Netflix Inc. (NASDAQ:NFLX)

The income statement reveals a generally positive trend in financial performance over the five-year period. Revenues demonstrate consistent growth, increasing from US$29.698 billion in 2021 to US$45.183 billion in 2025. While the cost of revenues also increased, the rate of increase was less than that of revenues, resulting in expanding gross profit margins. Operating income experienced fluctuations but ultimately showed substantial growth, particularly in the later years of the period. Net income followed a similar pattern, with a significant increase observed from 2021 to 2025.

Revenue Growth

Revenue growth was steady throughout the period, with an acceleration in growth rates from 2023 onwards. The increase from 2024 to 2025 was particularly notable, representing a substantial gain in top-line performance. This suggests successful strategies in subscriber acquisition or pricing adjustments.

Profitability Analysis

Gross profit increased from US$12.365 billion in 2021 to US$21.908 billion in 2025. The gross margin, while not explicitly calculated here, appears to have improved over time as the growth in gross profit outpaced revenue growth. Operating income experienced a dip in 2022 but recovered strongly, more than doubling from 2022 to 2025. Net income mirrored this trend, increasing from US$5.116 billion to US$10.981 billion.

Expense Management

Cost of revenues increased consistently, reflecting the costs associated with content acquisition and delivery. Sales and marketing expenses remained relatively stable in the early years but increased in 2024 and 2025, potentially indicating increased investment in subscriber growth. Technology and development expenses also rose steadily, suggesting ongoing investment in platform innovation. General and administrative expenses increased, but at a slower rate than revenues, indicating some level of operational efficiency. Interest expense remained relatively consistent, with a slight increase in 2025.

Non-Operating Items

Interest and other income exhibited volatility, with a significant negative impact in 2023. Other income (expense) consistently represented a negative value, increasing in magnitude over the period. These non-operating items had a moderate impact on income before income taxes, but their fluctuations warrant further investigation.

Tax Impact

The provision for income taxes increased alongside net income, indicating a higher tax burden as profitability improved. The effective tax rate, while not explicitly calculated, appears to have remained relatively stable throughout the period.

Overall, the income statement demonstrates a positive trajectory, characterized by revenue growth, improved profitability, and effective expense management. The increases in sales and marketing and technology and development expenses suggest a strategic focus on future growth and innovation. The fluctuations in non-operating items require further scrutiny, but do not appear to significantly detract from the overall positive financial performance.