Income Tax Expense (Benefit)
Effective Income Tax Rate (EITR)
Components of Deferred Tax Assets and Liabilities
Deferred Tax Assets and Liabilities, Classification
Adjustments to Financial Statements: Removal of Deferred Taxes
Adjusted Financial Ratios: Removal of Deferred Taxes (Summary)
Adjusted Net Profit Margin
Adjusted Total Asset Turnover
Adjusted Financial Leverage
Adjusted Return on Equity (ROE)
Adjusted Return on Assets (ROA)

Netflix Inc., income tax expense (benefit), continuing operations

US$ in thousands

12 months ended:	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Federal	854,170)	109,910)	57,526)	24,221)	21,498)
State	181,684)	119,795)	109,641)	65,821)	45,228)
Foreign	304,539)	676,827)	357,189)	277,846)	223,328)
Current tax provision	1,340,393)	906,532)	524,356)	367,888)	290,054)
Federal	(412,760)	(52,434)	188,937)	(57,765)	(28,003)
State	(55,475)	(30,691)	(2,700)	164,685)	(54,507)
Foreign	(74,743)	(51,402)	13,282)	(36,854)	(12,229)
Deferred tax provision	(542,978)	(134,527)	199,519)	70,066)	(94,739)
Provision for income taxes	797,415)	772,005)	723,875)	437,954)	195,315)

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

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Item	Description	The company
Current tax provision	Amount of current income tax expense (benefit) pertaining to taxable income (loss) from continuing operations.	Netflix Inc. current tax provision increased from 2021 to 2022 and from 2022 to 2023.
Deferred tax provision	Amount of deferred income tax expense (benefit) pertaining to income (loss) from continuing operations.	Netflix Inc. deferred tax provision decreased from 2021 to 2022 and from 2022 to 2023.
Provision for income taxes	Amount of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations.	Netflix Inc. provision for income taxes increased from 2021 to 2022 and from 2022 to 2023.

Netflix Inc., effective income tax rate (EITR) reconciliation

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
	U.S. federal statutory tax rate	21.00%	21.00%	21.00%	21.00%	21.00%
	Effective tax rate	13.00%	15.00%	12.00%	14.00%	9.00%

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

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Item	Description	The company
Effective tax rate	Percentage of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations.	Netflix Inc. effective tax rate increased from 2021 to 2022 but then slightly decreased from 2022 to 2023 not reaching 2021 level.

Netflix Inc., components of deferred tax assets and liabilities

US$ in thousands

	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Stock-based compensation	486,876)	443,456)	351,238)	296,646)	258,376)
Tax credits and net operating loss carryforwards	544,431)	409,411)	494,881)	543,307)	546,533)
Capitalized research expenses	593,439)	323,998)	—)	—)	—)
Accruals and reserves	137,251)	119,732)	165,214)	74,239)	42,450)
Operating lease liabilities	516,574)	551,418)	570,830)	436,838)	349,208)
Unrealized losses	62,213)	—)	13,772)	114,884)	—)
Other	11,615)	2,234)	5,420)	2,543)	6,510)
Gross deferred tax assets	2,352,399)	1,850,249)	1,601,355)	1,468,457)	1,203,077)
Valuation allowance	(442,293)	(343,342)	(318,408)	(249,844)	(134,782)
Deferred tax assets	1,910,106)	1,506,907)	1,282,947)	1,218,613)	1,068,295)
Depreciation & amortization	(357,477)	(456,717)	(388,115)	(229,142)	(80,921)
Operating right-of-use lease assets	(435,216)	(473,928)	(506,403)	(400,380)	(329,168)
Unrealized gains	—)	(47,283)	—)	—)	—)
Acquired intangibles	(233,433)	(267,438)	(240,334)	—)	—)
Other	(9,430)	—)	—)	—)	—)
Deferred tax liabilities	(1,035,556)	(1,245,366)	(1,134,852)	(629,522)	(410,089)
Net deferred tax assets (liabilities)	874,550)	261,541)	148,095)	589,091)	658,206)

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

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Item	Description	The company
Gross deferred tax assets	Amount before allocation of valuation allowances of deferred tax asset attributable to deductible temporary differences and carryforwards.	Netflix Inc. gross deferred tax assets increased from 2021 to 2022 and from 2022 to 2023.
Deferred tax assets	Amount after allocation of valuation allowances of deferred tax asset attributable to deductible temporary differences and carryforwards.	Netflix Inc. deferred tax assets increased from 2021 to 2022 and from 2022 to 2023.
Net deferred tax assets (liabilities)	Amount, after allocation of valuation allowances and deferred tax liability, of deferred tax asset attributable to deductible differences and carryforwards, without jurisdictional netting.	Netflix Inc. net deferred tax assets (liabilities) increased from 2021 to 2022 and from 2022 to 2023.

