and Note 14 Subsequent Event for further information on the financing arrangements the Company has entered into in connection with its transaction with WBD.

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.
Similar to other U.S. companies doing business in Brazil, the Company is involved in a number of matters with the local tax authorities as they pertain to non-income tax assessments. There is inherent complexity and uncertainty regarding these matters, and the final outcomes may be materially different from our expectations. During the year ended December 31, 2025, developments in another taxpayer’s judicial proceedings influenced our evaluation of the Company’s most significant non-income tax matter in Brazil and we now believe that it is probable that a loss will be incurred. The cumulative loss recognized as an operating expense in the third quarter of the current year related to non-income tax assessments with the Brazilian tax authorities was approximately $ 619  million. We continue to accrue incremental non-income taxes that the Company believes are probable of being assessed.

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 guarantees.

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10. Stockholders’ Equity
Voting Rights
The holders of each share of common stock shall be entitled to one vote per share on all matters to be voted upon by the Company’s stockholders.
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.
Restricted Stock Unit Awards
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.
Stock Split
On October 30, 2025, the Company's Board of Directors approved the Stock Split to all shareholders of record as of November 10, 2025. The Stock Split was effected on November 14, 2025.
On November 14, 2025, the Company's Board of Directors adopted an amendment to the Company's Amended and Restated Certificate of Incorporation, to proportionately increase the number of shares of the Company's authorized common stock from 4,990,000,000 to 49,900,000,000 .
References made to share or per-share amounts disclosed for all periods presented have been retroactively adjusted to reflect the effects of the Stock Split.
Stock Option Activity
The following table summarizes the activities related to the Company’s stock options, as adjusted for the Stock Split:
 

  Options Outstanding
  Number of
Shares Weighted- Average Exercise Price
(per share) Weighted- Average Remaining Contractual Term (in years) Aggregate
Intrinsic Value
(in thousands)
Balances as of December 31, 2022 198,968,610   $ 24.22  
Granted 17,292,180   37.25  
Exercised ( 19,265,980 ) 8.73  
Expired ( 43,720 ) 3.64  
Balances as of December 31, 2023 196,951,090   $ 26.89  
Granted 5,758,560   62.09  
Exercised ( 48,460,480 ) 17.22  
Expired ( 59,150 ) 5.61  
Balances as of December 31, 2024 154,190,020   $ 31.25  
Granted 4,171,629   108.79  
Exercised ( 30,638,245 ) 21.73  
Expired ( 43,600 ) 9.11  
Balances as of December 31, 2025 127,679,804   $ 36.07   4.79 $ 7,430,160  

Vested and exercisable as of December 31, 2025
127,679,804   $ 36.07   4.79 $ 7,430,160  

The aggregate intrinsic value in the table above represents the total pretax intrinsic value (the difference between the Company’s closing stock price on the last trading day of 2025 and the exercise price, multiplied by the number of in-the-money options) that would have been
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received by the option holders had all option holders exercised their options on the last trading day of 2025. This amount changes based on the fair market value of the Company’s common stock.
A summary of the amounts related to option exercises, is as follows:

Year Ended December 31,

2025 2024 2023
(in thousands)
Total intrinsic value of options exercised $ 2,560,914   $ 2,352,829   $ 610,594  
Cash received from options exercised 666,965   832,887   169,990  

The total fair value of stock options that vested during the years ended December 31, 2025, 2024 and 2023 was $ 251  million, $ 242  million and $ 311  million, respectively.
Restricted Stock Unit Activity
The following table summarizes the activities related to the Company’s unvested RSUs and PSUs, as adjusted for the Stock Split:

Unvested Restricted Stock Units
Number of
Shares Weighted-
Average
Grant-Date Fair Value
(per share)
Balances as of December 31, 2023 —   $ —  
Granted
1,599,780   68.64
Vested
( 266,600 ) 56.20  
Forfeited —   —  
Balances as of December 31, 2024 1,333,180   $ 71.12  
Granted (1)
1,227,850   111.18
Vested (1)
( 959,450 ) 76.48  
Forfeited ( 16,320 ) 93.12  
Balances as of December 31, 2025 1,585,260   $ 98.68  

