Stock Analysis on Net
Stock Analysis on Net

Netflix Inc. (NASDAQ:NFLX)

Common-Size Income Statement 
Quarterly Data

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

Microsoft Excel
3 months ended: 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
Cost of revenues -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% 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 -6.88 -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 -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 -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 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 -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) 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) 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 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 -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 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: 2026-03-31), 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).

The common-size income statement reveals significant fluctuations in profitability and cost structure over the observed period. Revenue consistency at 100% allows for a focused analysis of expense and income percentages. A notable trend is the increasing volatility in cost of revenues and operating income, particularly from 2021 through 2023, followed by stabilization and then further shifts in 2024 and 2025.

Gross Profit
Gross profit as a percentage of revenue demonstrated a decline from 46.00% in March 2021 to a low of 31.18% in December 2021. It partially recovered to 42.92% by June 2023, before experiencing another dip to 39.91% in September 2023. A substantial increase is then observed, reaching 51.93% in June 2025, suggesting improved cost management or pricing strategies in the later period. This indicates a cyclical pattern with periods of compression and expansion.
Operating Expenses
Sales and marketing expenses remained relatively stable, fluctuating between approximately 6.5% and 10.6% of revenues. Technology and development expenses also exhibited consistency, generally ranging between 7.3% and 8.6% of revenues. General and administrative expenses showed a slight downward trend, decreasing from 5.16% to 4.71% between December 2021 and September 2022, then stabilizing around 4-5%. The combined effect of these expenses contributed to the volatility observed in operating income.
Operating Income
Operating income experienced the most dramatic swings. It fell from 27.36% in March 2021 to a low of 7.00% in December 2021. A recovery occurred through June 2023, reaching 22.32%, but then declined again to 16.94% in September 2023. A significant surge is evident in the later periods, peaking at 34.07% in June 2025, likely driven by the improvements in gross profit and relatively stable operating expenses. This suggests a sensitivity to cost of revenue fluctuations.
Net Income
Net income mirrored the trends in operating income, though moderated by changes in interest expense, other income/expense, and the provision for income taxes. Net income as a percentage of revenue decreased from 23.83% in March 2021 to 7.88% in December 2021, then recovered to 19.64% by September 2023. The most substantial increase occurred in the final periods, reaching 43.13% in December 2025, indicating a significant improvement in overall profitability. The large increase in December 2025 is partially attributable to a substantial "Other income (expense)" value.
Interest and Taxes
Interest expense remained relatively consistent, fluctuating around 2% of revenues. The provision for income taxes generally tracked net income, with fluctuations corresponding to changes in profitability. However, "Interest and other income (expense)" and "Other income (expense)" exhibited significant volatility, particularly in later periods, impacting net income. The large positive value for "Other income (expense)" in December 2025 significantly boosted net income.

In summary, the period demonstrates a cyclical pattern of profitability, with a significant downturn in 2021, partial recovery through 2023, and a substantial improvement in 2024 and 2025. The primary driver of these fluctuations appears to be the cost of revenues, with operating expenses exhibiting more stability. The significant impact of "Other income (expense)" in the final period warrants further investigation.

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