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What changed in Netflix's 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of Netflix's 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+230 added−209 removedSource: 10-K (2026-01-23) vs 10-K (2025-01-27)

Top changes in Netflix's 2025 10-K

230 paragraphs added · 209 removed · 175 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

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Biggest changeInvestors and others should note that we announce material financial and other information to our investors using our investor relations website ( ir.netflix.net ), SEC filings, press releases, public conference calls and webcasts. We use these channels as well as social media and blogs to communicate with our members and the public about our company, our services and other issues.
Biggest changeWe use these channels as well as social media and blogs to communicate with our members and the public about our company, our services and other issues. It is possible that the information we post on social media and blogs could be deemed to be material information.
Historically, media has been highly regulated in many countries. We are seeing some of these legacy regulatory frameworks be updated and expanded to address services like ours. In particular, we are seeing some countries update their cultural support legislation to include services like Netflix. This includes content quotas, levies and investment obligations.
Historically, media has been highly regulated in many countries. We are seeing some of these legacy regulatory frameworks be updated and expanded to address services like ours. In particular, we are seeing some countries update their cultural support legislation to include services like Netflix. This includes investment obligations, levies, and content catalog quotas.
We also have a number of employees engaged in content production, some of whom are part-time or temporary, and whose numbers fluctuate throughout the year and may be covered by collective bargaining agreements. We believe an important component of our success is our company culture.
We also have a number of employees engaged in content production, some of whom are part-time or temporary, and whose numbers fluctuate throughout the year and may be covered by collective bargaining agreements. We believe an important component of our success is our company culture as detailed in the “Netflix Culture Memo”, which was updated in 2024.
We compete with a broad set of activities for consumers’ leisure time, including other entertainment video providers, such as linear television, streaming entertainment providers (including those that provide pirated content), video gaming providers, as well as user-generated content, some of which are by professional content creators, and more broadly against other sources of entertainment, such as social media, that our members could choose in their moments of free time.
We compete with a broad set of activities for consumers’ leisure time, including other entertainment video providers, such as linear television, streaming entertainment providers (including those that provide pirated content), video gaming providers, open content platform providers, which provide access to user-generated and professionally produced content, as well as more broadly against other sources of entertainment, such as social media, that our members could choose in their moments of free time.
It is possible that the information we post on social media and blogs could be deemed to be material information. Therefore, we encourage investors, the media, and others interested in our company to review the information we post on the social media channels and blogs listed on our investor relations website. 3 Table of Contents
Therefore, we encourage investors, the media, and others interested in our company to review the information we post on the social media channels and blogs listed on our investor relations website. 3 Table of Contents
We conduct pay equity analyses at least annually, and have adopted practices to help ensure that employees from underrepresented groups are not being underpaid based on gender identity (globally) and race or ethnicity (U.S.) relative to others doing the same or similar work under comparable circumstances. We aim to rectify any pay gaps that we find through this analysis.
We conduct pay equity analyses at least annually, and have adopted practices to help ensure that employees from underrepresented groups are not being underpaid based on gender identity (globally) and race or ethnicity (United States (“U.S.”)) relative to others doing the same or similar work under comparable circumstances.
We make available, free of charge on our website, access to our Annual Report on Form 10-K, our Quarterly Reports on Form 10-Q, our Current Reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), as soon as reasonably practicable after we file or furnish them electronically with the Securities and Exchange Commission ("SEC").
We make available, free of charge on our website, access to our Annual Report on Form 10-K, our Quarterly Reports on Form 10-Q, our Current Reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as soon as reasonably practicable after we file or furnish them electronically with the Securities and Exchange Commission (“SEC”). 2 Table of Contents Investors and others should note that we announce material financial and other information to our investors using our investor relations website ( ir.netflix.net ), SEC filings, press releases, public conference calls and webcasts.
BUSINESS SEGMENTS We operate as one operating segment. Our revenues are primarily derived from monthly membership fees for services related to streaming content to our members. See Note 12, Segment and Geographic Information , in the accompanying notes to our consolidated financial statements for further detail. COMPETITION The market for entertainment video is intensely competitive and subject to rapid change.
See Note 13, Segment and Geographic Information , in the accompanying notes to our consolidated financial statements for further detail. COMPETITION The market for entertainment video is intensely competitive and subject to rapid change.
We have often referred to this choice as our objective of "winning moments of truth." In attempting to win these moments of truth with our members, we seek to continually improve our service, including both our technology and our content offerings.
We have often referred to this choice as our objective of “winning moments of truth.” In attempting to win these moments of truth with our members, we seek to continually improve our service, including both our technology and our content offerings. 1 Table of Contents INTELLECTUAL PROPERTY We regard our trademarks, service marks, copyrights, patents, domain names, trade dress, trade secrets, proprietary technologies and similar intellectual property as important to our success.
We care about the health and well-being of our employees and their families and provide a variety of benefit programs based on region, including health benefits. In the U.S., employees generally receive an annual cash health benefit allowance that they may allocate to medical, dental and vision premiums in a way that makes sense for them.
In the U.S., employees generally receive an annual cash health benefit allowance that they may allocate to medical, dental and vision premiums in a way that makes sense for them. Employees have access to a host of other benefits, including mental health, childcare, family planning and a company match for charitable donations.
Members can play, pause and resume watching as much as they want, anytime, anywhere, and can change their plans at any time. Our core strategy is to grow our business globally within the parameters of our operating margin target. We strive to continuously improve our members' experience by offering compelling content that delights them and attracts new members.
Our core strategy is to grow our business globally within the parameters of our operating margin target. We strive to continuously improve our members' experience by offering compelling content that delights them and attracts new members. We aim to offer a range of pricing plans, including our ad-supported subscription plan, to meet a variety of consumer needs.
In general these regulations impact all services and may make operating in certain jurisdictions more expensive or restrictive as to the content offerings we may provide. HUMAN CAPITAL We view our employees and our culture as key to our success. As of December 31, 2024, we had approximately 14,000 full-time employees.
In general these regulations impact all services and may make operating in certain jurisdictions more expensive or restrictive as to the content offerings we may provide. HUMAN CAPITAL Our business is to entertain the world across different countries, cultures, languages and tastes.
Employees have access to a host of other benefits, including mental health, childcare, family planning and a company match for charitable donations. We believe that our approach to human capital resources has been instrumental in our growth, and has made Netflix a desirable destination for employees. 2 Table of Contents OTHER INFORMATION We maintain a website at www.netflix.com.
We believe that our approach to human capital resources has been instrumental in our growth, and has made Netflix a desirable destination for employees. OTHER INFORMATION We maintain a website at www.netflix.com. The contents of our website are not incorporated in, or otherwise to be regarded as part of, this Annual Report on Form 10-K.
Item 1. Business ABOUT US Netflix, Inc. (“Netflix”, “the Company”, “registrant”, “we”, or “us”) is one of the world’s leading entertainment services with approximately 302 million paid memberships in over 190 countries enjoying TV series, films and games across a wide variety of genres and languages.
Item 1. Business ABOUT US Netflix, Inc. (“Netflix”, the “Company”, “registrant”, “we”, or “us”) is one of the world’s leading entertainment services offering TV series, films, games and live programming across a wide variety of genres and languages. Members can play, pause and resume watching as much as they want, anytime, anywhere, and can change their plans at any time.
Of these, approximately 9,600 (69%) were located in the United States and Canada, 2,200 (16%) in Europe, Middle East, and Africa, 600 (4%) in Latin America and 1,600 (11%) in Asia-Pacific.
We view our employees and our culture as key to our success. As of December 31, 2025, we had approximately 16,000 full-time employees. Of these, approximately 10,900 (68%) were located in the United States and Canada, 2,500 (16%) in Europe, Middle East, and Africa, 1,900 (12%) in Asia-Pacific and 700 (4%) in Latin America.
We aim to offer a range of pricing plans, including our ad-supported subscription plan, to meet a variety of consumer needs. We seek to drive conversation around our content to further enhance member joy, and we are continuously enhancing our user interface to help our members more easily choose content that they will find enjoyable.
We seek to drive conversation around our content to further enhance member joy, and we are continuously enhancing our user interface to help our members more easily choose content that they will find enjoyable. BUSINESS SEGMENTS We operate as one operating segment. Our revenues are primarily derived from monthly membership fees for services related to streaming content to our members.
We aim to attract and retain great people - representing a diverse array of perspectives and skills - to work together as a dream team. As our business grows and changes, we seek to improve our culture to meet the new needs of our business.
We aim to attract and retain great people — representing a broad array of perspectives and skills — to work together as a dream team. For more people and cultures to see themselves reflected on screen, it is important that our employee base represents the communities we serve.
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SEASONALITY Our membership growth exhibits a seasonal pattern that reflects variations when consumers buy internet-connected screens and when they tend to increase their viewing. Historically, the fourth quarter represents our greatest streaming membership growth.
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To entertain an audience this global, our Company needs to reflect the world and the variety of stories we tell. To help ensure our workforce is representative of the members we serve, we employ people in multiple countries around the world and work to maintain a global culture of inclusion.
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In addition, our membership growth can be impacted by our content release schedule and changes to pricing and plans. 1 Table of Contents INTELLECTUAL PROPERTY We regard our trademarks, service marks, copyrights, patents, domain names, trade dress, trade secrets, proprietary technologies and similar intellectual property as important to our success.
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Our culture is focused on excellence and creating an environment where talented people can thrive — lifting ourselves, each other and our audiences higher and higher. We engage employees and seek feedback through regular town halls, surveys, business reviews and memos, which we often share broadly, inviting comments.
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This culture, which is detailed in a "Culture Memo" located on our website, is often described as providing a unique environment for our employees to perform the best work of their lives in pursuit of excellence.
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We aim to rectify any pay gaps that we find through this analysis. We care about the health and well-being of our employees and their families and provide a variety of benefit programs based on region, including health benefits.
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We believe our dynamic culture helps us create a better experience for our members, employees, creators and partners. As we have expanded our offices globally, our company culture remains an important aspect of our operations. We are mindful of cultural differences across and within regions.
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Fostering a work environment that is culturally diverse, inclusive and equitable is a major focus for us. We work to build diversity, inclusion and equity into all aspects of our operations globally, with the goal of having diversity and inclusion function as a critical lens through which each Netflix employee carries out their role.
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We want more people and cultures to see themselves reflected on screen - so it’s important that our employee base is diverse and represents the communities we serve. We look to help increase representation by educating our people leaders and recruiters on how to hire more inclusively, and to help the company and senior leaders diversify their networks.
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We also support numerous employee resource groups (ERGs), representing employees and allies from a broad array of historically underrepresented and/or marginalized communities. We publish annually an update on our inclusion initiatives and progress, which further highlights our approach to diversity and inclusion, and publish our EEO-1 reports on our website. We believe in fostering great leaders.
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We offer various experiences and training to inform our employees about our culture and other context that we believe is important for success at Netflix. We aim to equip our people leaders (officers, VPs, directors, and manager-level employees) to lead the business and our teams in alignment with our expectations and strategic objectives.
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The contents of our website are not incorporated in, or otherwise to be regarded as part of, this Annual Report on Form 10-K.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeThere are numerous patents that broadly claim means and methods of conducting business on the internet. We have not searched for patents relative to our technology. Defending ourselves against intellectual property claims, whether they are with or without merit or are determined in our favor, results in costly litigation and diversion of technical and management personnel.
Biggest changeDefending ourselves against intellectual property claims, whether they are with or without merit or are determined in our favor, results in costly litigation and diversion of technical and management personnel. It also may result in our inability to use our current technology and products, our recommendation and merchandising technology or inability to market our service or merchandise our products.
In addition, technology changes to our streaming functionality may require that partners update their devices, and from time to time, lead to us to stop supporting the delivery of our service on certain legacy devices.
In addition, technology changes to our streaming functionality may require that partners update their devices, and from time to time, lead us to stop supporting the delivery of our service on certain legacy devices.
In addition to the risks that we face in the U.S., our international operations involve risks that could adversely affect our business, including: • the need to adapt our content and user interfaces for specific cultural and language differences; • difficulties and costs associated with staffing and managing foreign operations; • political or social unrest, global hostilities, and economic instability; • compliance with laws such as the Foreign Corrupt Practices Act, UK Bribery Act and other anti-corruption laws, export controls and economic sanctions, and local laws prohibiting corrupt payments to government officials; • difficulties in understanding and complying with local laws, regulations and customs in foreign jurisdictions; • regulatory requirements or government action, whether in response to enforcement of actual or purported legal and regulatory requirements or otherwise, that results in disruption or non-availability of our service or particular content, administrative enforcement actions, fines, and civil and criminal liability, or increased operating costs in the applicable jurisdiction; • application of foreign intellectual property laws, which requires the business to adapt to bespoke compliance rules, or changes to such laws, among other issues, may impact the economics of creating or distributing content, anti-piracy efforts, or our ability to protect or exploit intellectual property rights; • adverse tax consequences such as those related to changes in tax laws or tax rates or their interpretations, and the related application of judgment in determining our global provision for income taxes, deferred tax assets or liabilities or other tax liabilities given the ultimate tax determination is uncertain; • fluctuations in currency exchange rates, which have and may continue to impact revenues and expenses of our international operations and expose us to foreign currency exchange rate risk, and while we use derivative and non-derivative instruments to hedge certain exposures to fluctuations in exchange rates, the use of such hedging activities may not be effective in offsetting an adverse financial impact and may introduce or heighten counterparty risk and we may choose not to hedge certain exposures; • rates of inflation; • profit repatriation, currency control regulations and other restrictions on the transfer of funds; • differing payment processing systems as well as consumer use and acceptance of electronic payment methods, such as payment cards; • new and different sources of competition; 12 Table of Contents • censorship requirements that cause us to remove or edit popular content, leading to consumer disappointment, brand tarnishment or dissatisfaction with our service; • low usage and/or penetration of internet-connected consumer electronic devices; • different and more stringent user protection, data protection, privacy and other laws, including data localization and/or restrictions on data export, and local ownership requirements; • availability of reliable broadband connectivity and wide area networks in targeted areas for expansion; • differing laws and consumer understanding/attitudes regarding the illegality of piracy; • negative impacts from trade disputes; and • implementation of regulations designed to stimulate the local production of film and TV series in order to promote and preserve local culture and economic activity, including local content quotas, investment obligations, and levies to support local film funds.