(1) Amounts exclude 264,300 incremental PSU awards that will be granted and 528,600 incremental PSU awards that will vest based on the achievement of market-based performance targets during the performance period ended December 31, 2025, but have not been settled as of December 31, 2025.
The total fair value of RSUs that vested during the year ended December 31, 2025 and December 31, 2024 was $ 52  million and $ 15  million, respectively. No RSUs or PSUs were granted in the year ended December 31, 2023.
Stock-Based Compensation
The following table summarizes total stock-based compensation expense and the related income tax impact:

Year Ended December 31,
2025 2024 2023
(in thousands)
Total stock-based compensation expense $ 368,449   $ 272,588   $ 339,368  
Total income tax impact on provision 54,338   43,876   61,588  

As of December 31, 2025, $ 47  million of total unrecognized compensation cost related to unvested RSUs and PSUs is expected to be recognized over a weighted-average period of 1.53 years.
Stock Repurchases
In September 2023, the Board of Directors authorized the repurchase of up to $ 10  billion of the Company’s common stock, with no expiration date, and in December 2024, the Board of Directors increased the share repurchase authorization by an additional $ 15  billion, also with no expiration date. 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
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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 year ended December 31, 2025, the Company repurchased 86,536,215 shares for an aggregate amount of $ 9.1  billion (excluding the 1% excise tax on stock repurchases as a result of the Inflation Reduction Act of 2022). As of December 31, 2025, $ 8.0  billion remains available for repurchases. Shares repurchased by the Company are accounted for when the transaction is settled. As of December 31, 2025, 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 table summarizes the changes in accumulated balances of other comprehensive income (loss):

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, 2022 $ ( 217,306 ) $ —   $ —   $ —   $ —   $ —   $ ( 217,306 )
Other comprehensive income (loss) before reclassifications
113,384   —   ( 155,730 ) —   —   35,707   ( 6,639 )
Amounts reclassified from accumulated other comprehensive income (loss)
—   —   —   —   —   —   —  
Net change in accumulated other comprehensive income (loss)
113,384   —   ( 155,730 ) —   —   35,707   ( 6,639 )
Balances as of December 31, 2023 ( 103,922 ) —   ( 155,730 ) —   —   35,707   ( 223,945 )
Other comprehensive income (loss) before reclassifications
( 272,911 ) 32,400   1,195,738   ( 14,334 ) 3,260   ( 279,408 ) 664,745  
Amounts reclassified from accumulated other comprehensive income (loss)
—   —   ( 125,639 ) 23,567   —   23,434   ( 78,638 )
Net change in accumulated other comprehensive income (loss)
( 272,911 ) 32,400   1,070,099   9,233   3,260   ( 255,974 ) 586,107  
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
183,218   ( 144,656 ) ( 1,393,364 ) ( 71,999 ) ( 3,139 ) 373,107   ( 1,056,833 )
Amounts reclassified from accumulated other comprehensive income (loss)
—   —   89,706   59,201   ( 121 ) ( 34,497 ) 114,289  
Net change in accumulated other comprehensive income (loss)
183,218   ( 144,656 ) ( 1,303,658 ) ( 12,798 ) ( 3,260 ) 338,610   ( 942,544 )
Balances as of December 31, 2025 $ ( 193,615 ) $ ( 112,256 ) $ ( 389,289 ) $ ( 3,565 ) $ —   $ 118,343   $ ( 580,382 )

The following tables summarize the amounts reclassified from AOCI to the Consolidated Statement of Operations:
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Year Ended December 31,
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   $ ( 23 ) $ 98  
Gains (losses) on derivatives in cash flow hedging relationship
Foreign exchange contracts
Amount of gains (losses) reclassified from AOCI ( 91,143 ) 1,437   —   20,744   ( 68,962 )
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 —   —   ( 59,201 ) 13,776   ( 45,425 )
Total $ ( 91,143 ) $ 1,437   $ ( 59,080 ) $ 34,497   $ ( 114,289 )

