Enterprise Value to FCFF (EV/FCFF)
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- Balance Sheet: Liabilities and Stockholders’ Equity
- Common-Size Balance Sheet: Assets
- Analysis of Profitability Ratios
- Analysis of Liquidity Ratios
- Common Stock Valuation Ratios
- Enterprise Value to EBITDA (EV/EBITDA)
- Price to FCFE (P/FCFE)
- Capital Asset Pricing Model (CAPM)
- Return on Assets (ROA) since 2005
- Current Ratio since 2005
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Free Cash Flow to The Firm (FCFF)
Netflix Inc., FCFF calculation
US$ in thousands
Based on: 10-K (reporting date: 2025-12-31), 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).
The financial information reveals a substantial and consistent increase in both net cash provided by operating activities and free cash flow to the firm (FCFF) over the five-year period. A marked acceleration in growth is evident beginning in 2022.
- Net Cash from Operations
- Net cash provided by operating activities demonstrates a significant surge from US$392.61 million in 2021 to US$2,026.26 million in 2022. This growth continues through 2023, reaching US$7,274.30 million, and remains strong in 2024 at US$7,361.36 million. Further expansion is observed in 2025, with net cash from operations reaching US$10,149.27 million. This indicates a strengthening ability to generate cash from core business operations.
- Free Cash Flow to the Firm (FCFF)
- FCFF mirrors the trend in operating cash flow, increasing from US$539.85 million in 2021 to US$2,214.97 million in 2022. The rate of increase accelerates in subsequent years, with FCFF reaching US$7,521.27 million in 2023 and US$7,508.64 million in 2024. The upward trajectory continues into 2025, culminating in US$10,047.87 million. The consistency of FCFF growth suggests a robust financial position and increasing capacity for discretionary spending, debt repayment, or shareholder returns.
The close alignment between the trends in net cash from operations and FCFF suggests that changes in working capital or capital expenditures are not significantly impacting the overall cash available to the firm. The substantial increases observed from 2022 onwards warrant further investigation to understand the underlying drivers of this improved cash generation.
Interest Paid, Net of Tax
Netflix Inc., interest paid, net of tax calculation
US$ in thousands
Based on: 10-K (reporting date: 2025-12-31), 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).
2 2025 Calculation
Interest paid, tax = Interest paid × EITR
= × =
The effective income tax rate exhibited an increasing trend from 2021 to 2022, followed by relative stability through 2025. Interest paid, net of tax, demonstrated a decreasing trend from 2021, stabilizing in the latter two observed periods.
- Effective Income Tax Rate
- The effective income tax rate increased from 12.00% in 2021 to 15.00% in 2022, representing a 25% increase. Subsequently, the rate decreased to 13.00% in 2023 and remained constant at 13.00% through 2025. This suggests a potential shift in the composition of income or changes in applicable tax laws in 2022, followed by a return to a more consistent rate.
- Interest Paid, Net of Tax
- Interest paid, net of tax, decreased from US$671,820 thousand in 2021 to US$596,439 thousand in 2022, a decline of approximately 11.2%. A further, albeit smaller, decrease was observed in 2023, reaching US$595,518 thousand. The value then decreased slightly to US$586,817 thousand in 2024 and remained unchanged through 2025. This indicates a reduction in net interest expense over the period, potentially due to debt repayment, refinancing at lower rates, or changes in the tax treatment of interest expense.
The stabilization of both the effective income tax rate and interest paid, net of tax, in the most recent periods suggests a period of relative stability in these financial aspects. Further investigation into the underlying drivers of these trends would be necessary for a more comprehensive understanding.
Enterprise Value to FCFF Ratio, Current
Netflix Inc., current EV/FCFF calculation, comparison to benchmarks
| Selected Financial Data (US$ in thousands) | |
| Enterprise value (EV) | |
| Free cash flow to the firm (FCFF) | |
| Valuation Ratio | |
| EV/FCFF | |
| Benchmarks | |
| EV/FCFF, Competitors1 | |
| Alphabet Inc. | |
| Comcast Corp. | |
| Meta Platforms Inc. | |
| Trade Desk Inc. | |
| Walt Disney Co. | |
| EV/FCFF, Sector | |
| Media & Entertainment | |
| EV/FCFF, Industry | |
| Communication Services | |
Based on: 10-K (reporting date: 2025-12-31).
1 Click competitor name to see calculations.
If the company EV/FCFF is lower then the EV/FCFF of benchmark then company is relatively undervalued.
Otherwise, if the company EV/FCFF is higher then the EV/FCFF of benchmark then company is relatively overvalued.
Enterprise Value to FCFF Ratio, Historical
Netflix Inc., historical EV/FCFF calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Enterprise value (EV)1 | ||||||
| Free cash flow to the firm (FCFF)2 | ||||||
| Valuation Ratio | ||||||
| EV/FCFF3 | ||||||
| Benchmarks | ||||||
| EV/FCFF, Competitors4 | ||||||
| Alphabet Inc. | ||||||
| Comcast Corp. | ||||||
| Meta Platforms Inc. | ||||||
| Trade Desk Inc. | ||||||
| Walt Disney Co. | ||||||
| EV/FCFF, Sector | ||||||
| Media & Entertainment | ||||||
| EV/FCFF, Industry | ||||||
| Communication Services | ||||||
Based on: 10-K (reporting date: 2025-12-31), 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).
3 2025 Calculation
EV/FCFF = EV ÷ FCFF
= ÷ =
4 Click competitor name to see calculations.
The Enterprise Value to Free Cash Flow to the Firm (EV/FCFF) ratio exhibits a significant decreasing trend over the observed period. Initially high, the ratio declines substantially before stabilizing in later years. Enterprise Value fluctuates, while Free Cash Flow to the Firm demonstrates consistent growth.
- Enterprise Value (EV)
- Enterprise Value peaked in December 2023 at US$254,251,442 thousand, representing an increase from the prior year. However, it decreased in December 2024 and again in December 2025 to US$369,013,081 thousand. This suggests potential shifts in market perception of the company’s value or changes in its capital structure.
- Free Cash Flow to the Firm (FCFF)
- Free Cash Flow to the Firm shows a consistent upward trajectory throughout the period. Starting at US$539,845 thousand in December 2021, it increased substantially to US$2,214,967 thousand in December 2022, and continued to grow, reaching US$10,047,870 thousand in December 2025. This indicates improving cash generation capabilities.
- EV/FCFF Ratio
- The EV/FCFF ratio decreased dramatically from 335.37 in December 2021 to 77.11 in December 2022, largely driven by the significant increase in FCFF. The ratio continued to decline, reaching 33.80 in December 2023. While it increased slightly to 56.17 in December 2024, it decreased again to 36.73 in December 2025. The decreasing trend suggests that the market valuation, as represented by Enterprise Value, is growing at a slower rate than the company’s ability to generate free cash flow, or that the market is becoming more optimistic about future cash flows. The stabilization in the ratio during the last two observed periods may indicate a more balanced relationship between valuation and cash flow generation.
The observed trends suggest a potential re-evaluation of the company by the market, coupled with strengthening operational performance as evidenced by the increasing FCFF. Further investigation into the drivers of Enterprise Value fluctuations would be beneficial.