Netflix Inc., deferred tax assets and liabilities, classification

US$ in thousands

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
	Deferred tax assets (classified as Other non-current assets)	1,000,760)	261,541)	148,095)	589,091)	658,206)
	Deferred tax liabilities (classified as Other non-current liabilities)	126,210)	—)	—)	—)	—)

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

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Item	Description	The company
Deferred tax assets (classified as Other non-current assets)	Amount, after allocation of valuation allowances and deferred tax liability, of deferred tax asset attributable to deductible differences and carryforwards, with jurisdictional netting and classified as noncurrent.	Netflix Inc. deferred tax assets (classified as Other non-current assets) increased from 2021 to 2022 and from 2022 to 2023.
Deferred tax liabilities (classified as Other non-current liabilities)	Amount, after deferred tax asset, of deferred tax liability attributable to taxable differences, with jurisdictional netting and classified as noncurrent.

Netflix Inc., adjustments to financial statements

US$ in thousands

	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Adjustment to Total Assets
Total assets (as reported)	48,731,992)	48,594,768)	44,584,663)	39,280,359)	33,975,712)
Less: Noncurrent deferred tax assets, net	1,000,760)	261,541)	148,095)	589,091)	658,206)
Total assets (adjusted)	47,731,232)	48,333,227)	44,436,568)	38,691,268)	33,317,506)
Adjustment to Total Liabilities
Total liabilities (as reported)	28,143,679)	27,817,367)	28,735,415)	28,215,119)	26,393,555)
Less: Noncurrent deferred tax liabilities, net	126,210)	—)	—)	—)	—)
Total liabilities (adjusted)	28,017,469)	27,817,367)	28,735,415)	28,215,119)	26,393,555)
Adjustment to Stockholders’ Equity
Stockholders’ equity (as reported)	20,588,313)	20,777,401)	15,849,248)	11,065,240)	7,582,157)
Less: Net deferred tax assets (liabilities)	874,550)	261,541)	148,095)	589,091)	658,206)
Stockholders’ equity (adjusted)	19,713,763)	20,515,860)	15,701,153)	10,476,149)	6,923,951)
Adjustment to Net Income
Net income (as reported)	5,407,990)	4,491,924)	5,116,228)	2,761,395)	1,866,916)
Add: Deferred income tax expense (benefit)	(542,978)	(134,527)	199,519)	70,066)	(94,739)
Net income (adjusted)	4,865,012)	4,357,397)	5,315,747)	2,831,461)	1,772,177)

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

Netflix Inc., Financial Data: Reported vs. Adjusted

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Netflix Inc., adjusted financial ratios

	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Net Profit Margin
Reported net profit margin	16.04%	14.21%	17.23%	11.05%	9.26%
Adjusted net profit margin	14.43%	13.78%	17.90%	11.33%	8.79%
Total Asset Turnover
Reported total asset turnover	0.69	0.65	0.67	0.64	0.59
Adjusted total asset turnover	0.71	0.65	0.67	0.65	0.60
Financial Leverage
Reported financial leverage	2.37	2.34	2.81	3.55	4.48
Adjusted financial leverage	2.42	2.36	2.83	3.69	4.81
Return on Equity (ROE)
Reported ROE	26.27%	21.62%	32.28%	24.96%	24.62%
Adjusted ROE	24.68%	21.24%	33.86%	27.03%	25.59%
Return on Assets (ROA)
Reported ROA	11.10%	9.24%	11.48%	7.03%	5.49%
Adjusted ROA	10.19%	9.02%	11.96%	7.32%	5.32%