Year Ended December 31,
2024
Revenues Cost of Revenues Interest and other income (expense) Provision for Income Taxes Total Reclassifications
(in thousands)
Gains (losses) on derivatives in cash flow hedging relationship
Foreign exchange contracts
Amount of gains (losses) reclassified from AOCI $ 124,010   $ 1,629   $ —   $ ( 28,844 ) $ 96,795  
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 —   —   ( 23,567 ) 5,410   ( 18,157 )
Total $ 124,010   $ 1,629   $ ( 23,567 ) $ ( 23,434 ) $ 78,638  

No amounts were reclassified from AOCI into the Consolidated Statements of Operations in the year ended December 31, 2023.

11.     Income Taxes
Income before provision for income taxes was as follows:

  Year Ended December 31,
  2025 2024 2023
  (in thousands)
United States $ 12,198,273   $ 9,101,391   $ 5,602,762  
Foreign 524,279   864,266   602,643  
Income before income taxes $ 12,722,552   $ 9,965,657   $ 6,205,405  

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The components of provision for income taxes for all periods presented were as follows:

  Year Ended December 31,
  2025 2024 2023
  (in thousands)
Current tax provision:
Federal $ 1,317,011   $ 1,093,667   $ 854,170  
State 311,863   214,814   181,684  
Foreign 561,577   536,915   304,539  
Total current 2,190,451   1,845,396   1,340,393  
Deferred tax provision:
Federal ( 155,477 ) ( 520,510 ) ( 412,760 )
State ( 34,115 ) ( 41,700 ) ( 55,475 )
Foreign ( 259,508 ) ( 29,160 ) ( 74,743 )
Total deferred ( 449,100 ) ( 591,370 ) ( 542,978 )
Provision for income taxes $ 1,741,351   $ 1,254,026   $ 797,415  

A reconciliation of the provision for income taxes to the amount computed by applying the 21 % statutory U.S. federal income tax rate to income before income taxes after the adoption of ASU 2023-09 is as follows:

  Year Ended December 31,
  2025
  (in thousands) Percent
Tax at U.S. Statutory Rate $ 2,671,734   21.0   %
State and Local Income Taxes (1)
191,271   1.5   %
Foreign Tax Effects
Brazil
Withholding tax on services 238,233   1.9   %
Others ( 77,189 ) ( 0.6 ) %
Other foreign jurisdictions 23,290   0.2   %
Effect of Cross-Border Tax Laws
Foreign-derived intangible income ( 656,828 ) ( 5.2 ) %
Foreign tax credit for withholding taxes ( 292,148 ) ( 2.3 ) %
Other 32,815   0.3   %
Tax Credits
Research and development tax credits ( 184,709 ) ( 1.5 ) %
Other ( 9,748 ) ( 0.1 ) %
Changes in Valuation Allowances ( 8,615 ) ( 0.1 ) %
Nontaxable and Nondeductible items
Share-based payment awards ( 393,156 ) ( 3.1 ) %
Others 80,904   0.6   %
Changes in Unrecognized Tax Benefits 130,400   1.0   %
Other Adjustments ( 4,903 ) 0.1   %
Effective Tax Rate $ 1,741,351   13.7   %

(1) The states and local jurisdictions that contribute to the majority (greater than 50%) of the tax effect in this category include New York state and city, California, Illinois, New Jersey, and New Mexico.

A reconciliation of the provision for income taxes to the amount computed by applying the 21 % statutory U.S. federal income tax rate to income before income taxes for years prior to the adoption of ASU 2023-09 is as follows:
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  Year Ended December 31,
  2024 2023
  (in thousands)
Expected tax expense at U.S. federal statutory tax rate $ 2,092,710   $ 1,303,123  
State income taxes, net of federal income tax effect 166,311   104,717  
Foreign earnings at other than U.S. rates 13,909   ( 32,292 )
Research and development tax credit ( 185,312 ) ( 87,036 )
Excess tax benefits on stock-based compensation ( 435,909 ) ( 119,043 )
Foreign-derived intangible income deduction ( 502,968 ) ( 426,597 )
Nontaxable and nondeductible items 70,386   41,782  
Other 34,899   12,761  
Provision for income taxes $ 1,254,026   $ 797,415  
Effective Tax Rate 13   % 13   %