In addition to the risks that we face in the U.S., our international operations involve risks that could adversely affect our business, including: • the need to adapt our content and user interfaces for specific cultural and language differences; 12 Table of Contents • difficulties and costs associated with staffing and managing foreign operations; • political or social unrest, global hostilities, and economic instability; • compliance with laws such as the Foreign Corrupt Practices Act, UK Bribery Act and other anti-corruption laws, export controls and economic sanctions, and local laws prohibiting corrupt payments to government officials; • difficulties in understanding and complying with local laws, regulations and customs in foreign jurisdictions; • regulatory requirements or government action, whether in response to enforcement of actual or purported legal and regulatory requirements or otherwise, that results in disruption or non-availability of our service or particular content, administrative enforcement actions, fines, and civil and criminal liability, or increased operating costs in the applicable jurisdiction; • application of foreign intellectual property laws, which requires the business to adapt to bespoke compliance rules, or changes to such laws, among other issues, may impact the economics of creating or distributing content, anti-piracy efforts, or our ability to protect or exploit intellectual property rights; • adverse tax consequences such as those related to changes in tax laws or tax rates or their interpretations, and the related application of judgment in determining our global provision for income taxes, deferred tax assets or liabilities or other tax liabilities given the ultimate tax determination is uncertain; • fluctuations in currency exchange rates, which have and may continue to impact revenues and expenses of our international operations and expose us to foreign currency exchange rate risk, and while we use derivative and non-derivative instruments to hedge certain exposures to fluctuations in exchange rates, the use of such hedging activities may not be effective in offsetting an adverse financial impact and may introduce or heighten counterparty risk and we may choose not to hedge certain exposures; • rates of inflation; • profit repatriation, currency control regulations and other restrictions on the transfer of funds; • differing payment processing systems as well as consumer use and acceptance of electronic payment methods, such as payment cards; • new and different sources of competition; • censorship requirements that cause us to remove or edit popular content, leading to consumer disappointment, brand tarnishment or dissatisfaction with our service; • low usage and/or penetration of internet-connected consumer electronic devices; • different and more stringent user protection, data protection, privacy and other laws, including data localization and/or restrictions on data export, and local ownership requirements; • availability of reliable broadband connectivity and wide area networks in targeted areas for expansion; • differing laws and consumer understanding/attitudes regarding the illegality of piracy; • negative impacts from trade disputes and evolving trade policy; and • implementation of regulations designed to stimulate the local production of film and TV series in order to promote and preserve local culture and economic activity, including local content quotas, investment obligations, and levies to support local film funds.
If we do not grow as expected, given, in particular, that our content costs are largely fixed in nature, we may not be able to adjust our expenditures or increase our (per membership) revenues, including by adjusting membership pricing, commensurate with the lowered growth rate such that our margins, liquidity and results of operations may be adversely impacted.
If we do not grow as expected, given, in particular, that our content costs are largely fixed in nature, we may not be able to adjust our expenditures or increase our revenues, including by adjusting membership pricing, commensurate with the lowered growth rate such that our margins, liquidity and results of operations may be adversely impacted.
Moreover, we may incur additional indebtedness in the future and incur other obligations, including additional streaming content obligations. Our ability to make payments on our debt and other obligations will depend on our financial and operating performance, which is subject to prevailing economic and competitive conditions and to certain financial, business and other factors beyond our control.
Moreover, we may incur additional indebtedness in the future and incur other obligations, including any additional streaming content obligations. Our ability to make payments on our debt and other obligations will depend on our financial and operating performance, which is subject to prevailing economic and competitive conditions and to certain financial, business and other factors beyond our control.
Our members pay for our service using a variety of different payment methods, including credit and debit cards, gift cards, prepaid cards, direct debit, online wallets and direct carrier and partner billing. We rely on internal systems and those of third parties to process payment.
Our members pay for our service using a variety of different payment methods, including credit and debit cards, gift cards, prepaid cards, direct debit, online wallets and direct carrier and partner billing. We rely on internal systems and those of third parties to process payments.
Our advertising offering is new and subject to various risks and uncertainties, which may adversely affect our business. We have limited experience and operating history offering advertising on our service, and our advertising revenue may not grow as we expect.
Our advertising offering is subject to various risks and uncertainties, which may adversely affect our business. We have limited experience and operating history offering advertising on our service, and our advertising revenue may not grow as we expect.
To the extent our content is deemed controversial or offensive by government regulators, we may face direct or indirect 5 Table of Contents retaliatory action or behavior, including being required to remove such content from our service, our entire service could be banned and/or become subject to heightened regulatory scrutiny across our business and operations.
To the extent our content, including any advertisements, is deemed controversial or offensive by government regulators, we may face direct or indirect retaliatory action or behavior, including being 5 Table of Contents required to remove such content from our service, our entire service could be banned and/or become subject to heightened regulatory scrutiny across our business and operations.
While the retail side of Amazon competes with us, we do not believe that Amazon will use the AWS operation in such a manner as to gain competitive advantage against our service, although if it were to do so it could harm our business.
While the retail side of Amazon competes with us, we do not believe that Amazon will use the AWS operation in a manner to gain competitive advantage against our service, although if it were to do so it could harm our business.
We are subject to laws, rules and regulations relating to privacy and the collection, use and security of personal information, including but not limited to Regulation (EU) 2016/679 (also known as the General Data Protection Regulation or “GDPR”) and the California Privacy Rights Act ("CPRA").
We are subject to laws, rules and regulations relating to privacy and the collection, use and security of personal information, including but not limited to Regulation (EU) 2016/679 (also known as the General Data Protection Regulation or “GDPR”) and the California Privacy Rights Act (“CPRA”).
Certain laws intended to prevent network operators from discriminating against the legal traffic that traverse their networks have been implemented in many countries, including across the EU and several U.S. states. In others, the laws may be nascent, evolving or non-existent. For example, a U.S. federal appeals court recently overturned the Federal Communications Commission's net neutrality rules.
Certain laws intended to prevent network operators from discriminating against the legal traffic that traverse their networks have been implemented in many countries, including across the EU and several U.S. states. In others, the laws may be nascent, evolving or non-existent. For example, in January 2025, a U.S. federal appeals court overturned the Federal Communications Commission's net neutrality rules.
Our ability to generate advertising revenue is subject to various risks and will depend on a number of factors, including: • our ability to attract and retain advertisers; • fluctuations in memberships, including those selecting the ad-supported subscription plan, and member engagement; • the quantity or quality of ads shown to our members; • our ability to compete effectively for advertising spend; • the impact of seasonal, cyclical or other shifts in advertising spend, including the impact of macroeconomic conditions; • the availability, accuracy, utility, and security of analytics and measurement solutions offered by us or third parties that demonstrate the value of our ads to marketers, or our ability to further improve such tools; • changes in the way advertising on devices, connected TVs or on personal computers is measured or priced; • adverse legal developments relating to advertising or measurement tools; • changes in third-party policies, which may negatively impact the ability to measure, deliver and select ads to be served; • regulatory, legislative and industry developments relating to the collection and use of information and other privacy considerations, including regulations related to ad targeting and measurement tools; • any liability or reputational harm from advertisements shown on our service; 7 Table of Contents • our relationship with third-party service providers for the management, operation, sale and technology to support advertisements on our service; • our ability to develop and expand an advertising sales and advertising technology organization team; • our ability to develop the technology and related infrastructure to support advertising and drive value to advertisers; • the impact of our content and reputation on advertisers’ willingness to spend with us; and • any member dissatisfaction due to advertisements.
Our ability to generate advertising revenue is subject to various risks and will depend on a number of factors, including: • our ability to attract and retain advertisers; • fluctuations in membership plan mix and member engagement; • the quantity or quality of ads shown to our members; • our ability to compete effectively for advertising spend; • the impact of seasonal, cyclical or other shifts in advertising spend, including the impact of macroeconomic conditions; 7 Table of Contents • the availability, accuracy, utility, and security of analytics and measurement solutions offered by us or third parties that demonstrate the value of our ads to marketers, or our ability to further improve such tools; • changes in the way advertising on devices, connected TVs or on personal computers is measured or priced; • adverse legal developments relating to advertising, targeting, or measurement tools; • changes in third-party policies, which may negatively impact the ability to measure, deliver and select ads to be served; • regulatory, legislative and industry developments relating to the collection and use of information and other privacy considerations, including regulations related to ad targeting and measurement tools; • any liability or reputational harm from advertisements shown on our service; • our relationship with third-party service providers for the management, operation, sale and technology to support advertisements on our service; • our ability to develop and expand an advertising sales and advertising technology organization team; • our ability to develop the technology, data, and related infrastructure to support advertising and drive value to advertisers; • the impact of our content and reputation on advertisers’ willingness to spend with us; and • any member dissatisfaction due to advertisements.
Any actual or perceived failure to comply with the GDPR, the California Consumer Privacy Act/CPRA, other data privacy laws or regulations, or related contractual or other obligations, or any perceived privacy rights violation, have and could in the future lead to investigations, claims, and proceedings by governmental entities and private parties, which to date have not been material but 10 Table of Contents may result in significant damages for contract breach, and other significant costs, penalties, and other liabilities, as well as harm to our reputation and market position.
Any actual or perceived failure to comply with the GDPR, the California Consumer Privacy Act/CPRA, other data privacy laws or regulations, or related contractual or other obligations, or any perceived privacy rights violation, have and could in the future lead to investigations, claims, and proceedings by governmental entities and private parties, which to date have not been material but may result in significant damages for contract breach, and other significant costs, penalties, and other liabilities, as well as harm to our reputation and market position.
Amazon Web Services (“AWS”) provides a distributed computing infrastructure platform for business operations, or what is commonly referred to as a "cloud" computing service. We have architected our software and computer systems so as to utilize data processing, storage capabilities and other services provided by AWS. Currently, we run the vast majority of our computing on AWS.
Amazon Web Services (“AWS”) provides a distributed computing infrastructure platform for business operations, or what is commonly referred to as a “cloud” computing service. We have architected our software and computer systems to utilize data processing, storage capabilities and other services provided by AWS. Currently, we run the vast majority of our computing on AWS.
We and many of the third parties we work with rely on open source software and libraries that are integrated into a variety of applications, tools and systems, which may increase our exposure to vulnerabilities. The addition of new features or upgrades also increases our exposure to vulnerabilities, and generative artificial intelligence could intensify these cybersecurity risks.
We and many of the third parties we work with rely on open source software and libraries that are integrated into a variety of applications, tools and systems, which may increase our exposure to vulnerabilities. The addition of new features or upgrades also increases our exposure to vulnerabilities, and generative AI could intensify these cybersecurity risks.
We could also face boycotts which could adversely affect our business. Furthermore, to the extent our response to government action or our marketing, customer service and public relations efforts are not effective or result in negative reaction, our ability to establish and maintain a positive reputation may likewise be adversely impacted.
We could also face consumer boycotts or cancellation campaigns, which could adversely affect our business. Furthermore, to the extent our response to government action or our marketing, customer service and public relations efforts are not effective or result in negative reaction, our ability to establish and maintain a positive reputation may likewise be adversely impacted.
Efforts to prevent hackers from disrupting our service or otherwise accessing our systems are expensive to develop, implement and maintain. These efforts require ongoing monitoring and updating as technologies change and efforts to overcome security measures become more sophisticated, and may limit the functionality of or otherwise negatively impact our service offering and systems.
Efforts to prevent hackers from disrupting our service or otherwise accessing our systems are expensive to develop, implement and maintain. These efforts 9 Table of Contents require ongoing monitoring and updating as technologies change and efforts to overcome security measures become more sophisticated, and may limit the functionality of or otherwise negatively impact our service offering and systems.
The decision to obtain additional capital will depend on, among other things, our business plans, operating performance and condition of the capital markets. Rising interest rates or any disruption in the capital markets could make it more difficult and expensive for us to raise additional capital or refinance 11 Table of Contents our existing indebtedness.
The decision to obtain additional capital will depend on, among other things, our business plans, operating performance and condition of the capital markets. Rising interest rates or any disruption in the capital markets could make it more difficult and expensive for us to raise additional capital or refinance our existing indebtedness.
Tax laws are regularly being re-examined and evaluated globally. New laws and interpretations of the law are taken into account for financial statement purposes in the quarter or year that they become applicable. Tax authorities are increasingly scrutinizing the tax positions of companies and we have tax audits pending in several jurisdictions.
Tax laws are regularly being re-examined and evaluated globally. New laws and interpretations of the law are taken into account for financial statement purposes in the quarter or year that they become applicable. Tax authorities are increasingly scrutinizing the tax positions of companies and we have tax audits pending in a number of jurisdictions.
If we fail to maintain a positive reputation concerning our service and the content we offer, we may not be able to attract or retain members, we may face regulatory scrutiny and our operating results may be adversely affected. We believe that a positive reputation concerning our service is important in attracting and retaining members.
If we fail to maintain a positive reputation concerning our service and the content we offer, including any advertisements, we may not be able to attract or retain members, we may face regulatory scrutiny and our operating results may be adversely affected. We believe that a positive reputation concerning our service is important in attracting and retaining members.
We may be unable, without significant cost or at all, to prevent third parties from acquiring domain names that are similar to, infringe upon or otherwise decrease the value of our trademarks and other proprietary rights.
