Stock Analysis on Net
Stock Analysis on Net

Netflix Inc. (NASDAQ:NFLX)

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Common-Size Income Statement

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Netflix Inc., common-size consolidated income statement

Microsoft Excel
12 months ended: Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020
Revenues
Cost of revenues
Gross profit
Sales and marketing
Technology and development
General and administrative
Operating income
Interest expense
Interest and other income (expense)
Other income (expense)
Income before income taxes
Provision for income taxes
Net income

Based on: 10-K (reporting date: 2024-12-31), 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).

Revenue Stability
Revenues remain constant, always representing 100% as a baseline to analyze other financial items relative to total revenues.
Cost of Revenues
The cost of revenues exhibits a declining trend from 61.11% in 2020 to 53.94% in 2024, indicating improved cost efficiency or better pricing strategies. This reduction positively impacts gross profit margins.
Gross Profit
Gross profit increases from 38.89% in 2020 to 46.06% in 2024, reflecting enhanced profitability at the gross margin level. This improvement correlates with decreasing cost of revenues.
Sales and Marketing Expenses
Sales and marketing expenses gradually decrease from 8.91% in 2020 to 7.48% in 2024. This downward trend suggests more efficient marketing spend or scaling benefits, potentially contributing to better operating leverage.
Technology and Development Expenses
Technology and development costs show a slight fluctuation but generally decline from 8.58% in 2022 to 7.50% in 2024 after peaking, indicating efforts to optimize R&D expenses while maintaining innovation.
General and Administrative Expenses
General and administrative expenses remain relatively stable, fluctuating mildly between 4.31% and 5.10%, with a decrease to 4.36% in 2024, suggesting controlled overhead costs.
Operating Income
Operating income shows a positive upward trajectory from 18.34% in 2020 to 26.71% in 2024, reflecting successful management in controlling costs and increasing profitability at the core operating level.
Interest Expense
Interest expense consistently declines from 3.07% in 2020 to 1.84% in 2024, indicating either reduced debt levels or more favorable financing terms, contributing to improved net profitability.
Interest and Other Income (Expense)
This line demonstrates volatility, with negative values in some years and positive in others, ending at 0.68% in 2024. The variability suggests fluctuating investment income or other non-operating financial results.
Other Income (Expense)
Other income (expense) remains a negative contributor each year, though improving from -5.54% in 2020 to -1.16% in 2024, which may indicate diminishing losses or reduced one-time expenses.
Income Before Taxes
Income before taxes generally follows an increasing trend, moving from 12.80% in 2020 to 25.55% in 2024, aligning with growth in operating income and reductions in interest expense and other losses.
Provision for Income Taxes
The tax provision as a percentage of revenue fluctuates but increases to 3.22% in 2024 from around 2.4% in preceding years, reflecting possibly higher tax rates or tax expense alignments with rising pre-tax income.
Net Income
Net income rises from 11.05% in 2020 to 22.34% in 2024, showing significant bottom-line profitability improvements. This increase is supported by higher gross and operating margins, reduced interest expense, and controlled costs.