The components of deferred tax assets and liabilities were as follows:
 

  As of December 31,
  2025 2024
  (in thousands)
Deferred tax assets:
Stock-based compensation $ 438,684   $ 440,889  
Tax credits and net operating loss carryforwards 835,529   834,402  
Capitalized research expenses 969,243   1,075,474  
Accruals and reserves 370,568   152,142  
Operating lease liabilities 520,170   522,489  
OCI hedging losses 116,492   —  
Unrealized losses 41,988   12,157  
Other 29,426   18,197  
Total deferred tax assets 3,322,100   3,055,750  
Valuation allowance ( 617,575 ) ( 540,272 )
Net deferred tax assets 2,704,525   2,515,478  
Deferred tax liabilities:
Depreciation & amortization ( 32,780 ) ( 370,709 )
Operating right-of-use lease assets ( 448,313 ) ( 449,661 )
OCI hedging gains —   ( 220,009 )
       Acquired intangibles ( 261,493 ) ( 282,187 )
       Other ( 7,136 ) ( 15,354 )
Total deferred tax liabilities ( 749,722 ) ( 1,337,920 )
Net deferred tax assets $ 1,954,803   $ 1,177,558  

The following table shows the deferred tax assets and liabilities within our Consolidated Balance Sheets:
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  As of December 31,
  2025 2024
  (in thousands)
Total deferred tax assets:
Other non-current assets $ 2,062,078   $ 1,290,160  
Total deferred tax liabilities:
Other non-current liabilities ( 107,275 ) ( 112,602 )
Net deferred tax assets $ 1,954,803   $ 1,177,558  

As of December 31, 2025, for tax return purposes, the Company had $ 823  million of California R&D tax credit carryforwards which can be carried forward indefinitely, $ 1,018  million of state net operating loss carryforwards, which will begin to expire in 2029, $ 48  million of U.S. foreign tax credit carryforwards which will begin to expire in 2033, $ 190  million of foreign net operating loss carryforwards which will begin to expire in 2026 and $ 51  million of foreign local tax credit carryforwards, which can be carried forward indefinitely.
In evaluating its ability to realize the net deferred tax assets, the Company considered all available positive and negative evidence, including its past operating results and the forecast of future market growth, forecasted earnings, future taxable income, and prudent and feasible tax planning strategies. As of December 31, 2025, the valuation allowance of $ 618  million was primarily related to California R&D tax credits, state net operating loss carryforwards, and U.S. foreign tax credits that the Company does not expect to realize.
The unrecognized tax benefits that are not expected to result in payment or receipt of cash within one year are classified as “Other non-current liabilities” and a reduction of deferred tax assets, which is classified as “Other non-current assets” in the Consolidated Balance Sheets. As of December 31, 2025 and 2024, the total amount of gross unrecognized tax benefits was $ 566  million and $ 432  million, respectively, of which $ 336  million and $ 251  million, respectively, if recognized, would favorably impact the Company’s effective tax rate. The aggregate changes in the Company’s total gross amount of unrecognized tax benefits are summarized as follows:
 

As of December 31,
2025 2024 2023
(in thousands)
Balance at the beginning of the year $ 432,280   $ 327,105   $ 226,977  
Increases related to tax positions taken during the current period 96,108   93,325   65,630  
Increases related to tax positions taken during prior periods 50,285   15,751   76,794  
Decreases related to tax positions taken during prior periods ( 3,195 ) ( 3,901 ) ( 10,117 )
Decreases related to settlements with taxing authorities ( 9,115 ) —   ( 32,179 )
Decreases related to expiration of statute of limitations —   —   —  
Balance at the end of the year $ 566,363   $ 432,280   $ 327,105  