We may be unable, without 8 Table of Contents significant cost or at all, to prevent third parties from acquiring domain names that are similar to, infringe upon or otherwise decrease the value of our trademarks and other proprietary rights.
Our intellectual property rights extend to our technology, business processes, the content we produce and distribute through our service, and consumer products, 8 Table of Contents experiences, and marketing assets based thereon. We use the intellectual property of third parties in creating some of our content, merchandising our products and experiences, and marketing our service.
Our intellectual property rights extend to our technology, business processes, the content we produce and distribute through our service, and consumer products, experiences, and marketing assets based thereon. We use the intellectual property of third parties in creating some of our content, merchandising our products and experiences, and marketing our service.
They may offer more compelling content or secure better terms from suppliers, adopt more aggressive pricing and devote more resources to product development, technology, infrastructure, content acquisitions and marketing. New entrants may enter the market or existing providers may adjust their services with unique offerings or approaches to providing entertainment video.
They may offer more compelling content or secure better terms 4 Table of Contents from suppliers, adopt more aggressive pricing and devote more resources to product development, technology, infrastructure, content acquisitions and marketing. New entrants may enter the market or existing providers may adjust their services with unique offerings or approaches to providing entertainment video.
For more information on our streaming content obligations, including those not on our consolidated balance sheet, see Note 8, Commitments and Contingencies, in the accompanying notes to our consolidated financial statements included in Part II, Item 8, "Financial Statements and Supplementary Data" of this Annual Report on Form 10-K.
For more information on our streaming content obligations, including those not on our consolidated balance sheet, see Note 9, Commitments and Contingencies, in the accompanying notes to our consolidated financial statements included in Part II, Item 8, “Financial Statements and Supplementary Data” of this Annual Report on Form 10-K.
There is an increasing focus from regulators, investors, members and other stakeholders on environmental, social, and governance (“ESG”) matters, both in the United States and internationally, including the adoption of new disclosure and regulatory frameworks.
There is a focus from regulators, investors, members and other stakeholders on environmental, social, and governance (“ESG”) matters, both in the United States and internationally, including the adoption of new disclosure and regulatory frameworks.
To the extent revenue growth does not meet our expectations, our liquidity and results of operations could be adversely affected as a result of content commitments and accelerated payment requirements of certain agreements.
To the extent revenue growth does not meet our expectations, our liquidity and results of operations could be adversely affected as a 11 Table of Contents result of content commitments and accelerated payment requirements of certain agreements.
Our charter documents in their current form may discourage, delay or prevent a merger or acquisition that a stockholder may consider favorable because they: • authorize our board of directors, without stockholder approval, to issue up to 10,000,000 shares of undesignated preferred stock; • provide for a classified board of directors until our annual meeting of stockholders to be held in 2025; • prohibit our stockholders from acting by written consent; and • establish advance notice requirements for proposing matters to be approved by stockholders at stockholder meetings.
Our charter documents in their current form may discourage, delay or prevent a merger or acquisition that a stockholder may consider favorable because they: • authorize our board of directors, without stockholder approval, to issue up to 10,000,000 shares of undesignated preferred stock; • prohibit our stockholders from acting by written consent; and • establish advance notice requirements for proposing matters to be approved by stockholders at stockholder meetings.
If actual viewing patterns differ from these estimates, the 14 Table of Contents pattern and/or period of amortization would be changed and could affect the timing or recognition of content amortization.
If actual viewing patterns differ from these estimates, the pattern and/or period of amortization would be changed and could affect the timing or recognition of content amortization.
Members cancel our service for many reasons, including a perception that they do not use the service sufficiently, that they need to cut household expenses, dissatisfaction with content, a preference for competitive services and customer service issues that they believe are not satisfactorily resolved.
Members cancel our service for many reasons, including a perception that they do not use the service sufficiently, that they need to cut household expenses, dissatisfaction with content, including any advertisements that may appear on our service, a preference for competitive services and customer service issues that they believe are not satisfactorily resolved.
As of December 31, 2024, we had the equivalent of $15.7 billion aggregate principal amount of senior notes outstanding (“Notes”), some of which is denominated in currencies other than the U.S. dollar. In addition, we have entered into a revolving credit agreement that provides for a $3 billion unsecured revolving credit facility.
As of December 31, 2025, we had the equivalent of $14.5 billion aggregate principal amount of senior notes outstanding (“Notes”), some of which is denominated in currencies other than the U.S. dollar. In addition, we have entered into a revolving credit agreement that provides for a $3 billion unsecured revolving credit facility.
As of December 31, 2024, we have not borrowed any amount under this revolving credit facility. As of December 31, 2024, we had approximately $6.2 billion of total content liabilities as reflected on our consolidated balance sheet, some of which is denominated in currencies other than the U.S. dollar.
As of December 31, 2025, we have not borrowed any amount under this revolving credit facility. As of December 31, 2025, we had approximately $5.7 billion of total content liabilities as reflected on our consolidated balance sheet, some of which is denominated in currencies other than the U.S. dollar.
If we revise such estimates it could result in greater in-period expenses, which could cause us to miss our earnings guidance or negatively impact the results we report which could negatively impact our stock price. Further, events outside of our control may cause actual results to differ from our forecast. Item 1B. Unresolved Staff Comments None.
If we revise such estimates it could result in greater in-period expenses, which could cause us to miss our earnings guidance or negatively impact the results we report which could negatively impact our stock price. Further, events outside of our control may cause actual results to differ from our forecast.
If our efforts to sustain and improve our existing TV and film offering, as well as develop and expand our video entertainment options, are not done in a manner valued by our current and future members, our ability to attract and retain members may be negatively impacted.
We expanded our entertainment video offering to include games and live programming. If our efforts to sustain and improve our existing TV and film offering, as well as develop and expand our video entertainment options, are not done in a manner valued by our current and future members, our ability to attract and retain members may be negatively impacted.
While we believe that consumer demand, regulatory oversight and competition will help counterbalance these incentives, to the extent that network operators are able to provide preferential treatment to their data as opposed to ours or otherwise implement discriminatory network management practices, our business could be negatively impacted. The extent to which these incentives limit operator behavior differs across markets.
While we believe that consumer demand, regulatory oversight and competition will help counterbalance these incentives, to the extent that network operators are able to provide preferential treatment to their data as opposed to ours or otherwise implement discriminatory network management practices, our business could be negatively impacted.
Labor disputes may have an adverse effect on the Company’s business. We and our partners, suppliers, and vendors engage writers, directors, actors, other talent, trade employees and others who are subject to collective bargaining agreements in the motion picture industry, both in the U.S. and internationally. Expiring collective bargaining agreements may be renewed on terms that are unfavorable to us.
Labor disputes may have an adverse effect on the Company’s business. We and our partners, suppliers, and vendors engage writers, directors, actors, other talent, trade employees and others who are subject to collective bargaining agreements in the motion picture industry, both in the U.S. and internationally.
Such commitments, to the extent estimable under accounting standards, are included in the Contractual Obligations section of Part II, Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations" and Note 8, Commitments and Contingencies in the accompanying notes to our consolidated financial statements included in Part II, Item 8, "Financial Statements and Supplementary Data" of this Annual Report on Form 10-K.
Such commitments, to the extent estimable under accounting standards, are included in the Contractual Obligations section of Part II, Item 7, “Management's Discussion and Analysis of Financial Condition and Results of Operations” and Note 9, Commitments and Contingencies in the accompanying notes to our consolidated financial statements included in Part II, Item 8, “Financial Statements and Supplementary Data” of this Annual Report on Form 10-K.
The price may continue to be volatile due to a number of factors including the following, some of which are beyond our control: • variations in our operating results, including our membership acquisition and retention, revenues, operating income, net income, net cash provided by operating activities and free cash flow; • variations between our actual operating results and the expectations of securities analysts, investors and the financial community; • announcements of developments affecting our business, systems or expansion plans by us or others; • competition, including the introduction of new competitors, their pricing strategies and services; • market volatility in general; • the level of demand for our stock, including the amount of short interest in our stock; • the impact of our current stock repurchase program and any future stock repurchase program we may adopt; • the operating results of our competitors; and • other risks and uncertainties described in these risk factors.
The price may continue to be volatile due to a number of factors including the following, some of which are beyond our control: • variations in our operating results, including our membership acquisition and retention, revenues, operating income, net income, net cash provided by operating activities and free cash flow; • variations between our actual operating results and the expectations of securities analysts, investors and the financial community; • announcements of developments affecting our business, including mergers and acquisitions, such as the WBD transaction, systems or expansion plans by us or others; • competition, including the introduction of new competitors, their pricing strategies and services; • market volatility in general; • the level of demand for our stock, including the amount of short interest in our stock; • the impact of our current stock repurchase program and any future stock repurchase program we may adopt; • the operating results of our competitors; and • other risks and uncertainties described in these risk factors. 14 Table of Contents As a result of these and other factors, investors in our common stock may not be able to resell their shares at or above their original purchase price.
We also utilize our own and third-party 9 Table of Contents content delivery networks ("CDN") to help us stream content and offer games in high volume to Netflix members over the internet.
We also utilize our own and third-party content delivery networks (“CDN”) to help us stream content and offer games in high volume to Netflix members over the internet.
To the extent our content is perceived as low quality, offensive or otherwise not compelling to consumers, our ability to establish and maintain a positive reputation may be adversely impacted.
To the extent our content, including any advertisements that may appear on our service, is perceived as low quality, offensive or otherwise not compelling to consumers, our ability to establish and maintain a positive reputation may be adversely impacted.
In certain instances, we leverage third parties such as our cable and other partners to bill members on our behalf. If these third parties become unwilling or unable to continue processing payments on our behalf, we would have to transition members or otherwise find alternative methods of collecting payments, which could adversely impact member acquisition and retention.
If these third parties become unwilling or unable to continue processing payments on our behalf, we would have to transition members or otherwise find alternative methods of collecting payments, which could adversely impact member acquisition and retention.
Competitors include other entertainment video providers, such as linear television, and streaming entertainment providers (including those that provide pirated content), video gaming providers, as well as user-generated content, some of which are by professional content creators, and more broadly other sources of entertainment, such as social media, that our members could choose in their moments of free time.
Competitors include other entertainment video providers, such as linear television, streaming entertainment providers (including those that provide pirated content), video gaming providers, open content platform providers, which provide access to user-generated and professionally produced content, as well as more broadly against other sources of entertainment, such as social media, that our members could choose in their moments of free time.
Acquisitions and investments may contribute to fluctuations in our quarterly financial results. These fluctuations could arise from transaction-related costs and charges associated with eliminating redundant expenses or write-offs of impaired assets recorded in connection with acquisitions and investments, and could negatively impact our financial results. We rely upon a number of partners to make our service available on their devices.
Acquisitions and investments may contribute to fluctuations in our quarterly financial results. These fluctuations could arise from transaction-related costs and charges associated with eliminating redundant expenses or write-offs of impaired assets recorded in connection with acquisitions and investments, and could negatively impact our financial results.
We currently offer members the ability to receive streaming content through a host of internet-connected devices, including TVs, digital video players, TV set-top boxes and mobile devices.
We rely upon a number of partners to make our service available on their devices. We currently offer members the ability to receive streaming content through a host of internet-connected devices, including TVs, digital video players, TV set-top boxes and mobile devices.
The market for entertainment is intensely competitive and subject to rapid change. Through new and existing distribution channels, consumers have increasing options to access entertainment video. The various economic models underlying these channels include subscription, transactional, ad-supported and piracy-based models. All of these have the potential to capture meaningful segments of the entertainment video market.
The market for entertainment video is intensely competitive and subject to rapid change. Through new and existing distribution channels, consumers have increasing options to access entertainment video. The various economic models underlying these channels include subscription, which may be bundled with other services, transactional, ad-supported and piracy-based models.
Given the dynamic nature of our business, and the inherent limitations in predicting the future, forecasts of our revenues, operating margins, net income and other financial and operating data may differ materially from actual results.
Preparing and forecasting our financial results requires us to make judgments and estimates which may differ materially from actual results. Given the dynamic nature of our business, and the inherent limitations in predicting the future, forecasts of our revenues, operating margins, net income, cash flow, and other financial and operating data may differ materially from actual results.
In addition, new technological developments, including the development and use of generative artificial intelligence, are rapidly evolving. If our competitors gain an advantage by using such technologies more effectively to satisfy consumer demand, our ability to compete successfully and our results of operations could be adversely impacted.
In addition, new technological developments, including the development and use of generative AI, are rapidly evolving. If our competitors gain an advantage by using such technologies more effectively to satisfy consumer demand, our ability to compete successfully and our results of operations could be adversely impacted. Companies also may enter into business combinations or alliances that strengthen their competitive positions.
The termination of our ability to process payments on any major payment method would significantly impair our ability to operate our business. If government regulations relating to the internet or other areas of our business change, we may need to alter the manner in which we conduct our business, or incur greater operating expenses.
If government regulations relating to the internet or other areas of our business change, we may need to alter the manner in which we conduct our business, or incur greater operating expenses.
As a result of a dispute, we may have to develop non-infringing technology, enter into royalty or licensing agreements, adjust our content, merchandising or marketing activities or take other actions to resolve the claims. These actions, if required, may be costly or unavailable on terms acceptable to us.
We may also have to remove content from our service, or remove consumer products or marketing materials from the marketplace. As a result of a dispute, we may have to develop non-infringing technology, enter into royalty or licensing agreements, adjust our content, merchandising or marketing activities or take other actions to resolve the claims.
Such actions, as well as higher costs or operating complexities in connection with these collective bargaining agreements or a significant labor dispute, could have an adverse effect on our business by causing delays in production, added costs or by reducing profit margins, and our ability to provide new content to our members could likewise be delayed or dropped. 13 Table of Contents Risks Related to Our Stock Ownership Provisions in our charter documents and under Delaware law could discourage a takeover that stockholders may consider favorable, although we have announced plans to modify some of these provisions over time.