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

Financial ratio	Description	The company
Adjusted net profit margin	An indicator of profitability, calculated as adjusted net income divided by total revenue.	Netflix Inc. adjusted net profit margin ratio deteriorated from 2021 to 2022 but then slightly improved from 2022 to 2023.
Adjusted total asset turnover	An activity ratio calculated as total revenue divided by adjusted total assets.	Netflix Inc. adjusted total asset turnover ratio deteriorated from 2021 to 2022 but then improved from 2022 to 2023 exceeding 2021 level.
Adjusted financial leverage	A measure of financial leverage calculated as adjusted total assets divided by adjusted total equity. Financial leverage is the extent to which a company can effect, through the use of debt, a proportional change in the return on common equity that is greater than a given proportional change in operating income.	Netflix Inc. adjusted financial leverage ratio decreased from 2021 to 2022 but then slightly increased from 2022 to 2023.
Adjusted ROE	A profitability ratio calculated as adjusted net income divided by adjusted shareholders’ equity.	Netflix Inc. adjusted ROE deteriorated from 2021 to 2022 but then slightly improved from 2022 to 2023.
Adjusted ROA	A profitability ratio calculated as adjusted net income divided by adjusted total assets.	Netflix Inc. adjusted ROA deteriorated from 2021 to 2022 but then slightly improved from 2022 to 2023.

Netflix Inc., Financial Ratios: Reported vs. Adjusted

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	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
As Reported
Selected Financial Data (US$ in thousands)
Net income	5,407,990)	4,491,924)	5,116,228)	2,761,395)	1,866,916)
Revenues	33,723,297)	31,615,550)	29,697,844)	24,996,056)	20,156,447)
Profitability Ratio
Net profit margin¹	16.04%	14.21%	17.23%	11.05%	9.26%
Adjusted for Deferred Taxes
Selected Financial Data (US$ in thousands)
Adjusted net income	4,865,012)	4,357,397)	5,315,747)	2,831,461)	1,772,177)
Revenues	33,723,297)	31,615,550)	29,697,844)	24,996,056)	20,156,447)
Profitability Ratio
Adjusted net profit margin²	14.43%	13.78%	17.90%	11.33%	8.79%

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

2023 Calculations

¹ Net profit margin = 100 × Net income ÷ Revenues
= 100 × 5,407,990 ÷ 33,723,297 = 16.04%

² Adjusted net profit margin = 100 × Adjusted net income ÷ Revenues
= 100 × 4,865,012 ÷ 33,723,297 = 14.43%

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Profitability ratio	Description	The company
Adjusted net profit margin	An indicator of profitability, calculated as adjusted net income divided by total revenue.	Netflix Inc. adjusted net profit margin ratio deteriorated from 2021 to 2022 but then slightly improved from 2022 to 2023.

	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
As Reported
Selected Financial Data (US$ in thousands)
Revenues	33,723,297)	31,615,550)	29,697,844)	24,996,056)	20,156,447)
Total assets	48,731,992)	48,594,768)	44,584,663)	39,280,359)	33,975,712)
Activity Ratio
Total asset turnover¹	0.69	0.65	0.67	0.64	0.59
Adjusted for Deferred Taxes
Selected Financial Data (US$ in thousands)
Revenues	33,723,297)	31,615,550)	29,697,844)	24,996,056)	20,156,447)
Adjusted total assets	47,731,232)	48,333,227)	44,436,568)	38,691,268)	33,317,506)
Activity Ratio
Adjusted total asset turnover²	0.71	0.65	0.67	0.65	0.60

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

2023 Calculations

¹ Total asset turnover = Revenues ÷ Total assets
= 33,723,297 ÷ 48,731,992 = 0.69

² Adjusted total asset turnover = Revenues ÷ Adjusted total assets
= 33,723,297 ÷ 47,731,232 = 0.71

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Activity ratio	Description	The company
Adjusted total asset turnover	An activity ratio calculated as total revenue divided by adjusted total assets.	Netflix Inc. adjusted total asset turnover ratio deteriorated from 2021 to 2022 but then improved from 2022 to 2023 exceeding 2021 level.