The Company includes interest and penalties related to unrecognized tax benefits within the provision for income taxes and in “Other non-current liabilities” in the Consolidated Balance Sheets. During the years ended December 31, 2025, 2024 and 2023, the Company recorded $ 38  million, $ 16  million, and $ 25  million, respectively, of net interest and penalties in the provision for income taxes. The amount of interest and penalties accrued at December 31, 2025 and 2024 was $ 82  million and $ 44  million, respectively.
The Company files U.S. federal, state and foreign tax returns. The Company is currently under examination by the IRS for years 2016 through 2022 and is subject to examination for 2023 and 2024. The Company is also generally subject to examination by various state and foreign jurisdictions for years 2018 through 2024. While the Company is in various stages of inquiry and examination with certain taxing authorities and believes that its tax positions will more likely than not be sustained, it is nonetheless possible that future obligations related to these matters could arise. The Company believes that adequate amounts have been reserved for any adjustments that may ultimately result from an examination.
The amounts of cash income taxes paid by the Company were as follows:
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Year Ended December 31,
2025
(in thousands)
Federal $ 1,120,172  
State and local 273,976  
Foreign
Brazil 275,106  
Korea 195,302  
All other foreign 355,828  
Income taxes, net of amounts refunded $ 2,220,384  

The amount of cash income taxes paid by the Company during the years ended December 31, 2024 and 2023 was $ 1,642  million and $ 1,155  million, respectively.

12.     Employee Benefit Plan
The Company maintains a 401(k) savings plan covering substantially all of its employees. Eligible employees may contribute up to 80 % of their annual salary through payroll deductions, but not more than the statutory limits set by the Internal Revenue Service. The Company matches employee contributions at the discretion of the Board. During the years ended December 31, 2025, 2024 and 2023, the Company’s matching contributions totaled $ 144 million, $ 128 million and $ 114 million, respectively.
Multiemployer Benefit Plans
The Company contributes to various multiemployer defined pension plans under the terms of collective bargaining agreements that cover our union-represented employees. The risks of participating in multiemployer pension plans are different from single-employer plans such that (i) contributions made by the Company to the multiemployer pension plans may be used to provide benefits to employees of other participating employers; (ii) if the Company chooses to stop participating in the multiemployer pension plans, it may be required to pay those plans an amount based on the underfunded status of the plan; and (iii) if a company stops contributing to the multiemployer pension plan, the unfunded obligations of the plan may become the obligation of the remaining participating employers. The Company also contributes to various other multiemployer benefit plans that provide health and welfare benefits to both active and retired participants. The Company does not participate in any multiemployer benefit plans that are individually significant to the Company.
The following table summarizes the Company's contributions to multiemployer pension and health plans for the years ended December 31, 2025, 2024 and 2023, respectively:

  Year Ended December 31,
  2025 2024 2023
  (in thousands)
Pension benefits $ 92,643   $ 89,707   $ 57,285  
Health benefits 127,671   134,079   85,157  
Total contributions $ 220,314   $ 223,786   $ 142,442  

13.     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 years ended December 31, 2025, 2024 and 2023:
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Year Ended December 31,
  2025 2024 2023
(in thousands)
Revenues $ 45,183,036   $ 39,000,966   $ 33,723,297  
Less:
Content amortization 16,422,166   15,301,517   14,197,437  
Other cost of revenues 6,853,163   5,736,947   5,517,931  
Sales and marketing
3,301,306   2,917,554   2,657,883  
Technology and development 3,391,390   2,925,295   2,675,758  
General and administrative 1,888,408   1,702,039   1,720,285  
Operating income 13,326,603   10,417,614   6,954,003  
Operating margin 29.5   % 26.7   % 20.6   %

Other income (expense)
Interest expense ( 776,510 ) ( 718,733 ) ( 699,826 )
Interest and other income (expense) (1)
172,459   266,776   ( 48,772 )
Income before income taxes 12,722,552   9,965,657   6,205,405  
Provision for income taxes ( 1,741,351 ) ( 1,254,026 ) ( 797,415 )
Net income $ 10,981,201   $ 8,711,631   $ 5,407,990  