Such actions, as well as higher costs or operating complexities in connection with these collective bargaining agreements or a significant labor dispute, could have an adverse effect on our business by causing delays in production, added costs or by reducing profit margins, and our ability to provide new content to our members could likewise be delayed or dropped.
Risks Related to Privacy Privacy concerns could limit our ability to collect and leverage member personal information and disclosure of member personal information could adversely impact our business and reputation.
The extent to which these incentives limit operator behavior differs across markets. 10 Table of Contents Risks Related to Privacy Privacy concerns could limit our ability to collect and leverage member personal information and disclosure of member personal information could adversely impact our business and reputation.
If U.S. or other tax authorities change applicable tax laws or successfully challenge how or where our profits are currently recognized, our overall taxes could increase, and our business, financial condition or results of operations may be adversely impacted.
If U.S. or other tax authorities change applicable tax laws or successfully challenge how or where our profits are currently recognized, our overall taxes could increase, and our business, financial condition or results of operations may be adversely impacted. 13 Table of Contents Risks Related to Human Resources We may lose key employees or may be unable to hire qualified employees, and the failure to maintain and improve our company culture may adversely affect our business.
If we are unable to maintain our fraud and chargeback rate at acceptable levels, card networks may 6 Table of Contents impose fines, our card approval rate may be impacted and we may be subject to additional card authentication requirements.
If we are unable to maintain our fraud and chargeback rate at acceptable levels, card networks may impose fines, our card approval rate may be impacted and we may be subject to additional card authentication requirements. The termination of our ability to process payments on any major payment method would significantly impair our ability to operate our business.
If partners or other providers do a better job of connecting consumers with content they want to watch, for example through multi-service discovery interfaces, our service may be adversely impacted. We intend to continue to broaden our relationships with existing partners and to increase our capability to stream content and offer games to other platforms and partners over time.
If partners or other providers do a better job of connecting consumers with content they want to watch, for example through multi-service discovery interfaces (including those powered by generative AI), our service may be adversely impacted.
In addition, the use or adoption of new and emerging technologies may increase our exposure to intellectual property claims, and the availability of copyright and other intellectual property protection for AI-generated material is uncertain. Many companies are devoting significant resources to developing patents that could potentially affect many aspects of our business.
In addition, the use or adoption of new and emerging technologies may increase our exposure to intellectual property claims. For example, the development and use of generative AI tools remain subject to uncertain legal frameworks, and the availability of copyright and other intellectual property protection for AI-generated material is uncertain.
If we are required to comply with new regulations or legislation or new interpretations of existing regulations or legislation, this compliance could cause us to incur additional expenses or alter our business model.
Rules governing new technological developments, including generative AI, are nascent and rapidly evolving such that the impact on areas related to our business remains uncertain. If we are required to comply with new regulations or legislation or new interpretations of existing regulations or legislation, this compliance could cause us to incur additional expenses or alter our business model.
In light of the compelling consumer proposition, piracy services are subject to rapid global growth, and our efforts to prevent that growth may be insufficient.
Piracy also threatens to damage our business, as its fundamental proposition to consumers is so compelling and difficult to compete against: virtually all content for free. In light of the compelling consumer proposition, piracy services are subject to rapid global growth, and our efforts to prevent that growth may be insufficient.
If expiring collective bargaining agreements cannot be renewed, affected unions have, and could in the future, take action in the form of strikes or work stoppages. Such work stoppages have resulted, and may in the future result, in halted productions and delays in our ability to provide new content to our members.
These and other expiring collective bargaining agreements may be renewed on terms that are unfavorable to us. Furthermore, if expiring collective bargaining agreements cannot be renewed, affected unions have, and could in the future, take action in the form of strikes or work stoppages.
We face competition from traditional providers of entertainment video, including broadcasters and cable network operators, as well as internet based e-commerce or entertainment video providers and platforms. Several of these competitors have long operating histories, large customer bases, strong brand recognition, exclusive rights to certain content, large content libraries, and significant 4 Table of Contents financial, marketing and other resources.
Several of these competitors have long operating histories, large customer bases, strong brand recognition, exclusive rights to certain content, large content libraries, and significant financial, marketing and other resources.
Likewise, if our recommendation and merchandising technology does not enable us to predict and recommend titles that our members will enjoy, our ability to attract and retain members may be adversely affected. We also utilize third-party technology to help market our service, process payments, and otherwise manage the daily operations of our business.
Likewise, if our recommendation and merchandising technology does not enable us to predict and recommend titles that our members will enjoy or our competitors' technology provides a better experience to consumers, our ability to attract and retain members may be adversely affected.
Membership growth is also impacted by seasonality, with the fourth quarter historically representing our greatest growth, as well as the timing of our content release schedules. Adverse macroeconomic conditions, including inflation, may also adversely impact our ability to attract and retain members.
Adverse macroeconomic conditions, including as a result of inflation, may also adversely impact our ability to attract and retain members.
As a result of these and other factors, investors in our common stock may not be able to resell their shares at or above their original purchase price. Following certain periods of volatility in the market price of our securities, we became the subject of securities litigation. We may experience more such litigation following future periods of volatility.
Following certain periods of volatility in the market price of our securities, we became the subject of securities litigation. We may experience more such litigation following future periods of volatility. This type of litigation may result in substantial costs and a diversion of management’s attention and resources.
Removed
We expanded our entertainment video offering to include games and, more recently, live programming.
Added
All of these have the potential to capture meaningful segments of the entertainment video market. We face competition from traditional providers of entertainment video, including broadcasters and cable network operators, as well as internet based e-commerce or entertainment video providers and platforms.
Removed
Companies also may enter into business combinations or alliances that strengthen their competitive positions. Piracy also threatens to damage our business, as its fundamental proposition to consumers is so compelling and difficult to compete against: virtually all content for free.
Added
See Risk Factors – “We have a substantial amount of indebtedness and other obligations, including streaming content obligations, which could adversely affect our financial position, and we may not be able to generate sufficient cash to service our debt and other obligations,” “The WBD transaction may not be completed on the currently contemplated timeline or terms, or at all,” and “The WBD transaction may cause our financial results to differ from expectations, we may not achieve the anticipated benefits of the WBD transaction, and the WBD transaction may disrupt our current plans or operations” for additional information.
Removed
Rules governing new technological developments, including generative artificial intelligence, are nascent and rapidly evolving such that the impact on areas related to our business remains uncertain. For example, in Europe, the Digital Markets Act remains subject to non-compliance investigations, the result of which could change how we interact with digital gatekeepers like Apple and Google.
Added
We intend to continue to broaden our relationships with existing partners and to increase our capability to stream content and offer games to other platforms and partners over time.
Removed
It also may result in our inability to use our current technology and products, our recommendation and merchandising technology or inability to market our service or merchandise our products. We may also have to remove content from our service, or remove consumer products or marketing materials from the marketplace.
Added
In certain 6 Table of Contents instances, we leverage third parties such as our cable and other partners to bill members on our behalf.
Removed
Risks Related to Human Resources We may lose key employees or may be unable to hire qualified employees, and the failure to maintain and improve our company culture may adversely affect our business.
Added
Additionally, ongoing enforcement of the Digital Markets Act in the EU and similar regulations in other territories, such as Japan, could change how we and other app developers interact with digital gatekeepers, such as Apple and Google, although we are not in scope of these regulations.
Removed
This type of litigation may result in substantial costs and a diversion of management’s attention and resources. Preparing and forecasting our financial results requires us to make judgments and estimates which may differ materially from actual results.
Added
In July 2025, in an important joint statement with the United States, the EU committed not to adopt or maintain such network usage fees, although the risk of de facto obligations remains in the EU and in certain other jurisdictions.
Added
Many companies are devoting significant resources to developing patents that could potentially affect many aspects of our business. There are numerous patents that broadly claim means and methods of conducting business on the internet. We have not searched for patents relative to our technology.
Added
These actions, if required, may be costly or unavailable on terms acceptable to us.
Added
We also utilize third-party technology to help market our service, process payments, and otherwise manage the daily operations of our business.
Added
In connection with our transaction with WBD to acquire WBD’s streaming and studios businesses, including its film and television studios, HBO Max and HBO (such transaction, the “WBD transaction”), we expect to incur and/or assume a substantial amount of additional indebtedness, which will materially increase the amount of our outstanding indebtedness and could subject us to additional risks.
Added
We have obtained commitments from financing sources to provide up to a $42.2 billion senior unsecured bridge term loan facility, and we have entered into a $5 billion senior unsecured revolving credit facility and a $20 billion senior unsecured delayed draw term loan facility.
Added
We may draw on such facilities or issue or obtain other debt financing to finance a portion of the cash consideration for the WBD transaction. In addition, upon completion of the WBD transaction, we expect to assume additional outstanding debt of WBD.
Added
The terms of the indebtedness we may incur or assume in connection with the WBD transaction could vary materially and may include secured debt and/or debt with restrictive covenants that are more burdensome than those in our existing debt arrangements.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeWe also maintain a third party security program to identify, prioritize, assess, mitigate and remediate third party risks; however, we rely on the third parties we use to implement security programs commensurate with their risk, and we cannot ensure in all circumstances that their efforts will be successful.
Biggest changeWe also maintain a third party security program to identify, prioritize, assess, mitigate and remediate third party risks; however, we rely on the third parties we use to implement security programs commensurate with their risk, and we cannot ensure in all circumstances that their efforts will be successful. 15 Table of Contents We regularly assess risks from cybersecurity and technology threats and monitor our information systems for potential vulnerabilities.
See "Risk Factors - Any significant disruption in or unauthorized access to our computer systems or those of third parties that we utilize in our operations, including those relating to cybersecurity or arising from cyber-attacks, could result in a loss or degradation of service, unauthorized access, disclosure or destruction of data, including member and corporate information, or theft of intellectual property, including digital content assets, which could adversely impact our business." The Vice President of Security and Privacy Engineering leads our global information security organization responsible for overseeing the Netflix information security program.
See “Risk Factors - Any significant disruption in or unauthorized access to our computer systems or those of third parties that we utilize in our operations, including those relating to cybersecurity or arising from cyber-attacks, could result in a loss or degradation of service, unauthorized access, disclosure or destruction of data, including member and corporate information, or theft of intellectual property, including digital content assets, which could adversely impact our business.” The Senior Director, Security, Privacy & Assurance leads our global information security organization responsible for overseeing the Netflix information security program.
However, to date these incidents have not had a material impact on our service, systems or business. Any significant disruption to our service or access to our systems could result in a loss of members and adversely affect our business and results of operation.
Generative AI could intensify these cybersecurity risks. However, to date these incidents have not had a material impact on our service, systems or business. Any significant disruption to our service or access to our systems could result in a loss of members and adversely affect our business and results of operation.
The Audit Committee of the Board oversees our cybersecurity risk and receives regular reports from our VP of Security and Privacy Engineering on various cybersecurity matters, including risk assessments, mitigation strategies, areas of emerging risks, incidents and industry trends, and other areas of importance. 15 Table of Contents
The Audit Committee of the Board oversees our cybersecurity risk and receives regular reports from our Senior Director, Security, Privacy & Assurance on various cybersecurity matters, including risk assessments, mitigation strategies, areas of emerging risks, incidents and industry trends, and other areas of importance. 16 Table of Contents
Our VP of Security and Privacy Engineering has over 30 years of industry experience, including serving in similar roles leading and overseeing cybersecurity programs at other public companies. Team members who support our information security program have relevant educational and industry experience, including holding similar positions at large technology companies.
Our Senior Director, Security, Privacy & Assurance has over 20 years of experience in information security and held senior leadership roles overseeing cybersecurity programs at other companies. Team members who support our information security program have relevant educational and industry experience, including holding similar positions at large technology companies.
We regularly assess risks from cybersecurity and technology threats and monitor our information systems for potential vulnerabilities. We use a widely-adopted risk quantification model to identify, measure and prioritize cybersecurity and technology risks and develop related security controls and safeguards.
We use a widely-adopted risk quantification model to identify, measure and prioritize cybersecurity and technology risks and develop related security controls and safeguards.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeCompany Purchases of Equity Securities Stock repurchases during the three months ended December 31, 2024 were as follows: Period Total Number of Shares Purchased (1) Average Price Paid per Share (2) Total Number of Shares Purchased as Part of Publicly Announced Programs (1) Approximate Dollar Value of Shares that May Yet Be Purchased Under the Program (1) (in thousands) October 1 - 31, 2024 519,883 $ 724.15 519,883 $ 2,678,384 November 1 - 30, 2024 457,732 $ 792.49 457,732 $ 2,315,637 December 1 - 31, 2024 188,212 $ 913.13 188,212 $ 17,143,775 Total 1,165,827 1,165,827 (1) In September 2023, the Board of Directors authorized the repurchase of up to $10 billion of its common stock, with no expiration date, and in December 2024, the Board of Directors increased the share repurchase authorization by an additional $15 billion, also with no expiration date.
Biggest changeCompany Purchases of Equity Securities Stock repurchases during the three months ended December 31, 2025 were as follows: Period Total Number of Shares Purchased (1) Average Price Paid per Share (2) Total Number of Shares Purchased as Part of Publicly Announced Programs (1) Approximate Dollar Value of Shares that May Yet Be Purchased Under the Program (1) (in thousands) October 1 - 31, 2025 5,583,110 $ 117.27 5,583,110 $ 9,471,608 November 1 - 30, 2025 9,304,465 $ 108.53 9,304,465 $ 8,461,794 December 1 - 31, 2025 3,994,670 $ 103.89 3,994,670 $ 8,046,784 Total 18,882,245 18,882,245 (1) In September 2023, the Company’s Board of Directors authorized the repurchase of up to $10 billion of its common stock, with no expiration date, and in December 2024, the Board of Directors increased the share repurchase authorization by an additional $15 billion, also with no expiration date.
