Stock Analysis on Net
Stock Analysis on Net
Microsoft Excel LibreOffice Calc

Netflix Inc. (NASDAQ:NFLX)

Analysis of Investments

Advanced level

Adjustment to Net Income (Loss): Mark to Market Available-for-sale Securities

Netflix Inc., adjustment to net income

US$ in thousands

Microsoft Excel LibreOffice Calc
12 months ended: Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
Net income (as reported) 1,866,916  1,211,242  558,929  186,678  122,641 
Add: Change in unrealized gains (losses) on available-for-sale securities, net of tax —  —  599  207  (975)
Net income (adjusted) 1,866,916  1,211,242  559,528  186,885  121,666 

Based on: 10-K (filing date: 2020-01-29), 10-K (filing date: 2019-01-29), 10-K (filing date: 2018-01-29), 10-K (filing date: 2017-01-27), 10-K (filing date: 2016-01-28).

Adjusted Profitability Ratios: Mark to Market Available-for-sale Securities (Summary)

Netflix Inc., adjusted profitability ratios

Microsoft Excel LibreOffice Calc
Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
Net Profit Margin
Reported net profit margin 9.26% 7.67% 4.78% 2.11% 1.81%
Adjusted net profit margin 9.26% 7.67% 4.79% 2.12% 1.79%
Return on Equity (ROE)
Reported ROE 24.62% 23.12% 15.60% 6.97% 5.52%
Adjusted ROE 24.62% 23.12% 15.62% 6.97% 5.47%
Return on Assets (ROA)
Reported ROA 5.49% 4.66% 2.94% 1.37% 1.20%
Adjusted ROA 5.49% 4.66% 2.94% 1.38% 1.19%

Based on: 10-K (filing date: 2020-01-29), 10-K (filing date: 2019-01-29), 10-K (filing date: 2018-01-29), 10-K (filing date: 2017-01-27), 10-K (filing date: 2016-01-28).

Profitability ratio Description The company
Adjusted net profit margin An indicator of profitability, calculated as adjusted net income divided by revenue. Netflix Inc.’s adjusted net profit margin ratio improved from 2017 to 2018 and from 2018 to 2019.
Adjusted ROE A profitability ratio calculated as adjusted net income divided by shareholders’ equity. Netflix Inc.’s adjusted ROE improved from 2017 to 2018 and from 2018 to 2019.
Adjusted ROA A profitability ratio calculated as adjusted net income divided by total assets. Netflix Inc.’s adjusted ROA improved from 2017 to 2018 and from 2018 to 2019.

Netflix Inc., Profitability Ratios: Reported vs. Adjusted

Adjusted Net Profit Margin

Microsoft Excel LibreOffice Calc
Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
As Reported
Selected Financial Data (US$ in thousands)
Net income 1,866,916  1,211,242  558,929  186,678  122,641 
Revenues 20,156,447  15,794,341  11,692,713  8,830,669  6,779,511 
Profitability Ratio
Net profit margin1 9.26% 7.67% 4.78% 2.11% 1.81%
Adjusted: Mark to Market Available-for-sale Securities
Selected Financial Data (US$ in thousands)
Adjusted net income 1,866,916  1,211,242  559,528  186,885  121,666 
Revenues 20,156,447  15,794,341  11,692,713  8,830,669  6,779,511 
Profitability Ratio
Adjusted net profit margin2 9.26% 7.67% 4.79% 2.12% 1.79%

Based on: 10-K (filing date: 2020-01-29), 10-K (filing date: 2019-01-29), 10-K (filing date: 2018-01-29), 10-K (filing date: 2017-01-27), 10-K (filing date: 2016-01-28).

2019 Calculations

1 Net profit margin = 100 × Net income ÷ Revenues
= 100 × 1,866,916 ÷ 20,156,447 = 9.26%

2 Adjusted net profit margin = 100 × Adjusted net income ÷ Revenues
= 100 × 1,866,916 ÷ 20,156,447 = 9.26%

Profitability ratio Description The company
Adjusted net profit margin An indicator of profitability, calculated as adjusted net income divided by revenue. Netflix Inc.’s adjusted net profit margin ratio improved from 2017 to 2018 and from 2018 to 2019.

Adjusted Return on Equity (ROE)

Microsoft Excel LibreOffice Calc
Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
As Reported
Selected Financial Data (US$ in thousands)
Net income 1,866,916  1,211,242  558,929  186,678  122,641 
Stockholders’ equity 7,582,157  5,238,765  3,581,956  2,679,800  2,223,426 
Profitability Ratio
ROE1 24.62% 23.12% 15.60% 6.97% 5.52%
Adjusted: Mark to Market Available-for-sale Securities
Selected Financial Data (US$ in thousands)
Adjusted net income 1,866,916  1,211,242  559,528  186,885  121,666 
Stockholders’ equity 7,582,157  5,238,765  3,581,956  2,679,800  2,223,426 
Profitability Ratio
Adjusted ROE2 24.62% 23.12% 15.62% 6.97% 5.47%

Based on: 10-K (filing date: 2020-01-29), 10-K (filing date: 2019-01-29), 10-K (filing date: 2018-01-29), 10-K (filing date: 2017-01-27), 10-K (filing date: 2016-01-28).

2019 Calculations

1 ROE = 100 × Net income ÷ Stockholders’ equity
= 100 × 1,866,916 ÷ 7,582,157 = 24.62%

2 Adjusted ROE = 100 × Adjusted net income ÷ Stockholders’ equity
= 100 × 1,866,916 ÷ 7,582,157 = 24.62%

Profitability ratio Description The company
Adjusted ROE A profitability ratio calculated as adjusted net income divided by shareholders’ equity. Netflix Inc.’s adjusted ROE improved from 2017 to 2018 and from 2018 to 2019.

Adjusted Return on Assets (ROA)

Microsoft Excel LibreOffice Calc
Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
As Reported
Selected Financial Data (US$ in thousands)
Net income 1,866,916  1,211,242  558,929  186,678  122,641 
Total assets 33,975,712  25,974,400  19,012,742  13,586,610  10,202,871 
Profitability Ratio
ROA1 5.49% 4.66% 2.94% 1.37% 1.20%
Adjusted: Mark to Market Available-for-sale Securities
Selected Financial Data (US$ in thousands)
Adjusted net income 1,866,916  1,211,242  559,528  186,885  121,666 
Total assets 33,975,712  25,974,400  19,012,742  13,586,610  10,202,871 
Profitability Ratio
Adjusted ROA2 5.49% 4.66% 2.94% 1.38% 1.19%

Based on: 10-K (filing date: 2020-01-29), 10-K (filing date: 2019-01-29), 10-K (filing date: 2018-01-29), 10-K (filing date: 2017-01-27), 10-K (filing date: 2016-01-28).

2019 Calculations

1 ROA = 100 × Net income ÷ Total assets
= 100 × 1,866,916 ÷ 33,975,712 = 5.49%

2 Adjusted ROA = 100 × Adjusted net income ÷ Total assets
= 100 × 1,866,916 ÷ 33,975,712 = 5.49%

Profitability ratio Description The company
Adjusted ROA A profitability ratio calculated as adjusted net income divided by total assets. Netflix Inc.’s adjusted ROA improved from 2017 to 2018 and from 2018 to 2019.