(1) Includes interest income of $ 295  million, $ 294  million and $ 281  million for the years ended December 31, 2025, 2024 and 2023, respectively.
See the consolidated financial statements for other financial information regarding the Company’s operating segment.
Total U.S. revenues were $ 18.5 billion, $ 16.1 billion and $ 13.8 billion for the years ended December 31, 2025, 2024 and 2023, respectively. See Note 2 Revenue Recognition for additional information about streaming revenue 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 were located as follows:

As of December 31,
2025 2024
(in thousands)
United States $ 3,075,477   $ 2,769,828  
International 1,136,034   926,238  

14.     Subsequent Event
On January 19, 2026, the Company entered into the Amended and Restated Merger Agreement, which amended and restated in its entirety the agreement and plan of merger entered into with WBD and the other parties thereto on December 4, 2025. See Note 6 Acquisitions and Note 9 Commitments and Contingencies for further information.

Also on January 19, 2026, in connection with the Amended and Restated Merger Agreement, the Company entered into a bridge facility incremental commitments agreement (the “Incremental Commitments Agreement”). The Incremental Commitments Agreement increased the existing commitments under the Company’s bridge commitment letter, dated as of December 4, 2025, from $ 34  billion to $ 42.2  billion of senior unsecured bridge term loan commitments for the purpose of financing the purchase price under the Amended and Restated Merger Agreement, paying certain other fees, costs and expenses incurred in connection with the transaction with WBD and, at the Company’s option, refinancing certain indebtedness.
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EXHIBIT INDEX
 

Exhibit
Number Exhibit Description Incorporated by Reference Filed
Herewith
Form File No. Exhibit Filing Date
2.1+
Amended and Restated Agreement and Plan of Merger, dated as of January 19, 2026, by and among Netflix, Inc., Nightingale Sub, Inc., Warner Bros. Discovery, Inc. and New Topco 25, Inc.
8-K
001-35727
2.1 January 20, 2026
3.1
Amended and Restated Certificate of Incorporation
8-K 001-35727 3.1 June 8, 2022
3.2
Certificate of Amendment of Amended and Restated Certificate of Incorporation
8-K
001-35727
3.1 November 14, 2025
3.3
Amended and Restated Bylaws
8-K 001-35727 3.2 February 24, 2023
4.1
Form of Common Stock Certificate
S-1/A 333-83878 4.1 April 16, 2002
4. 2
Indenture, dated as of October 27, 2016, by and between the Company and Wells Fargo Bank, National Association, as Trustee.
8-K 001-35727 4.1 October 27, 2016
4. 3
Indenture, dated as of May 2, 2017, by and between the Company and Wells Fargo Bank, National Association, as Trustee.
8-K 001-35727 4.1 May 3, 2017
4. 4
Indenture, dated as of October 26, 2017, by and between the Company and Wells Fargo Bank National Association, as Trustee
8-K 001-35727 4.1 October 26, 2017
4. 5
Indenture, dated as of April 26, 2018, by and between the Company and Wells Fargo Bank National Association, as Trustee
8-K 001-35727 4.1 April 26, 2018
4. 6
Indenture, dated as of October 26, 2018, by and between the Company and Wells Fargo Bank National Association, as Trustee (6.375% Senior Notes due 2029)
8-K 001-35727 4.1 October 26, 2018
4. 7
Indenture, dated as of October 26, 2018, by and between the Company and Wells Fargo Bank National Association, as Trustee (4.625% Senior Notes due 2029)
8-K 001-35727 4.3 October 26, 2018
4. 8
Indenture, dated as of April 29, 2019, by and between the Company and Wells Fargo Bank National Association, as Trustee (5.375% Senior Notes due 2029)
8-K 001-35727 4.1 April 29, 2019
4. 9
Indenture, dated as of April 29, 2019, by and between the Company and Wells Fargo Bank National Association, as Trustee (3.875% Senior Notes due 2029)
8-K 001-35727 4.3 April 29, 2019
4.1 0
Indenture, dated as of October 25, 2019, by and between the Company and Wells Fargo Bank National Association, as Trustee (4.875% Senior Notes due 2030)
8-K 001-35727 4.1 October 25, 2019
4.1 1
Indenture, dated as of October 25, 2019, by and between the Company and Wells Fargo Bank National Association, as Trustee (3.625% Senior Notes due 2030)
8-K 001-35727 4.3 October 25, 2019
4.1 2
Indenture, dated as of July 29, 2024, by and between the Company and Computershare Trust Company, National Association, as Trustee.
S-3 333-281071 4.1 July 29, 2024
4.1 3
Supplemental Indenture, dated as of August 1, 2024, by and between the Company and Computershare Trust Company, National Association, as Trustee.
8-K 001-35727 4.2 August 1, 2024
4.1 4
Description of the Registrant's Securities Registered Pursuant to Section 12 of the Securities Exchange Act of 1934
X