(2) Average price paid per share includes costs associated with the repurchases but excludes the 1% excise tax on stock repurchases imposed by the Inflation Reduction Act of 2022. 17 Table of Contents Stock Performance Graph Notwithstanding any statement to the contrary in any of our previous or future filings with the Securities and Exchange Commission, the following information relating to the price performance of our common stock shall not be deemed “filed” with the Commission or “soliciting material” under the Exchange Act and shall not be incorporated by reference into any such filings.
(2) Average price paid per share includes costs associated with the repurchases but excludes the 1% excise tax on stock repurchases imposed by the Inflation Reduction Act of 2022. 18 Table of Contents Stock Performance Graph Notwithstanding any statement to the contrary in any of our previous or future filings with the Securities and Exchange Commission, the following information relating to the price performance of our common stock shall not be deemed “filed” with the Commission or “soliciting material” under the Exchange Act and shall not be incorporated by reference into any such filings.
Mine Safety Disclosures Not applicable. 16 Table of Contents PART II Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Information Our common stock is traded on the NASDAQ Global Select Market under the symbol “NFLX”.
Mine Safety Disclosures Not applicable. 17 Table of Contents PART II Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Information Our common stock is traded on the NASDAQ Global Select Market under the symbol “NFLX”.
The following graph compares, for the five year period ended December 31, 2024, the total cumulative stockholder return on the Company’s common stock with the total cumulative return of the NASDAQ Composite Index, the S&P 500 Index and the RDG Internet Composite Index.
The following graph compares, for the five year period ended December 31, 2025, the total cumulative stockholder return on the Company’s common stock, with the total cumulative return of the NASDAQ Composite Index, the S&P 500 Index and the RDG Internet Composite Index.
Measurement points are the last trading day of each of the Company’s fiscal years ended December 31, 2019, December 31, 2020, December 31, 2021, December 31, 2022, December 31, 2023 and December 31, 2024.
Measurement points are the last trading day of each of the Company’s fiscal years ended December 31, 2020, December 31, 2021, December 31, 2022, December 31, 2023, December 31, 2024 and December 31, 2025.
For further information regarding stock repurchase activity, see Note 9 Stockholders’ Equity to the consolidated financial statements in this Annual Report.
For further information regarding stock repurchase activity, see Note 10 Stockholders’ Equity to the consolidated financial statements in this Annual Report.
Historical stock price performance should not be relied upon as an indication of future stock price performance. Item 6. [Reserved] 18 Table of Contents
Historical stock price performance should not be relied upon as an indication of future stock price performance. Item 6. [Reserved] 19 Table of Contents
Item 3. Legal Proceedings Information with respect to this item may be found in Note 8 Commitments and Contingencies in the accompanying notes to our consolidated financial statements included in Part II, Item 8, "Financial Statements and Supplementary Data" of this Annual Report on Form 10-K, under the caption "Legal Proceedings" which information is incorporated herein by reference. Item 4.
Item 3. Legal Proceedings Information with respect to this item may be found in Note 9 Commitments and Contingencies in the accompanying notes to our consolidated financial statements included in Part II, Item 8, “Financial Statements and Supplementary Data” of this Annual Report on Form 10-K, under the caption “Legal Proceedings” which information is incorporated herein by reference. Item 4.
Holders As of December 31, 2024, there were approximately 2,752 stockholders of record of our common stock, although there is a significantly larger number of beneficial owners of our common stock. Dividend Policy We have never declared or paid any cash dividends on our capital stock, and we do not currently anticipate paying any cash dividends in the foreseeable future.
Holders As of December 31, 2025, there were approximately 3,103 stockholders of record of our common stock, although there is a significantly larger number of beneficial owners of our common stock. Dividend Policy We have never declared or paid any cash dividends on our capital stock, and we do not currently anticipate paying any cash dividends in the foreseeable future.
Added
Stock Split On November 14, 2025, the Company completed a ten-for-one forward stock split of the Company's issued common stock (the "Stock Split"). Each shareholder as of the record date of November 10, 2025 received nine additional shares of common stock for every share held.
Added
References made to share or per share amounts in the accompanying consolidated financial statements and applicable disclosures have been retroactively adjusted to reflect the Stock Split. See Note 10 Stockholders' Equity for additional information.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeClawback Policy 10-K 001-35727 97.1 January 26, 2024 101 The following financial statements from the Company's Annual Report on Form 10-K for the year ended December 31, 2024, formatted in Inline XBRL: (i) Consolidated Statements of Operations, (ii) Consolidated Statements of Comprehensive Income, (iii) Consolidated Statements of Cash Flows, (iv) Consolidated Balance Sheets, (v) Consolidated Statements of Stockholders' Equity and (vi) Notes to Consolidated Financial Statements, tagged as blocks of text and including detailed tags X 104 The cover page from the Company's Annual Report on Form 10-K for the year ended December 31, 2024, formatted in Inline XBRL X * These certifications are not deemed filed by the SEC and are not to be incorporated by reference in any filing we make under the Securities Act of 1933 or the Securities Exchange Act of 1934, irrespective of any general incorporation language in any filings. † Indicates a management contract or compensatory plan 67 Table of Contents SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Biggest changeExhibit Filing Date 101 The following financial statements from the Company's Annual Report on Form 10-K for the year ended December 31, 2025, formatted in Inline XBRL: (i) Consolidated Statements of Operations, (ii) Consolidated Statements of Comprehensive Income, (iii) Consolidated Statements of Cash Flows, (iv) Consolidated Balance Sheets, (v) Consolidated Statements of Stockholders' Equity and (vi) Notes to Consolidated Financial Statements, tagged as blocks of text and including detailed tags X 104 The cover page from the Company's Annual Report on Form 10-K for the year ended December 31, 2025, formatted in Inline XBRL X * These certifications are not deemed filed by the SEC and are not to be incorporated by reference in any filing we make under the Securities Act of 1933 or the Securities Exchange Act of 1934, irrespective of any general incorporation language in any filings. † Indicates a management contract or compensatory plan + Annexes, schedules and/or exhibits have been omitted pursuant to Item 601(a)(5) of Regulation S-K promulgated by the SEC.
Dated: January 27, 2025 By: / S / T ED S ARANDOS Ted Sarandos Co-Chief Executive Officer (principal executive officer) Dated: January 27, 2025 By: / S / G REG P ETERS Greg Peters Co-Chief Executive Officer (principal executive officer) 68 Table of Contents POWER OF ATTORNEY KNOWN ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Ted Sarandos, Greg Peters, and Spencer Neumann, and each of them, as his true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for him and in his name, place, and stead, in any and all capacities, to sign any and all amendments to this Report, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in connection therewith, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming that all said attorneys-in-fact and agents, or any of them or their or his substitute or substituted, may lawfully do or cause to be done by virtue thereof.
Dated: January 23, 2026 By: / S / T ED S ARANDOS Ted Sarandos Co-Chief Executive Officer (principal executive officer) Dated: January 23, 2026 By: / S / G REG P ETERS Greg Peters Co-Chief Executive Officer (principal executive officer) 73 Table of Contents POWER OF ATTORNEY KNOWN ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Ted Sarandos, Greg Peters, and Spencer Neumann, and each of them, as his true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for him and in his name, place, and stead, in any and all capacities, to sign any and all amendments to this Report, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in connection therewith, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming that all said attorneys-in-fact and agents, or any of them or their or his substitute or substituted, may lawfully do or cause to be done by virtue thereof.
Signature Title Date / S / T ED S ARANDOS Co-Chief Executive Officer and Director (principal executive officer) January 27, 2025 Ted Sarandos /S/ G REG P ETERS Co-Chief Executive Officer and Director (principal executive officer) January 27, 2025 Greg Peters / S / S PENCER N EUMANN Chief Financial Officer (principal financial officer) January 27, 2025 Spencer Neumann / S / J EFFREY K ARBOWSKI Chief Accounting Officer (principal accounting officer) January 27, 2025 Jeffrey Karbowski / S / R EED H ASTINGS Executive Chairman and Director January 27, 2025 Reed Hastings / S / R ICHARD B ARTON Director January 27, 2025 Richard Barton / S / M ATHIAS D ÖPFNER Director January 27, 2025 Mathias Döpfner / S / T IMOTHY M.
Signature Title Date / S / T ED S ARANDOS Co-Chief Executive Officer and Director (principal executive officer) January 23, 2026 Ted Sarandos /S/ G REG P ETERS Co-Chief Executive Officer and Director (principal executive officer) January 23, 2026 Greg Peters / S / S PENCER N EUMANN Chief Financial Officer (principal financial officer) January 23, 2026 Spencer Neumann / S / J EFFREY K ARBOWSKI Chief Accounting Officer (principal accounting officer) January 23, 2026 Jeffrey Karbowski / S / R EED H ASTINGS Chairman and Director January 23, 2026 Reed Hastings / S / R ICHARD B ARTON Director January 23, 2026 Richard Barton / S / M ATHIAS D ÖPFNER Director January 23, 2026 Mathias Döpfner / S / J AY C.
Exhibit Filing Date 10.5† Amended and Restated Performance Bonus Plan 8-K 001-35727 10.1 December 9, 2022 10.6† Form of Stock Option Agreement under the 2011 Stock Plan 10-K 001-35727 10.11 January 27, 2022 10.7† Form of Stock Option Agreement under the 2020 Stock Plan 10-K 001-35727 10.11 January 26, 2023 10.8† Form of Stock Option Agreement under the 2020 Stock Plan (Options Subject to Vesting) 8-K 001-35727 10.1 December 23, 2022 10.9† Netflix, Inc. 2020 Stock Plan Form of Restricted Stock Unit Award Agreement 8-K 001-35727 10.1 December 8, 2023 10.10† Netflix, Inc. 2020 Stock Plan Form of Performance-Based Restricted Stock Unit Award Agreement 8-K 001-35727 10.2 December 8, 2023 10.11† Netflix, Inc.
Exhibit Filing Date 10.7† Form of Stock Option Agreement under the 2020 Stock Plan 10-K 001-35727 10.11 January 26, 2023 10.8† Form of Stock Option Agreement under the 2020 Stock Plan (Options Subject to Vesting) 8-K 001-35727 10.1 December 23, 2022 10.9† Netflix, Inc. 2020 Stock Plan Form of Restricted Stock Unit Award Agreement 8-K 001-35727 10.1 December 8, 2023 10.10† Netflix, Inc. 2020 Stock Plan Form of Performance-Based Restricted Stock Unit Award Agreement 8-K 001-35727 10.2 December 8, 2023 10.11† Netflix, Inc.
Kilgore / S / S TRIVE M ASIYIWA Director January 27, 2025 Strive Masiyiwa / S / A NN M ATHER Director January 27, 2025 Ann Mather 69 Table of Contents / S / S USAN R ICE Director January 27, 2025 Susan Rice / S / B RAD S MITH Director January 27, 2025 Brad Smith /S/ A NNE S WEENEY Director January 27, 2025 Anne Sweeney 70
Kilgore / S / S TRIVE M ASIYIWA Director January 23, 2026 Strive Masiyiwa / S / A NN M ATHER Director January 23, 2026 Ann Mather / S / E LINOR M ERTZ Director January 23, 2026 Elinor Mertz 74 Table of Contents / S / S USAN R ICE Director January 23, 2026 Susan Rice / S / B RAD S MITH Director January 23, 2026 Brad Smith /S/ A NNE S WEENEY Director January 23, 2026 Anne Sweeney 75
H ALEY Director January 27, 2025 Timothy M. Haley / S / J AY C. H OAG Director January 27, 2025 Jay C. Hoag / S / L ESLIE J. K ILGORE Director January 27, 2025 Leslie J.
H OAG Director January 23, 2026 Jay C. Hoag / S / L ESLIE J. K ILGORE Director January 23, 2026 Leslie J.
Item 5.02 January 24, 2018 66 Table of Contents Exhibit Number Exhibit Description Incorporated by Reference Filed Herewith Form File No.
Clawback Policy 10-K 001-35727 97.1 January 26, 2024 71 Table of Contents Exhibit Number Exhibit Description Incorporated by Reference Filed Herewith Form File No.
Executive Officer Severance Plan 8-K 001-35727 10.3 December 8, 2023 19.1 Netflix, Inc.
Executive Officer Severance Plan 8-K 001-35727 10.3 December 8, 2023 10.12 † Netflix, Inc. Executive Officer Severance Plan, as Amended Effective as of January 1, 2026 8-K 001-35727 10.1 November 4, 2025 10.13 † Form Consent Letter to Amendment of the Netflix, Inc.
Added
Item 5.02 January 24, 2018 10.5† Amended and Restated Performance Bonus Plan 8-K 001-35727 10.1 December 9, 2022 10.6† Form of Stock Option Agreement under the 2011 Stock Plan 10-K 001-35727 10.11 January 27, 2022 70 Table of Contents Exhibit Number Exhibit Description Incorporated by Reference Filed Herewith Form File No.