	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
As Reported
Selected Financial Data (US$ in thousands)
Total assets	48,731,992)	48,594,768)	44,584,663)	39,280,359)	33,975,712)
Stockholders’ equity	20,588,313)	20,777,401)	15,849,248)	11,065,240)	7,582,157)
Solvency Ratio
Financial leverage¹	2.37	2.34	2.81	3.55	4.48
Adjusted for Deferred Taxes
Selected Financial Data (US$ in thousands)
Adjusted total assets	47,731,232)	48,333,227)	44,436,568)	38,691,268)	33,317,506)
Adjusted stockholders’ equity	19,713,763)	20,515,860)	15,701,153)	10,476,149)	6,923,951)
Solvency Ratio
Adjusted financial leverage²	2.42	2.36	2.83	3.69	4.81

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

2023 Calculations

¹ Financial leverage = Total assets ÷ Stockholders’ equity
= 48,731,992 ÷ 20,588,313 = 2.37

² Adjusted financial leverage = Adjusted total assets ÷ Adjusted stockholders’ equity
= 47,731,232 ÷ 19,713,763 = 2.42

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Solvency ratio	Description	The company
Adjusted financial leverage	A measure of financial leverage calculated as adjusted total assets divided by adjusted total equity. Financial leverage is the extent to which a company can effect, through the use of debt, a proportional change in the return on common equity that is greater than a given proportional change in operating income.	Netflix Inc. adjusted financial leverage ratio decreased from 2021 to 2022 but then slightly increased from 2022 to 2023.

	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
As Reported
Selected Financial Data (US$ in thousands)
Net income	5,407,990)	4,491,924)	5,116,228)	2,761,395)	1,866,916)
Stockholders’ equity	20,588,313)	20,777,401)	15,849,248)	11,065,240)	7,582,157)
Profitability Ratio
ROE¹	26.27%	21.62%	32.28%	24.96%	24.62%
Adjusted for Deferred Taxes
Selected Financial Data (US$ in thousands)
Adjusted net income	4,865,012)	4,357,397)	5,315,747)	2,831,461)	1,772,177)
Adjusted stockholders’ equity	19,713,763)	20,515,860)	15,701,153)	10,476,149)	6,923,951)
Profitability Ratio
Adjusted ROE²	24.68%	21.24%	33.86%	27.03%	25.59%

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

2023 Calculations

¹ ROE = 100 × Net income ÷ Stockholders’ equity
= 100 × 5,407,990 ÷ 20,588,313 = 26.27%

² Adjusted ROE = 100 × Adjusted net income ÷ Adjusted stockholders’ equity
= 100 × 4,865,012 ÷ 19,713,763 = 24.68%

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Profitability ratio	Description	The company
Adjusted ROE	A profitability ratio calculated as adjusted net income divided by adjusted shareholders’ equity.	Netflix Inc. adjusted ROE deteriorated from 2021 to 2022 but then slightly improved from 2022 to 2023.

	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
As Reported
Selected Financial Data (US$ in thousands)
Net income	5,407,990)	4,491,924)	5,116,228)	2,761,395)	1,866,916)
Total assets	48,731,992)	48,594,768)	44,584,663)	39,280,359)	33,975,712)
Profitability Ratio
ROA¹	11.10%	9.24%	11.48%	7.03%	5.49%
Adjusted for Deferred Taxes
Selected Financial Data (US$ in thousands)
Adjusted net income	4,865,012)	4,357,397)	5,315,747)	2,831,461)	1,772,177)
Adjusted total assets	47,731,232)	48,333,227)	44,436,568)	38,691,268)	33,317,506)
Profitability Ratio
Adjusted ROA²	10.19%	9.02%	11.96%	7.32%	5.32%

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

2023 Calculations

¹ ROA = 100 × Net income ÷ Total assets
= 100 × 5,407,990 ÷ 48,731,992 = 11.10%

² Adjusted ROA = 100 × Adjusted net income ÷ Adjusted total assets
= 100 × 4,865,012 ÷ 47,731,232 = 10.19%

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Profitability ratio	Description	The company
Adjusted ROA	A profitability ratio calculated as adjusted net income divided by adjusted total assets.	Netflix Inc. adjusted ROA deteriorated from 2021 to 2022 but then slightly improved from 2022 to 2023.

Netflix Inc. (NASDAQ:NFLX)

Analysis of Income Taxes

Income Tax Expense (Benefit)

Effective Income Tax Rate (EITR)

Components of Deferred Tax Assets and Liabilities

Deferred Tax Assets and Liabilities, Classification

Adjustments to Financial Statements: Removal of Deferred Taxes

Netflix Inc., Financial Data: Reported vs. Adjusted

Adjusted Financial Ratios: Removal of Deferred Taxes (Summary)

Netflix Inc., Financial Ratios: Reported vs. Adjusted

Adjusted Net Profit Margin

Adjusted Total Asset Turnover

Adjusted Financial Leverage

Adjusted Return on Equity (ROE)

Adjusted Return on Assets (ROA)