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Netflix Inc. (NASDAQ:NFLX)

Common-Size Income Statement
Quarterly Data

Netflix Inc., common-size consolidated income statement (quarterly data)

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3 months ended: Jun 30, 2026 Mar 31, 2026 Dec 31, 2025 Sep 30, 2025 Jun 30, 2025 Mar 31, 2025 Dec 31, 2024 Sep 30, 2024 Jun 30, 2024 Mar 31, 2024 Dec 31, 2023 Sep 30, 2023 Jun 30, 2023 Mar 31, 2023 Dec 31, 2022 Sep 30, 2022 Jun 30, 2022 Mar 31, 2022 Dec 31, 2021 Sep 30, 2021 Jun 30, 2021 Mar 31, 2021
Revenues 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00
Cost of revenues -48.07 -48.07 -54.13 -53.55 -48.07 -49.92 -56.29 -52.11 -54.13 -53.11 -60.09 -57.73 -57.08 -58.86 -68.82 -60.42 -58.85 -54.46 -67.96 -56.21 -54.73 -54.00
Gross profit 51.93% 51.93% 45.87% 46.45% 51.93% 50.08% 43.71% 47.89% 45.87% 46.89% 39.91% 42.27% 42.92% 41.14% 31.18% 39.58% 41.15% 45.54% 32.04% 43.79% 45.27% 46.00%
Sales and marketing -6.56 -6.88 -9.24 -6.83 -6.44 -6.53 -9.53 -6.54 -6.74 -6.98 -10.38 -6.54 -7.66 -6.80 -10.59 -7.17 -7.21 -7.07 -10.28 -8.50 -8.23 -7.15
Technology and development -8.02 -7.83 -7.39 -7.42 -7.44 -7.80 -7.58 -7.48 -7.44 -7.50 -7.62 -7.69 -8.04 -8.42 -8.58 -8.36 -8.99 -8.36 -8.40 -7.54 -7.32 -7.33
General and administrative -3.97 -4.92 -4.71 -3.98 -3.98 -4.00 -4.43 -4.25 -4.47 -4.31 -4.97 -5.60 -4.90 -4.91 -5.00 -4.71 -5.14 -5.06 -5.16 -4.30 -4.56 -4.15
Operating income 33.38% 32.30% 24.54% 28.22% 34.07% 31.75% 22.18% 29.61% 27.23% 28.09% 16.94% 22.44% 22.32% 21.00% 7.00% 19.34% 19.80% 25.06% 8.19% 23.46% 25.17% 27.36%
Interest expense -1.40 -2.14 -1.95 -1.52 -1.65 -1.75 -1.88 -1.88 -1.76 -1.85 -1.98 -2.06 -2.14 -2.13 -2.17 -2.18 -2.20 -2.38 -2.46 -2.54 -2.61 -2.71
Interest and other income (expense) 0.41 23.28 0.38 0.32 0.36 0.48 0.53 -0.22 0.83 1.66 -1.96 1.97 0.33 -0.87 -4.33 3.30 2.76 2.49 1.41 1.28 -0.85 3.76
Other income (expense) -0.99% 21.14% -1.57% -1.21% -1.29% -1.26% -1.35% -2.10% -0.93% -0.19% -3.94% -0.09% -1.81% -3.01% -6.50% 1.12% 0.56% 0.10% -1.05% -1.26% -3.46% 1.04%
Income before income taxes 32.39% 53.45% 22.97% 27.01% 32.78% 30.48% 20.83% 27.51% 26.30% 27.90% 13.00% 22.35% 20.51% 18.00% 0.50% 20.46% 20.36% 25.16% 7.15% 22.20% 21.71% 28.40%
Provision for income taxes -5.31 -10.32 -2.90 -4.89 -4.57 -3.07 -2.59 -3.46 -3.83 -3.01 -2.38 -2.71 -2.34 -2.01 0.20 -2.82 -2.28 -4.86 0.73 -2.83 -3.28 -4.58
Net income 27.08% 43.13% 20.07% 22.13% 28.21% 27.42% 18.24% 24.06% 22.46% 24.89% 10.62% 19.64% 18.17% 15.99% 0.70% 17.64% 18.08% 20.30% 7.88% 19.36% 18.43% 23.83%

Based on: 10-Q (reporting date: 2026-06-30), 10-Q (reporting date: 2026-03-31), 10-K (reporting date: 2025-12-31), 10-Q (reporting date: 2025-09-30), 10-Q (reporting date: 2025-06-30), 10-Q (reporting date: 2025-03-31), 10-K (reporting date: 2024-12-31), 10-Q (reporting date: 2024-09-30), 10-Q (reporting date: 2024-06-30), 10-Q (reporting date: 2024-03-31), 10-K (reporting date: 2023-12-31), 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31).

Profitability margins exhibit a cyclical pattern characterized by a general upward trajectory in operational efficiency. A recurring contraction in margins is observed every fourth quarter, primarily driven by a significant increase in the cost of revenues. However, the overall trend indicates a transition toward higher baseline margins and improved cost control over the observed period.

Gross Margin Analysis
The cost of revenues demonstrates notable seasonality, consistently peaking in December of each year, with the highest contraction occurring in December 2022 at 68.82%. Despite these year-end spikes, there is a clear long-term downward trend in the cost of revenues as a percentage of sales, reaching a low of 48.07% by early 2026. Consequently, gross profit margins have expanded from a volatile range of 31% to 46% in previous years to a more stable and higher range exceeding 50% in the final projected quarters.
Operating Expense Trends
Operational expenditures remain relatively disciplined. Sales and marketing expenses typically fluctuate between 6% and 10% of revenues, with higher spends aligned with the December cyclicality. Technology and development costs show the highest stability, consistently hovering between 7.3% and 8.9%. General and administrative expenses have seen a gradual reduction, declining from roughly 5% in 2021 to approximately 4% by 2026, contributing to overall margin expansion.
Operating and Net Income Performance
Operating income margins have shifted from an average of approximately 20% to 25% in the 2021-2022 period to peaks of 34.07% by mid-2025. Net income margins generally track operating performance, though a substantial anomaly is observed in March 2026. During this quarter, net income surged to 43.13%, driven by an extraordinary increase in interest and other income, which combined to add over 44% to the pre-tax margin for that specific period.
Financial Obligations and Tax Provisions
Interest expenses as a percentage of revenue have steadily decreased from 2.71% in March 2021 to 1.40% by June 2026, suggesting a reduction in the relative burden of debt service. The provision for income taxes typically ranges between 2% and 5% of revenues, with a sharp increase to 10.32% in March 2026, which correlates with the significant spike in non-operating income recorded in that quarter.

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