Added
Executive Officer Severance Plan 8-K 001-35727 10.2 November 4, 2025 10.14 † Form of Award Amendment Consent Letter 8-K 001-35727 10.3 November 4, 2025 10.15 Commitment Letter, dated as of December 4, 2025, by and among Netflix, Inc., Wells Fargo Bank, National Association, Wells Fargo Strategic Capital, Inc., Wells Fargo Securities, LLC, BNP Paribas, BNP Paribas Securities Corp., HSBC Bank USA, National Association, HSBC Continental Europe, HSBC Bank plc, HSBC Bank Middle East Limited and HSBC Securities (USA) Inc. 8-K 001-35727 10.1 December 5, 2025 10.16 S enior Unsecured Revolving Credit Agreement, dated as of December 19, 2025, among Netflix, Inc., the lenders party thereto and Wells Fargo Bank, National Association, as the administrative agent. 8-K 001-35727 10.1 December 22, 2025 10.17 Senior Unsecured Delayed Draw Term Loan Credit Agreement, dated as of December 19, 2025, among Netflix, Inc., the lenders party thereto and Wells Fargo Bank, National Association, as the administrative agent. 8-K 001-35727 10.2 December 22, 2025 1 0.1 8 Bridge Facility Incremental Commitments Agreement, dated as of January 19, 2026, by and among Netflix, Inc., Wells Fargo Bank, National Association, Wells Fargo Securities, LLC, BNP Paribas, BNP Paribas Securities Corp., HSBC Bank plc and HSBC Securities (USA) Inc. 8-K 001-35727 10.1 January 20, 2026 19.1 Netflix, Inc.
Added
Netflix agrees to furnish supplementally a copy of any omitted annexes, schedules or exhibits to the SEC upon request. 72 Table of Contents SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Item 6. [Reserved]

Selected Financial Data — reserved (removed by SEC in 2021)

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Biggest changeItem 6. [Reserved] 18 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 19 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 27 Item 8. Financial Statements and Supplementary Data 28 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 28 Item 9A. Controls and Procedures 29 Item 9B.
Biggest changeItem 6. [Reserved] 19 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 20 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 29 Item 8. Financial Statements and Supplementary Data 30 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 30 Item 9A. Controls and Procedures 31 Item 9B.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeResults of Operations The following represents our consolidated performance highlights: As of/Year Ended December 31, Change 2024 2023 2022 2024 vs. 2023 (in thousands, except revenue per membership and percentages) Financial Results: Streaming revenues $ 39,000,966 $ 33,640,458 $ 31,469,852 16 % DVD revenues (1) — 82,839 145,698 (100) % Total revenues $ 39,000,966 $ 33,723,297 $ 31,615,550 16 % Operating income $ 10,417,614 $ 6,954,003 $ 5,632,831 50 % Operating margin 27 % 21 % 18 % Global Streaming Memberships: Paid net membership additions 41,350 29,529 8,903 40 % Paid memberships at end of period (2) 301,626 260,276 230,747 16 % Average paying memberships 277,730 240,889 222,924 15 % Average monthly revenue per paying membership $ 11.70 $ 11.64 $ 11.76 1 % Constant currency change (3) 4 % (1) We discontinued our DVD-by-mail service in the year ended December 31, 2023.
Biggest changeResults of Operations The following represents our consolidated performance highlights (1) : Year Ended December 31, Change 2025 2024 2023 2025 vs. 2024 (in thousands, except percentages) Financial Results: Streaming revenues $ 45,183,036 $ 39,000,966 $ 33,640,458 $ 6,182,070 16 % DVD revenues (2) $ — $ — $ 82,839 $ — — % Total revenues $ 45,183,036 $ 39,000,966 $ 33,723,297 $ 6,182,070 16 % Constant currency change in revenues (3) 17 % Operating income $ 13,326,603 $ 10,417,614 $ 6,954,003 $ 2,908,989 28 % Operating margin 29.5 % 26.7 % 20.6 % 2.8 % Net income $ 10,981,201 $ 8,711,631 $ 5,407,990 $ 2,269,570 26 % (1) During the year ended December 31, 2025, we discontinued the reporting of membership numbers, including average paying memberships and average monthly revenue per paying membership, focusing instead on revenue and operating margin as the primary financial metrics that we believe best represent our business performance.
Based on factors including historical and estimated viewing patterns, we amortize the content assets (licensed and produced) in “Cost of revenues” on the Consolidated Statements of Operations over the shorter of each title's contractual window of availability or estimated period of use or ten years, beginning with the month of first availability.
Based on factors including historical and estimated viewing patterns, we amortize the content assets (licensed and produced) in “Cost of revenues” on the Consolidated Statements of Operations over the shorter of each title's contractual window of availability, estimated period of use or ten years, beginning with the month of first availability.
In order to exclude the effect of foreign currency rate fluctuations on ARM, we calculate current period revenue assuming foreign exchange rates had remained constant with foreign exchange rates from each of the corresponding months of the prior-year period and exclude the impact of hedging gains or losses realized as revenues.
In order to exclude the effect of foreign currency rate fluctuations on revenue, we calculate current period revenue assuming foreign exchange rates had remained constant with foreign exchange rates from each of the corresponding months of the prior-year period and exclude the impact of hedging gains or losses realized as revenues.
Other operating costs include customer service and payment processing fees, including those we pay to our integrated payment partners, as well as other costs directly incurred in making our content available to members.
Other operating costs include customer service and payment processing fees, including those we pay to our integrated payment partners, as well as other costs incurred in making our content available to members.
The Securities and Exchange Commission ("SEC") has defined a company’s critical accounting policies as the ones that are most important to the portrayal of a company’s financial condition and results of operations, and which require a company to make its most difficult and subjective judgments. Based on this definition, we have identified the critical accounting policies and judgments addressed below.
The Securities and Exchange Commission (“SEC”) has defined a company’s critical accounting policies as the ones that are most important to the portrayal of a company’s financial condition and results of operations, and which require a company to make its most difficult and subjective judgments. Based on this definition, we have identified the critical accounting policies and judgments addressed below.
Once we know the title that we will receive and the license fees, we include the amount in the contractual obligations table above. (2) Debt obligations include our Notes consisting of principal and interest payments. See Note 6 Debt in the accompanying notes to our consolidated financial statements for further details.
Once we know the title that we will receive and the license fees, we include the amount in the contractual obligations table above. (2) Debt obligations include our Notes consisting of principal and interest payments. See Note 7 Debt in the accompanying notes to our consolidated financial statements for further details.
We expect that from time to time the prices of our membership plans in each country may change and we may test other plan and price variations. We also earn revenue from advertisements presented on our streaming service, consumer products, live events and various other sources.
We expect that from time to time the prices of our membership plans in each country may change and we may test other plan and price variations. We also earn revenue from advertisements presented on our streaming service, consumer products, live experiences and various other sources.
We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances. Actual results may differ from these estimates. Content We acquire, license and produce content, including original programming, in order to offer our members unlimited viewing of video entertainment.
We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances. Actual results may differ from these estimates. 27 Table of Contents Content We acquire, license and produce content, including original programming, in order to offer our members unlimited viewing of video entertainment.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations This section of this Form 10-K generally discusses 2024 and 2023 items and year-to-year comparisons between 2024 and 2023.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations This section of this Form 10-K generally discusses 2025 and 2024 items and year-to-year comparisons between 2025 and 2024.
In the year ended December 31, 2024, the foreign exchange losses were primarily driven by the remeasurement of cash and content liability positions in currencies other than the functional currencies, partially offset by a non-cash gain of $122 million, net of hedging impacts, from the remeasurement of our €5,170 million Senior Notes.
The foreign exchange losses in the year ended December 31, 2024 were primarily driven by the remeasurement of cash and content liability positions in currencies other than the functional currencies, partially offset by a non-cash gain of $122 million from the remeasurement of our Senior Notes denominated in Euro, net of hedging impacts.
(3) Operating lease obligations are comprised of operating lease liabilities included in "Accrued expenses and other liabilities" and "Other non-current liabilities" on the Consolidated Balance Sheets, inclusive of imputed interest. Operating lease obligations also include additional obligations that are not reflected on the Consolidated Balance Sheets as they did not meet the criteria for recognition.
(3) Operating lease obligations are comprised of operating lease liabilities included in “Accrued expenses and other liabilities” and “Other non-current liabilities” on the Consolidated Balance Sheets, inclusive of imputed interest. Operating lease obligations also include additional obligations that are not reflected on the Consolidated Balance Sheets as they did not meet the criteria for recognition.
Constant currency percentage change in ARM is calculated as the percentage change between current period constant currency ARM and the prior comparative period ARM. The impact of hedging gains or losses is excluded from both the current and prior periods.
Constant currency percentage change in revenues is calculated as the percentage change between current period constant currency revenue and the prior comparative period revenue. The impact of hedging gains or losses is excluded from both the current and prior periods.
Upon a title’s launch, any amounts we are eligible for through qualified production spend but have not received, are recognized in “Other current assets” or “Other non-current assets” on the Consolidated Balance Sheets as receivables.
Any amounts we are eligible for through qualified production spend but have not received, are recognized in “Other current assets” or “Other non-current assets” on the Consolidated Balance Sheets as receivables.
Discussions of 2022 items and year-to-year comparisons between 2023 and 2022 that are not included in this Form 10-K can be found in "Management's Discussion and Analysis of Financial Condition and Results of Operations" in Part II, Item 7 of the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2023.
Discussions of 2023 items and year-to-year comparisons between 2024 and 2023 that are not included in this Form 10-K can be found in “Management's Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2024.
If such changes are identified in the future, these aggregated content assets will be stated at the lower of unamortized cost or fair value. In addition, unamortized costs for assets that have been, or are expected to be, abandoned are written off.
To date, we have not identified any such event or changes in circumstances. If such changes are identified in the future, these aggregated content assets will be stated at the lower of unamortized cost or fair value. In addition, unamortized costs for assets that have been, or are expected to be, abandoned are written off.
Payments for content, including additions to content assets and the changes in related liabilities, are classified within "Net cash provided by operating activities" on the Consolidated Statements of Cash Flows. We recognize content assets (licensed and produced) as "Content assets, net" on the Consolidated Balance Sheets.
Payments for content, including additions to content assets and the changes in related liabilities, are classified within “Net cash provided by operating activities” on the Consolidated Statements of Cash Flows. We recognize content assets (licensed and produced) as “Content assets, net” on the Consolidated Balance Sheets.
As of December 31, 2024, pricing on our paid plans ranged from the U.S. dollar equivalent of $1 to $32 per month, and pricing on our extra member sub accounts ranged from the U.S. dollar equivalent of $2 to $8 per month.
As of December 31, 2025, pricing on our paid plans ranged from the U.S. dollar equivalent of $1 to $37 per month, and pricing on our extra member sub accounts ranged from the U.S. dollar equivalent of $2 to $9 per month.
Content assets (licensed and produced) are predominantly monetized as a group and therefore are reviewed at a group level when an event or change in circumstances indicates a change in the expected usefulness of the content or that the fair value may be less than unamortized cost. To date, we have not identified any such event or changes in circumstances.
Content assets (licensed and produced) are predominantly monetized as a group and therefore are reviewed in the aggregate at a group level when an event or change in circumstances indicates a change in the expected usefulness of the content or that the fair value may be less than unamortized cost.
As of December 31, 2024, the Company has additional operating leases for real estate that have not yet commenced of $38 million which has been included above. See Note 5 Balance Sheet Components in the accompanying notes to our consolidated financial statements for further details regarding leases.
As of December 31, 2025, the Company has additional operating leases for real estate that have not yet commenced which has been included above. The lease obligations associated with these leases were not material. See Note 5 Balance Sheet Components in the accompanying notes to our consolidated financial statements for further details regarding leases.
For licensed content, we capitalize the fee per title and record a corresponding liability at the gross amount of the liability when the license period begins, the cost of the title is known and the title is accepted and available for streaming. For produced content, we capitalize costs associated with the production, including development costs, direct costs and production overhead.
For licensed content, we capitalize the fee per title and record a corresponding liability at the gross amount of the liability when the license period begins, the cost of the title is known and the title is accepted and available for streaming.
Sales and Marketing Sales and marketing expenses consist primarily of advertising expenses and certain payments made to marketing and advertising sales partners, including consumer electronics ("CE") manufacturers, multichannel video programming distributors ("MVPDs"), mobile operators, and ISPs. Marketing expenses include promotional activities such as digital and television advertising.
Sales and Marketing Sales and marketing expenses consist primarily of expenses for promotional activities such as digital and television advertising, and certain payments made to marketing and advertising sales partners. Our marketing partners include consumer electronics (“CE”) manufacturers, multichannel video programming distributors (“MVPDs”), mobile operators, and ISPs. Our advertising sales partners include advertising technology providers and advertising agencies.
Technology and Development Technology and development expenses consist primarily of payroll, stock-based compensation, facilities, and other related expenses for technology personnel responsible for making improvements to our service offerings, including testing, maintaining and modifying our user interface, our recommendations, merchandising and infrastructure. Technology and development expenses also include costs associated with general use computer hardware and software.
Technology and Development Technology and development expenses consist primarily of payroll, stock-based compensation, facilities, and other related expenses for technology personnel responsible for making improvements to our service offerings, including testing, maintaining and modifying our user interface, our recommendations and infrastructure.
Year Ended December 31, Change 2024 2023 2022 2024 vs. 2023 (in thousands, except percentages) Interest and other income (expense) $ 266,776 $ (48,772) $ 337,310 $ 315,548 647 % As a percentage of revenues 1 % — % 1 % Interest and other income (expense) increased for the year ended December 31, 2024 primarily due to foreign exchange losses of $18 million, net of the impacts of derivatives and hedging, compared to the losses of $293 million for the corresponding period in 2023.
Year Ended December 31, Change 2025 2024 2023 2025 vs. 2024 (in thousands, except percentages) Interest and other income (expense) $ 172,459 $ 266,776 $ (48,772) $ (94,317) (35) % As a percentage of revenues — % 1 % — % Interest and other income (expense) decreased for the year ended December 31, 2025, primarily due to foreign exchange losses of $123 million, net of the impacts of derivatives and hedging, compared to losses of $18 million for the corresponding period in 2024.
Recent Accounting Pronouncements The information set forth under Note 1 to the consolidated financial statements under the caption “Basis of Presentation and Summary of Significant Accounting Policies” is incorporated herein by reference.
