Netflix Inc. (NASDAQ:NFLX)

The quarterly financial ratios indicate several notable trends regarding the company's asset utilization and equity efficiency over the observed period.

Net Fixed Asset Turnover

The net fixed asset turnover ratio displays a general decline from 25.99 as of March 31, 2021, to a low of 21.83 by June 30, 2023. This suggests a reduction in the efficiency with which the company is using its fixed assets to generate revenue. However, following that trough, the ratio improves to 23.27 by March 31, 2024, and remains relatively stable around 24 through December 31, 2024, continuing to maintain values near 24 until March 31, 2025. This recovery may indicate a recent improvement in asset utilization or stabilization in capital investment and revenues related to fixed assets.

Total Asset Turnover

The total asset turnover ratio remains relatively stable in the initial periods, fluctuating narrowly around 0.66 to 0.67 from March 2021 through mid-2022. Then the ratio shows a slight dip to a low of 0.63 by June 2023, implying a temporary decrease in overall asset efficiency. Subsequently, a steady improvement occurs with the ratio rising to 0.79 by September 30, 2025. This upward trend denotes an enhanced capacity to utilize all assets—both fixed and current—to generate sales, possibly reflecting improved operational efficiency or asset management.

Equity Turnover

The equity turnover ratio exhibits a downward trend from 2.05 at the beginning of the period to a low point near 1.41 by June 30, 2023. This reflects a decreasing rate of revenue generation per unit of shareholder equity, which may be due to growth in equity base or declining revenue relative to equity. From mid-2023 onward, the ratio partially recovers, fluctuating between 1.58 and 1.67 towards the end of the period, suggesting some improvement in leveraging equity to generate revenue but still below the initial levels observed in early 2021.

In summary, the company's asset turnover ratios indicate a period of declining efficiency until mid-2023, followed by a recovering trend in both fixed asset and total asset utilization. The equity turnover follows a similar pattern but remains subdued compared to earlier performance. These patterns point to managerial efforts or market conditions that led to an initial reduction in asset and equity productivity, with subsequent steps to enhance utilization and operating efficiency across the latest quarters.

Revenue Trends

Revenues demonstrated a consistent upward trend over the entire period analyzed. Starting at approximately 7.16 billion US dollars in the first quarter of 2021, revenues steadily increased each quarter, reaching around 11.51 billion US dollars by the first quarter of 2025. Notably, this progression reflects sustained growth with intermittent acceleration, particularly from early 2023 through 2025, indicating expanding market demand or successful business strategies.

Property and Equipment, Net

The net value of property and equipment showed continuous growth throughout the period under review. Beginning at approximately 1.02 billion US dollars in the first quarter of 2021, this asset base increased to nearly 1.84 billion US dollars by the first quarter of 2025. This upward trajectory suggests ongoing investment in fixed assets, which could be linked to expansion efforts or modernization initiatives. Growth was steady with slight accelerations in certain years, particularly evident in the later stages of the timeline.

Net Fixed Asset Turnover Ratio

The net fixed asset turnover ratio exhibited oscillating behavior across the quarters, fluctuating between approximately 21.83 and 25.99. Initially, there was a gradual decline from a high of 25.99 in the first quarter of 2021 down to levels around 21.97 by the first quarter of 2022, which might indicate that revenue growth was not proportionate to fixed asset investments during that time. However, from mid-2022 onward, the ratio recovered somewhat, stabilizing mostly in the low to mid-20s, with minor variations quarter to quarter. This stabilization implies a relatively consistent relationship between fixed asset utilization and revenue generation in the latter phases of the period.

Summary Insights

Overall, the company demonstrated solid revenue growth complemented by increased investment in property and equipment. The gradual expansion of fixed assets alongside rising revenues may reflect strategic initiatives aimed at supporting business growth. Meanwhile, the net fixed asset turnover ratio suggests an initial period of reduced efficiency in asset usage, followed by improved and stable performance. Continued monitoring of this ratio could provide further insights into the effectiveness of asset deployment relative to revenue scalability.

The analysis of the quarterly financial data reveals a number of noteworthy trends related to revenues, total assets, and total asset turnover over the observed periods.

Revenues

Revenues have shown a consistent upward trend throughout the periods examined. Starting at approximately $7.16 billion in the first quarter of 2021, revenues experienced steady growth with minor fluctuations. By the first quarter of 2025, revenues reached over $11.5 billion, indicating a significant increase in sales or service income over the four-year span. This steady rise suggests successful business expansion or increased demand.

Total Assets

Total assets also increased from around $40.1 billion in the first quarter of 2021 to approximately $54.9 billion by the first quarter of 2025. The growth in assets, though positive, exhibited some variability, particularly notable in fluctuations around late 2022 and early 2023, where total assets temporarily decreased before rising again. This pattern could be indicative of asset revaluation, disposals, or investment activities affecting the asset base.

Total Asset Turnover

The total asset turnover ratio, which measures efficiency in using assets to generate revenues, displayed a mild declining trend in the early periods—from about 0.66 in early 2021 to a low of 0.63 in mid-2023—suggesting slightly less efficient asset usage initially. However, after this trough, the ratio improved steadily, reaching approximately 0.79 by the first quarter of 2025. This recovery and subsequent improvement indicate enhanced operational efficiency or better utilization of assets in generating revenue in the latter periods.

Overall, the data suggest sustained revenue growth accompanied by increasing total assets, though with some variability. The initial dip followed by improvement in total asset turnover highlights a period of adjustment or investment before achieving greater efficiency in asset utilization.

Revenue Trends

Revenues demonstrated a general upward trajectory throughout the observed periods. Beginning at approximately 7.16 billion USD in the first quarter of 2021, revenue steadily increased with minor fluctuations, reaching over 11.5 billion USD by the third quarter of 2025. Notably, there was consistent growth in nearly every quarter except for slight declines observed in the trailing quarters of 2022. The growth pace appears to accelerate from 2023 onwards, with revenues surpassing the 10 billion USD mark during 2024 and continuing to grow thereafter.

Stockholders’ Equity

Stockholders' equity increased considerably over the period, rising from roughly 12.9 billion USD at the start of 2021 to approximately 26 billion USD by late 2025. The increase was steady, but there were periods of moderate decline, especially from late 2022 through early 2023, where equity levels dropped before recovering once more. Equity growth outpaced revenue growth in relative terms, indicating substantial reinvested earnings or capital infusions during the period.

Equity Turnover Ratio

The equity turnover ratio exhibited a downward trend from early 2021 through most of 2022, declining from about 2.05 times to a low near 1.41 times in mid-2023. This decreasing ratio suggests that revenues were growing at a slower pace relative to equity in this phase, indicating either increasing capital bases or more conservative revenue generation relative to equity. However, from late 2023 onwards, the equity turnover ratio gradually recovered and stabilized, fluctuating around 1.6 to 1.7 times through late 2025. This stabilization at a lower level compared to early 2021 suggests a shift in the company's efficiency in generating revenue from equity, possibly reflecting changes in capital structure or investment strategy.

Overall Analysis

The company exhibits strong revenue growth accompanied by rising stockholders' equity, reflecting expanding business scale and capitalization. The temporary dip in equity turnover ratio indicates a period where equity growth outstripped revenue gains, possibly due to increased capital raise or retained earnings. The latter recovery and stabilization of the equity turnover ratio suggest improved utilization of equity to generate revenues. The overall financial trends suggest growth with measured efficiency adjustments over time.