10.1†
Form of Indemnification Agreement entered into by the registrant with each of its executive officers and directors
S-1/A 333-83878 10.1 March 20, 2002
10.2†
2011 Stock Plan
X
10.3†
2020 Stock Plan
X
10.4†
Description of Director Equity Compensation Plan
8-K 001-35727 Item 5.02 January 24, 2018
10.5†
Amended and Restated Performance Bonus Plan
8-K 001-35727 10.1 December 9, 2022
10.6†
Form of Stock Option Agreement under the 2011 Stock Plan
10-K 001-35727 10.11 January 27, 2022

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Exhibit
Number Exhibit Description Incorporated by Reference Filed
Herewith
Form File No. Exhibit Filing Date
10.7†
Form of Stock Option Agreement under the 2020 Stock Plan
10-K 001-35727 10.11 January 26, 2023
10.8†
Form of Stock Option Agreement under the 2020 Stock Plan (Options Subject to Vesting)
8-K 001-35727 10.1 December 23, 2022
10.9†
Netflix, Inc. 2020 Stock Plan Form of Restricted Stock Unit Award Agreement
8-K 001-35727 10.1 December 8, 2023
10.10†
Netflix, Inc. 2020 Stock Plan Form of Performance-Based Restricted Stock Unit Award Agreement
8-K 001-35727 10.2 December 8, 2023
10.11†
Netflix, Inc. Executive Officer Severance Plan
8-K 001-35727 10.3 December 8, 2023
10.12 †
Netflix, Inc. Executive Officer Severance Plan, as Amended Effective as of January 1, 2026
8-K 001-35727 10.1 November 4, 2025
10.13 †
Form Consent Letter to Amendment of the Netflix, Inc. Executive Officer Severance Plan
8-K
001-35727
10.2 November 4, 2025
10.14 †
Form of Award Amendment Consent Letter
8-K
001-35727
10.3 November 4, 2025
10.15
Commitment Letter, dated as of December 4, 2025, by and among Netflix, Inc., Wells Fargo Bank, National Association, Wells Fargo Strategic Capital, Inc., Wells Fargo Securities, LLC, BNP Paribas, BNP Paribas Securities Corp., HSBC Bank USA, National Association, HSBC Continental Europe, HSBC Bank plc, HSBC Bank Middle East Limited and HSBC Securities (USA) Inc.
8-K
001-35727
10.1 December 5, 2025
10.16
S enior Unsecured Revolving Credit Agreement, dated as of December 19, 2025, among Netflix, Inc., the lenders party thereto and Wells Fargo Bank, National Association, as the administrative agent.
8-K
 001-35727 10.1 December 22, 2025
10.17
Senior Unsecured Delayed Draw Term Loan Credit Agreement, dated as of December 19, 2025, among Netflix, Inc., the lenders party thereto and Wells Fargo Bank, National Association, as the administrative agent.
8-K
 001-35727 10.2 December 22, 2025
1 0.1 8
Bridge Facility Incremental Commitments Agreement, dated as of January 19, 2026, by and among Netflix, Inc., Wells Fargo Bank, National Association, Wells Fargo Securities, LLC, BNP Paribas, BNP Paribas Securities Corp., HSBC Bank plc and HSBC Securities (USA) Inc.
8-K
001-35727
10.1 January 20, 2026
19.1
Netflix, Inc. Insider Trading Policy
X
21.1
List of Significant Subsidiaries
X
23.1
Consent of Ernst & Young LLP
X
24 Power of Attorney (see signature page)
31.1
Certification of Co-Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
X
31.2
Certification of Co-Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
X
31.3
Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
X
32.1*
Certifications of Co-Chief Executive Officers and Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
X
97.1
Netflix, Inc. Clawback Policy
10-K 001-35727 97.1 January 26, 2024