See Note 11 Income Taxes to the consolidated financial statements for further information regarding income taxes. 28 Table of Contents Recent Accounting Pronouncements The information set forth under Note 1 to the consolidated financial statements under the caption “Basis of Presentation and Summary of Significant Accounting Policies” is incorporated herein by reference.
In the fiscal year ended December 31, 2024, the Company repurchased 9,861,935 shares of common stock for an aggregate amount of $6,211 million (excluding the 1% excise tax on stock repurchases as a result of the Inflation Reduction Act of 2022). As of December 31, 2024, $17.1 billion remains available for repurchases.
In the fiscal year ended December 31, 2025, the Company repurchased 86,536,215 shares of common stock for an aggregate amount of $9.1 billion (excluding the 1% excise tax on stock repurchases as a result of the Inflation Reduction Act of 2022). As of December 31, 2025, $8.0 billion remains available for repurchases.
Our primary uses of cash include the acquisition, licensing and production of content, marketing programs, streaming delivery and personnel-related costs, as well as strategic acquisitions and investments. Cash payment terms for non-original content have historically been in line with the amortization period.
See Note 7 Debt in the accompanying notes to our consolidated financial statements. Uses of Cash Our primary uses of cash include the acquisition, licensing and production of content, marketing programs, streaming delivery, and personnel-related costs. Cash payment terms for non-original content have historically been in line with the amortization period.
The foreign exchange loss in the year ended December 31, 2023 was primarily driven by a non-cash loss of $176 million from the remeasurement of our Senior Notes denominated in euros, coupled with the remeasurement of cash and content liability positions in currencies other than the functional currencies.
In the year 23 Table of Contents ended December 31, 2025, the foreign exchange losses were primarily driven by the non-cash loss of $72 million from the remeasurement of our Senior Notes denominated in Euro, net of hedging impacts, coupled with the remeasurement of cash and content liability positions in currencies other than the functional currencies.
Due to uncertainties in any tax audit outcome, our estimates of the ultimate settlement of our unrecognized tax positions may change and the actual tax benefits may differ significantly from the estimates. See Note 10 Income Taxes to the consolidated financial statements for further information regarding income taxes.
Due to uncertainties in any tax audit outcome, our estimates of the ultimate settlement of our unrecognized tax positions may change and the actual tax benefits may differ significantly from the estimates.
See Note 10 Income Taxes to the consolidated financial statements for further information regarding income taxes. 23 Table of Contents Liquidity and Capital Resources As of December 31, Change 2024 2023 2024 vs. 2023 (in thousands, except percentages) Cash, cash equivalents, restricted cash and short-term investments $ 9,586,343 $ 7,139,488 $ 2,446,855 34 % Short-term and long-term debt 15,582,804 14,543,261 1,039,543 7 % Cash, cash equivalents, restricted cash and short-term investments increased $2,447 million in the year ended December 31, 2024 primarily due to cash provided by operations, issuance of debt, and proceeds from issuance of common stock, partially offset by the repurchase of stock and repayment of debt.
See Note 11 Income Taxes to the consolidated financial statements for further information regarding income taxes. 24 Table of Contents Liquidity and Capital Resources As of December 31, Change 2025 2024 2025 vs. 2024 (in thousands, except percentages) Cash, cash equivalents, restricted cash and short-term investments $ 9,067,872 $ 9,586,343 $ (518,471) (5) % Short-term and long-term debt 14,462,836 15,582,804 (1,119,968) (7) % Cash, cash equivalents, restricted cash and short-term investments decreased $518 million in the year ended December 31, 2025 primarily due to the repurchase of stock and repayment of debt, partially offset by cash provided by operations.
Content obligations include amounts related to the acquisition, licensing and production of content. An obligation for the production of content includes non-cancelable commitments under creative talent and employment agreements and other production related 24 Table of Contents commitments.
Content obligations include amounts related to the acquisition, licensing and production of content. An obligation for the production of content includes non-cancelable commitments under creative talent and employment agreements and other production related commitments. An obligation for the acquisition and licensing of content is incurred at the time we enter into an agreement to obtain future titles.
Interest and Other Income (Expense) Interest and other income (expense) consists primarily of foreign exchange gains and losses on foreign currency denominated balances, gains and losses on certain derivative instruments, and interest earned on cash, cash equivalents and short-term investments.
See Note 7 Debt for additional details regarding the financing arrangements associated with the WBD transaction. Interest and Other Income (Expense) Interest and other income (expense) consists primarily of foreign exchange gains and losses on foreign currency denominated balances, gains and losses on certain derivative instruments, and interest earned on cash, cash equivalents and short-term investments.
Actual operating results in future years could differ from our current assumptions, judgments and estimates. 26 Table of Contents We do not recognize certain tax benefits from uncertain tax positions within the provision for income taxes.
The assumptions utilized in determining future taxable income require significant judgment and are consistent with the plans and estimates we are using to manage the underlying business. Actual operating results in future years could differ from our current assumptions, judgments and estimates. We do not recognize certain tax benefits from uncertain tax positions within the provision for income taxes.
We expect to continue to significantly invest in global content, particularly in original content, which will impact our liquidity. We currently anticipate that cash flows from operations, available funds and access to financing sources, including our revolving credit facility, will continue to be sufficient to meet our cash needs for the next twelve months and beyond.
Material Cash Requirements We currently anticipate that cash flows from operations, available funds and access to financing sources, including under our Revolving Credit Facility, Commercial Paper Program, the Bridge Facility Commitments and the Transaction Credit Facilities, will continue to be sufficient to meet our cash needs for the next twelve months and beyond.
Cash Flows The following table summarizes our cash flows: Year Ended December 31, Change 2024 2023 2022 2024 vs. 2023 (in thousands) Net cash provided by operating activities $ 7,361,364 $ 7,274,301 $ 2,026,257 $ 87,063 1 % Net cash provided by (used in) investing activities (2,181,784) 541,751 (2,076,392) (2,723,535) (503) % Net cash used in financing activities (4,074,427) (5,950,803) (664,254) (1,876,376) (32) % Net cash provided by operating activities for the year ended December 31, 2024 increased $87 million as compared to the year ended December 31, 2023, primarily driven by a $3,304 million or 61% increase in net income, an increase in adjustments for non-cash expenses, and favorable changes in working capital, partially offset by an increase in payments for content assets.
Cash Flows The following table summarizes our cash flows: Year Ended December 31, Change 2025 2024 2023 2025 vs. 2024 (in thousands) Net cash provided by operating activities $ 10,149,273 $ 7,361,364 $ 7,274,301 $ 2,787,909 38 % Net cash provided by (used in) investing activities 1,041,688 (2,181,784) 541,751 3,223,472 148 % Net cash used in financing activities (10,345,623) (4,074,427) (5,950,803) 6,271,196 154 % Net cash provided by operating activities for the year ended December 31, 2025 increased $2,788 million as compared to the year ended December 31, 2024, primarily driven by a $2,270 million or 26% increase in net income and a $1,646 million increase in adjustments for non-cash expenses, partially offset by a $705 million increase in payments for content assets and $423 million in unfavorable changes in working capital.
Year Ended December 31, Change 2024 2023 2022 2024 vs. 2023 (in thousands, except percentages) Technology and development $ 2,925,295 $ 2,675,758 $ 2,711,041 $ 249,537 9 % As a percentage of revenues 8 % 8 % 9 % The increase in technology and development expenses for the year ended December 31, 2024 as compared to the year ended December 31, 2023 was primarily due to a $224 million increase in personnel-related costs.
Technology and development expenses also include costs associated with general use computer hardware and software. 22 Table of Contents Year Ended December 31, Change 2025 2024 2023 2025 vs. 2024 (in thousands, except percentages) Technology and development $ 3,391,390 $ 2,925,295 $ 2,675,758 $ 466,095 16 % As a percentage of revenues 8 % 8 % 8 % The increase in technology and development expenses for the year ended December 31, 2025 as compared to the year ended December 31, 2024 was primarily due to a $438 million increase in personnel-related costs.
Sales and marketing expenses also include payroll, stock-based compensation, facilities, and other related expenses for personnel that support advertising sales and marketing activities. 21 Table of Contents Year Ended December 31, Change 2024 2023 2022 2024 vs. 2023 (in thousands, except percentages) Sales and marketing $ 2,917,554 $ 2,657,883 $ 2,530,502 $ 259,671 10 % As a percentage of revenues 7 % 8 % 8 % The increase in sales and marketing expenses for the year ended December 31, 2024 as compared to the year ended December 31, 2023 was primarily driven by a $131 million increase in personnel-related costs due to the growth in advertising sales headcount.
Year Ended December 31, Change 2025 2024 2023 2025 vs. 2024 (in thousands, except percentages) Sales and marketing $ 3,301,306 $ 2,917,554 $ 2,657,883 $ 383,752 13 % As a percentage of revenues 7 % 7 % 8 % The increase in sales and marketing expenses for the year ended December 31, 2025 as compared to the year ended December 31, 2024 was primarily driven by a $222 million increase in marketing expenses, coupled with a $149 million increase in personnel-related costs due to the growth in advertising sales headcount.
Year Ended December 31, Change 2024 2023 2022 2024 vs. 2023 (in thousands, except percentages) Cost of revenues $ 21,038,464 $ 19,715,368 $ 19,168,285 $ 1,323,096 7 % As a percentage of revenues 54 % 58 % 61 % The increase in cost of revenues for the year ended December 31, 2024 as compared to the year ended December 31, 2023 was due to a $1,104 million increase in content amortization relating to our existing and new content.
Year Ended December 31, Change 2025 2024 2023 2025 vs. 2024 (in thousands, except percentages) Cost of revenues $ 23,275,329 $ 21,038,464 $ 19,715,368 $ 2,236,865 11 % As a percentage of revenues 52 % 54 % 58 % The increase in cost of revenues for the year ended December 31, 2025 as compared to the year ended December 31, 2024 was primarily due to a $1,121 million increase in content amortization relating to our existing and new content, coupled with a $1,116 million increase in other cost of revenues, primarily driven by non-income tax assessments in Brazil.
The contractual obligations table above does not include any estimated obligation for the unknown future titles, payment for which could range from less than one year to more than five years.
Traditional film output deals, or certain TV series license agreements where the number of seasons to be aired is unknown, are examples of these types of agreements. The contractual obligations table above does not include any estimated obligation for the unknown future titles, payment for which could range from less than one year to more than five years.
In September 2023, the Board of Directors authorized the repurchase of up to $10 billion of our common stock, with no expiration date, and in December 2024, the Board of Directors increased the share repurchase authorization by an additional $15 billion, also with no expiration date.
If we raise additional funds through the issuance of equity or debt securities, those securities may have rights, preferences or privileges senior to the rights of our common stock, and our stockholders may experience dilution. 25 Table of Contents Share Repurchases In September 2023, the Board of Directors authorized the repurchase of up to $10 billion of our common stock, with no expiration date, and in December 2024, the Board of Directors increased the share repurchase authorization by an additional $15 billion, also with no expiration date.
Year Ended December 31, Change 2024 2023 2022 2024 vs. 2023 (in thousands, except percentages) General and administrative $ 1,702,039 $ 1,720,285 $ 1,572,891 $ (18,246) (1) % As a percentage of revenues 4 % 5 % 5 % General and administrative expenses for the year ended December 31, 2024 as compared to the year ended December 31, 2023 remained relatively flat.
Year Ended December 31, Change 2025 2024 2023 2025 vs. 2024 (in thousands, except percentages) General and administrative $ 1,888,408 $ 1,702,039 $ 1,720,285 $ 186,369 11 % As a percentage of revenues 4 % 4 % 5 % The increase in general and administrative expenses for the year ended December 31, 2025 as compared to the year ended December 31, 2024 was primarily due to a $92 million increase in personnel-related costs and a $64 million increase in third-party expenses.
Indemnifications The information set forth under Note 8 Commitments and Contingencies in the accompanying notes to our consolidated financial statements included in Part II, Item 8, "Financial Statements and Supplementary Data" of this Annual Report on Form 10-K is incorporated herein by reference. 25 Table of Contents Critical Accounting Estimates The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosures of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reported periods.
Critical Accounting Estimates The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosures of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reported periods.
See Note 6 Debt in the accompanying notes to our consolidated financial statements for further detail on our debt obligations. 22 Table of Contents Year Ended December 31, Change 2024 2023 2022 2024 vs. 2023 (in thousands, except percentages) Interest expense $ 718,733 $ 699,826 $ 706,212 $ 18,907 3 % As a percentage of revenues 2 % 2 % 2 % Interest expense primarily consists of interest on our Notes of $718 million for the year ended December 31, 2024.
Year Ended December 31, Change 2025 2024 2023 2025 vs. 2024 (in thousands, except percentages) Interest expense $ 776,510 $ 718,733 $ 699,826 $ 57,777 8 % As a percentage of revenues 2 % 2 % 2 % Interest expense primarily consists of interest on our Notes of $716 million for the year ended December 31, 2025.
See Note 7 Derivative Financial Instruments and Hedging Activities to the consolidated financial statements for further information regarding the Company’s derivative and non-derivative financial instruments.
No hedging gains and losses were recognized in total streaming revenues for the year ended December 31, 2023. See Note 8 Derivative Financial Instruments and Hedging Activities to the consolidated financial statements for further information regarding the Company’s derivative and non-derivative financial instruments.
(3) We believe the non-GAAP financial measure of constant currency revenue is useful in analyzing the underlying trends in average monthly revenue per paying membership (“ARM”) absent foreign currency fluctuations. However, this non-GAAP financial measure should be considered in addition to, not as a substitute for, or superior to other financial measures prepared in accordance with GAAP.
However, this non-GAAP financial measure should be considered in addition to, not as a substitute for, or superior to other financial measures prepared in accordance with GAAP.
