Netflix Inc. (NASDAQ:NFLX)

Revenues exhibited a generally increasing trend over the observed period, starting at US$5.77 billion in March 2020 and reaching US$11.51 billion by June 2025. While growth was consistent through much of 2021 and 2022, the rate of revenue increase slowed in late 2022 and early 2023 before accelerating again in 2023 and 2024. A slight deceleration is observed in the most recent quarter, June 2025.

Cost of revenues also increased over the period, though not consistently. Significant increases were noted in late 2020 and 2022, correlating with periods of revenue growth. However, the cost of revenues as a percentage of revenue appears to have risen in the latter half of the observed period, potentially impacting profitability.

Gross profit mirrored the revenue trend, increasing from US$2.17 billion in March 2020 to US$5.75 billion in June 2025. However, the rate of gross profit growth slowed in several quarters, particularly in late 2020, 2022, and early 2023, coinciding with increases in the cost of revenues. Despite this, gross profit remains substantially higher in the later periods.

Sales and Marketing Expenses

Sales and marketing expenses fluctuated throughout the period. A notable increase occurred in late 2020, followed by a decrease and then another increase in late 2022. These expenses appear to be strategically adjusted, potentially in response to competitive pressures or subscriber acquisition goals. The most recent increase in 2024 is substantial.

Technology and Development Expenses

Technology and development expenses demonstrated a consistent upward trend, increasing from US$453.82 million in March 2020 to US$853.58 million in September 2025. This suggests a continued investment in platform innovation and content delivery infrastructure. The consistent increase indicates a strategic priority for technological advancement.

General and Administrative Expenses

General and administrative expenses also increased over the period, though at a slower rate than technology and development expenses. A significant increase is observed in 2023 and 2024, potentially reflecting organizational growth or increased regulatory compliance costs.

Operating income experienced significant fluctuations. A peak was reached in June 2021, followed by a substantial decline in late 2021 and early 2022. Operating income recovered in 2022 and 2023, reaching a new high in September 2024, before a slight decrease in the most recent quarter. These fluctuations likely reflect the combined impact of revenue growth, cost of revenues, and operating expenses.

Net Income

Net income followed a similar pattern to operating income, with a peak in June 2021 and a subsequent decline. Net income recovered strongly in 2023 and 2024, reaching US$3.13 billion in December 2024. The impact of interest expense and other income/expense items are visible in the fluctuations of net income.

Interest Expense and Other Income

Interest expense remained relatively stable throughout the period, with minor fluctuations. However, other income/expense exhibited significant volatility, with large negative values in 2020 and 2021, and positive values in other periods. These fluctuations likely relate to investment gains or losses, or other non-operating items. The net effect of these items impacted the overall net income.

Provision for income taxes varied considerably, largely dependent on net income levels. Higher net income generally resulted in a higher tax provision. The effective tax rate appears to fluctuate, potentially due to changes in tax laws or geographic income mix.