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Exhibit
Number Exhibit Description Incorporated by Reference Filed
Herewith
Form File No. Exhibit Filing Date
101 The following financial statements from the Company's Annual Report on Form 10-K for the year ended December 31, 2025, formatted in Inline XBRL: (i) Consolidated Statements of Operations, (ii) Consolidated Statements of Comprehensive Income, (iii) Consolidated Statements of Cash Flows, (iv) Consolidated Balance Sheets, (v) Consolidated Statements of Stockholders' Equity and (vi) Notes to Consolidated Financial Statements, tagged as blocks of text and including detailed tags
X
104 The cover page from the Company's Annual Report on Form 10-K for the year ended December 31, 2025, formatted in Inline XBRL
X

* These certifications are not deemed filed by the SEC and are not to be incorporated by reference in any filing we make under the Securities Act of 1933 or the Securities Exchange Act of 1934, irrespective of any general incorporation language in any filings.
† Indicates a management contract or compensatory plan
+ Annexes, schedules and/or exhibits have been omitted pursuant to Item 601(a)(5) of Regulation S-K promulgated by the SEC. Netflix agrees to furnish supplementally a copy of any omitted annexes, schedules or exhibits to the SEC upon request.

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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
 

  Netflix, Inc.

Dated: January 23, 2026   By:    / S /    T ED S ARANDOS

     Ted Sarandos
Co-Chief Executive Officer
(principal executive officer)

Dated: January 23, 2026 By: / S /    G REG P ETERS

Greg Peters
Co-Chief Executive Officer
(principal executive officer)

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POWER OF ATTORNEY
KNOWN ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Ted Sarandos, Greg Peters, and Spencer Neumann, and each of them, as his true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for him and in his name, place, and stead, in any and all capacities, to sign any and all amendments to this Report, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in connection therewith, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming that all said attorneys-in-fact and agents, or any of them or their or his substitute or substituted, may lawfully do or cause to be done by virtue thereof.
Pursuant to the requirements of the Securities and Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
 

Signature Title Date

/ S /    T ED S ARANDOS
Co-Chief Executive Officer and Director (principal executive officer) January 23, 2026
Ted Sarandos

/S/     G REG P ETERS
Co-Chief Executive Officer and Director (principal executive officer) January 23, 2026
Greg Peters

/ S /    S PENCER N EUMANN
Chief Financial Officer (principal financial officer) January 23, 2026
Spencer Neumann

/ S /    J EFFREY K ARBOWSKI
Chief Accounting Officer (principal accounting officer) January 23, 2026
Jeffrey Karbowski

/ S /    R EED H ASTINGS
Chairman and Director January 23, 2026
Reed Hastings

/ S /    R ICHARD B ARTON
Director January 23, 2026
Richard Barton

/ S /    M ATHIAS D ÖPFNER
Director January 23, 2026
Mathias Döpfner

/ S /    J AY C. H OAG
Director January 23, 2026
Jay C. Hoag

/ S /    L ESLIE J. K ILGORE
Director January 23, 2026
Leslie J. Kilgore

/ S /    S TRIVE M ASIYIWA
Director January 23, 2026
Strive Masiyiwa

/ S /    A NN M ATHER
Director January 23, 2026
Ann Mather

/ S /    E LINOR M ERTZ
Director January 23, 2026
Elinor Mertz

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/ S /   S USAN R ICE
Director January 23, 2026
Susan Rice

/ S /   B RAD S MITH
Director January 23, 2026
Brad Smith

/S/   A NNE S WEENEY
Director January 23, 2026
Anne Sweeney

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