Netflix NFLX
The largest paid streaming service, now adding ads and live events to price rises. The open question is whether growth holds near 12% once the easy gains from pricing and password sharing are behind it. Seven questions that follow the money through the business, the price and the tape. Every number comes from SEC filings and market data, and every score from a rule printed next to it.
What this File stands on. Annual figures: FY2025 10-K (year to 2025-12-31, filed 2026-01-23). "Last 12 months" figures add the quarters through 2026-09-30 (10-Q, filed 2026-10-21). Prices to 2026-10-21. "Last 12 months" figures leave out a one-off: the Warner Bros. termination fee Netflix received when it walked away from the deal ($2.8B, quarter to 2026-03-31, Q2 2026 10-Q), taken out of operating cash flow. The numbers rebuild every Monday, so each new 10-Q or 10-K appears within a week of filing. The written parts (business, defences, risks, the read) are from the FY2025 10-K, and the terminal read is dated 2026-10-18.
44 cents of every revenue dollar come from US and Canada, up 15% on the year.
What it does
Runs the world's largest paid streaming service. Members watch series, films, games and live events on any screen for a monthly fee.
How it charges
Almost all of it is monthly membership fees, from about $1 to $37 a month depending on country and plan. Advertising on the cheaper ad plan is small but growing fast: over $1.5 billion in 2025.
Who buys, and why
More than 325 million paying households in over 190 countries. They come for the shows only Netflix has, and can cancel any month.
Of every $100 of sales, $16 is left for owners once staff stock pay is counted as a cost.
Owner earnings = operating cash flow minus capital spending minus stock-based pay. Stock pay is a real cost: it is paid in shares instead of cash.
What it is building Harvesting
It spends little on growth. The business is being run for cash, not built.
R&D is treated as an investment written off over 5 years. Capital spending up to depreciation keeps the business standing; anything above it is growth spending. A company that puts more than 10% of sales into R&D and growth capex is building; it is paying off when after-tax profit has grown by at least 12 cents for every extra dollar of capital it put in.
The share count is shrinking 1.3% a year, so each share owns a little more of the business every year.
CEO Ted Sarandos and Greg Peters (co-CEOs), in the seat since 2023.
The strongest defence is scale economies. Gross margin has been moving, within 11 points over 6 periods.
Members can cancel any month with no contract, so the hold is the shows and the habit, not a lock-in.
Big hits spread by people talking about them, but the service does not get better for one member because another joins.
About $18 billion a year of content cash spread over 325 million members, a cost per member no rival streamer can match.
It now owns its biggest franchises, from Stranger Things to Squid Game, though much of what members watch is still licensed.
Sources are rated from the annual report (notes file). The two evidence checks are computed: margins that hold and high returns on capital are what a real defence looks like in the numbers.
A reverse discounted cash flow: the growth today's price requires, set against what the business has actually delivered, and how that changes if you demand a different return.
The IVT terminal read on the weekly and daily charts: bias, money flow, strength, whether the entry window is open, and the sharp captures.
The worst fall of the last five years, the balance sheet, the pressure points and the specific conditions that would break the case.
Where the business sits on quality against price, the quality score line by line, and the conclusion.
The rest of the NFLX File
Chapters 5 to 8: the growth today\'s price assumes, the full IVT terminal read with sharp captures, what would break the case, and the final read.
Where every number comes from 13 figures, each linked to its SEC filing
| Figure | Value | Period | Filing |
|---|---|---|---|
| Revenue | $45.2B | FY25 | 10-K, filed 2026-01-23Revenues |
| Cost of sales | $23.3B | FY25 | 10-K, filed 2026-01-23CostOfRevenue |
| Operating income | $13.3B | FY25 | 10-K, filed 2026-01-23OperatingIncomeLoss |
| Net income | $11.0B | FY25 | 10-K, filed 2026-01-23NetIncomeLoss |
| Operating cash flow | $10.1B | FY25 | 10-K, filed 2026-01-23NetCashProvidedByUsedInOperatingActivities |
| Capital spending | $688M | FY25 | 10-K, filed 2026-01-23PaymentsToAcquirePropertyPlantAndEquipment |
| Stock-based pay | $368M | FY25 | 10-K, filed 2026-01-23ShareBasedCompensation |
| Buybacks | $9.1B | FY25 | 10-K, filed 2026-01-23PaymentsForRepurchaseOfCommonStock |
| Diluted shares | 4,344M | FY25 | 10-K, filed 2026-01-23WeightedAverageNumberOfDilutedSharesOutstanding |
| Cash and investments | $8.2B | 2026-09-30 | 10-Q, filed 2026-10-21CashAndCashEquivalentsAtCarryingValue |
| Long-term debt | $12.7B | 2026-09-30 | 10-Q, filed 2026-10-21LongTermDebtNoncurrent |
| Short-term borrowings | $2.5B | 2026-09-30 | 10-Q, filed 2026-10-21ShortTermBorrowings |
| Shareholders' equity | $29.3B | 2026-09-30 | 10-Q, filed 2026-10-21StockholdersEquity |
Educational research, not investment advice and not a recommendation to buy or sell any security. Scores are mechanical and reproducible from public filings; the notes are the author's judgment. Author position in NFLX: none. Sources: SEC EDGAR XBRL company facts (filings to 2026-09-30), daily prices to 2026-10-21. Past performance does not predict future returns.