As of December 31, 2024, we had gross unrecognized tax benefits of $432 million, of which $302 million was classified in “Other non-current liabilities" in the Consolidated Balance Sheets. At this time, an estimate of the range of reasonably possible adjustments to the balance of unrecognized tax benefits cannot be made.
As of December 31, 2025, we had gross unrecognized tax benefits of $566 million, of which $409 million was classified in “Other non-current liabilities” in the Consolidated Balance Sheets.
Certain agreements include the obligation to license rights for unknown future titles, the ultimate quantity and/or fees for which are not yet determinable as of the reporting date. Traditional film output deals, or certain TV series license agreements where the number of seasons to be aired is unknown, are examples of these types of agreements.
Once a title becomes available, a content liability is recorded on the Consolidated Balance Sheets. Certain agreements include the obligation to license rights for unknown future titles, the ultimate quantity and/or fees for which are not yet determinable as of the reporting date.
Debt, net of debt issuance costs and discounts, increased $1,040 million primarily due to the issuance of $1,800 million in additional Senior Notes, partially offset by the repayment upon maturity of the $400 million aggregate principal amount of our 5.750% Senior Notes and the remeasurement of our euro-denominated notes in the year ended December 31, 2024.
Debt, net of debt issuance costs and discounts, decreased $1,120 million primarily due to approximately $1,833 million in repayments of debt, partially offset by the remeasurement of our Euro-denominated notes in the year ended December 31, 2025. The amount of principal and interest on our outstanding notes due in the next twelve months is $1,690 million.
Net cash provided by (used in) investing activities for the year ended December 31, 2024 decreased $2,724 million as compared to the year ended December 31, 2023, primarily due to there being no maturities of investments in the year ended December 31, 2024, as compared to maturities of investments of $1,395 million in the year ended December 31, 2023, coupled with an increase in purchases of investments of $1,237 million and an increase in purchases of property and equipment of $91 million.
Net cash provided by (used in) investing activities for the year ended December 31, 2025 increased $3,223 million as compared to the year ended December 31, 2024, primarily due to net cash inflows of $1,747 million from maturities, sales and purchases of investments in the year ended December 31, 2025 as compared to cash outflows of $1,742 million from purchases of investments in the corresponding period in 2024, partially offset by a $249 million increase in purchases of property and equipment.
Net cash used in financing activities for the year ended December 31, 2024 decreased $1,876 million as compared to the year ended December 31, 2023, primarily due to proceeds from the issuance of debt of $1,794 million in the year ended December 31, 2024 and a $663 million increase in the proceeds from the issuance of common stock.
The increase in financing cash outflows was primarily driven by no proceeds from the issuance of debt in the year ended December 31, 2025, as compared to proceeds from the issuance of debt of $1,794 million, in the corresponding period in 2024, coupled with a $1,433 million increase in repayments of debt.
Year Ended December 31, Change 2024 2023 2022 2024 vs. 2023 (in thousands, except percentages) Streaming revenues $ 39,000,966 $ 33,640,458 $ 31,469,852 $ 5,360,508 16 % Streaming revenues for the year ended December 31, 2024 increased 16% as compared to the year ended December 31, 2023, primarily due to the growth in average paying memberships and price increases, partially offset by unfavorable changes in foreign exchange rates.
Revenues earned from sources other than monthly membership fees were not a material component of revenues for the years ended December 31, 2025, 2024, and 2023. 20 Table of Contents Year Ended December 31, Change 2025 2024 2023 2025 vs. 2024 (in thousands, except percentages) Revenues $ 45,183,036 $ 39,000,966 $ 33,723,297 $ 6,182,070 16 % Revenues for the year ended December 31, 2025 increased 16% as compared to the year ended December 31, 2024, primarily due to the growth in memberships, price increases, and increased advertising revenue, partially offset by unfavorable changes in foreign exchange rates, net of hedging.
Operating margin for the year ended December 31, 2024 increased six percentage points as compared to the prior comparative period, primarily due to revenues growing at a faster rate as compared to the growth in cost of revenues, sales and marketing, and technology and development expenses, coupled with lower general and administrative expenses. 19 Table of Contents Streaming Revenues We primarily derive revenues from monthly membership fees for services related to streaming content to our members.
Operating margin for the year ended December 31, 2025 increased by approximately three percentage points as compared to the prior comparative period, primarily driven by the growth in revenues outpacing the growth in cost of revenues, sales and marketing, and general and administrative expenses.
The following tables summarize streaming revenues and other streaming membership information by region for the years ended December 31, 2024, 2023 and 2022. Hedging gains of $124 million are included in “Streaming revenues” for the year ended December 31, 2024. No hedging gains and losses were recognized as “Streaming revenues” in the comparative prior year periods.
The following table summarizes streaming revenues by region for the years ended December 31, 2025, 2024 and 2023. Total streaming revenues are inclusive of hedging gains (losses) of $(91) million and $124 million for the years ended December 31, 2025 and 2024, respectively.
As of December 31, 2024, the expected timing of those payments are as follows: Contractual obligations (in thousands): Total Next 12 Months Beyond 12 Months Content obligations (1) $ 23,248,931 $ 11,424,696 $ 11,824,235 Debt (2) 19,841,462 2,486,945 17,354,517 Operating lease obligations (3) 2,761,120 514,625 2,246,495 Total $ 45,851,513 $ 14,426,266 $ 31,425,247 (1) As of December 31, 2024, content obligations were comprised of $4.4 billion included in "Current content liabilities" and $1.8 billion of "Non-current content liabilities" on the Consolidated Balance Sheets and $17.0 billion of obligations that are not reflected on the Consolidated Balance Sheets as they did not then meet the criteria for recognition.
As of December 31, 2025, the expected timing of those payments are as follows: Contractual obligations (in thousands): Total Next 12 Months Beyond 12 Months Content obligations (1) $ 24,039,228 $ 11,528,030 $ 12,511,198 Debt (2) 18,091,887 1,690,445 16,401,442 Operating lease obligations (3) 2,898,017 558,051 2,339,966 Total $ 45,029,132 $ 13,776,526 $ 31,252,606 (1) As of December 31, 2025, content obligations were comprised of $4.1 billion included in “Current content liabilities” and $1.6 billion of “Non-current content liabilities” on the Consolidated Balance Sheets and $18.4 billion of obligations that are not reflected on the Consolidated Balance Sheets as they did not then meet the criteria for recognition.
Provision for Income Taxes Year Ended December 31, Change 2024 2023 2022 2024 vs. 2023 (in thousands, except percentages) Provision for income taxes $ 1,254,026 $ 797,415 $ 772,005 $ 456,611 57 % Effective tax rate 13 % 13 % 15 % The effective tax rate for the year ended December 31, 2024 remained relatively flat as compared to the year ended December 31, 2023.
Provision for Income Taxes Year Ended December 31, Change 2025 2024 2023 2025 vs. 2024 (in thousands, except percentages) Provision for income taxes $ 1,741,351 $ 1,254,026 $ 797,415 $ 487,325 39 % Effective tax rate 14 % 13 % 13 % The increase in our effective tax rate for the year ended December 31, 2025, as compared to the year ended December 31, 2024, is primarily due to a decrease in tax benefits associated with federal research and development tax credits as well as the growth in income before taxes exceeding the growth in excess tax benefits from stock-based compensation.
Interest Expense Interest expense consists primarily of the interest associated with our outstanding debt obligations, including the amortization of debt issuance costs.
The increase in personnel-related costs was primarily driven by higher share-based compensation expense, while the increase in third-party expenses was attributable to higher legal fees and transaction-related costs, including those associated with the WBD transaction. Interest Expense Interest expense consists primarily of the interest associated with our outstanding debt obligations and the amortization of debt issuance costs.
The increase in interest expense for the year ended December 31, 2024 as compared to the year ended December 31, 2023 was due to the increase in debt.
The increase in interest expense for the year ended December 31, 2025 as compared to the year ended December 31, 2024 was primarily driven by higher amortization of debt issuance costs, including approximately $60 million related to financing arrangements entered into in connection with the WBD transaction.
We may not be able to obtain such financing on terms acceptable to us or at all. If we raise additional funds through the issuance of equity or debt securities, those securities may have rights, preferences or privileges senior to the rights of our common stock, and our stockholders may experience dilution.
We may not be able to obtain such financing on terms acceptable to us or at all.
We offer a variety of streaming membership plans, the price of which varies by country and the features of the plan.
The impact of higher operating income was partially offset by a $487 million increase in the provision for income taxes. Revenues We primarily derive revenues from monthly membership fees for services related to streaming content to our members. We offer a variety of streaming membership plans, the price of which varies by country and the features of the plan.
The discontinuance of our DVD business had an immaterial impact on our operations and financial results.
(2) We discontinued our DVD-by-mail service in the year ended December 31, 2023. The discontinuance of our DVD business had an immaterial impact on our operations and financial results. (3) See the “ Non-GAAP Constant Currency Information” section below for additional details on our use of constant currency revenue.
Removed
(2) A paid membership (also referred to as a paid subscription) is defined as a membership that has the right to receive Netflix service following sign-up and a method of payment being provided, and that is not part of a free trial or certain other promotions that may be offered by the Company to new or rejoining members.
Added
Net income for the year ended December 31, 2025 increased $2,270 million as compared to the prior comparative period, primarily due to a $2,909 million increase in operating income, driven by a $6,182 million increase in revenues and partially offset by a $2,237 million increase in cost of revenues primarily due to the increase in content amortization and other cost of revenues.
Removed
Certain members have the option to add extra member sub accounts. These extra member sub accounts are not included in paid memberships. A membership is canceled and ceases to be reflected in the above metrics as of the effective cancellation date. Voluntary cancellations generally become effective at the end of the prepaid membership period.
Added
Year Ended December 31, Change 2025 2024 2023 2025 vs. 2024 (in thousands, except revenue per membership and percentages) United States and Canada (UCAN) $ 19,957,152 $ 17,359,369 $ 14,873,783 $ 2,597,783 15 % Europe, Middle East, and Africa (EMEA) 14,514,646 12,387,035 10,556,487 2,127,611 17 % Latin America (LATAM) 5,357,521 4,839,816 4,446,461 517,705 11 % Asia-Pacific (APAC) 5,353,717 4,414,746 3,763,727 938,971 21 % Total Streaming Revenues $ 45,183,036 $ 39,000,966 $ 33,640,458 $ 6,182,070 16 % Non-GAAP Constant Currency Information We believe the non-GAAP financial measure of constant currency revenue is useful in analyzing period-to-period comparisons in revenues absent foreign currency fluctuations.
Removed
Involuntary cancellations, as a result of a failed method of payment, become effective immediately. Memberships are assigned to territories based on the geographic location used at time of sign-up as determined by the Company’s internal systems, which utilize industry standard geo-location technology.
Added
The table below summarizes constant currency streaming revenues by region for the year ended December 31, 2025 and the constant currency percentage change in streaming revenues by region for the year ended December 31, 2025 as compared to the year ended December 31, 2024: Year Ended December 31, Change 2025 2024 2025 vs. 2024 As Reported Constant Currency Adjustment Hedging (Gains) Losses Included in Revenues Constant Currency Revenues As Reported Hedging (Gains) Losses Included in Revenues Revenues Less Hedging Impact Reported Change Constant Currency Change (in thousands, except percentages) UCAN $ 19,957,152 $ 36,991 $ (29,791) $ 19,964,352 $ 17,359,369 $ (11,181) $ 17,348,188 15 % 15 % EMEA 14,514,646 (374,174) 137,768 14,278,240 12,387,035 (25,303) 12,361,732 17 % 16 % LATAM 5,357,521 457,000 54,108 5,868,629 4,839,816 (58,454) 4,781,362 11 % 23 % APAC 5,353,717 59,740 (70,942) 5,342,515 4,414,746 (29,073) 4,385,673 21 % 22 % Total Streaming Revenues $ 45,183,036 $ 179,557 $ 91,143 $ 45,453,736 $ 39,000,966 $ (124,011) $ 38,876,955 16 % 17 % 21 Table of Contents Cost of Revenues Cost of revenues primarily consists of the amortization of content assets.
Removed
For the year ended December 31, 2024, our revenues would have been approximately $1,424 million higher, excluding the impact of hedging and had foreign currency exchange rates remained constant with those for the year ended December 31, 2023.
Added
We do not expect that non-income taxes incurred in Brazil will materially impact our results of operations in future periods. See Note 9 Commitments and Contingencies in the accompanying notes to our consolidated financial statements for further detail on our non-income tax matters.
Removed
The unfavorable foreign exchange rate impacts in the year ended December 31, 2024 were primarily driven by the devaluation of the Argentine peso relative to the U.S. dollar coupled with significant price increases in the local currency in this jurisdiction.
Added
Sales and marketing expenses also include payroll, stock-based compensation, facilities, and other related expenses for personnel that support advertising sales and marketing activities.
Removed
Revenues earned from sources other than monthly membership fees were not a material component of streaming revenues for the years ended December 31, 2024, 2023, and 2022.
Added
See Note 7 Debt in the accompanying notes to our consolidated financial statements for further detail on our debt obligations.
Removed
United States and Canada (UCAN) As of/Year Ended December 31, Change 2024 2023 2022 2024 vs. 2023 (in thousands, except revenue per membership and percentages) Streaming revenues $ 17,359,369 $ 14,873,783 $ 14,084,643 $ 2,485,586 17 % Paid net membership additions (losses) 9,497 5,832 (919) 3,665 63 % Paid memberships at end of period 89,625 80,128 74,296 9,497 12 % Average paying memberships 84,112 76,126 74,001 7,986 10 % Average monthly revenue per paying membership $ 17.20 $ 16.28 $ 15.86 $ 0.92 6 % Constant currency change 6 % Europe, Middle East, and Africa (EMEA) As of/Year Ended December 31, Change 2024 2023 2022 2024 vs. 2023 (in thousands, except revenue per membership and percentages) Streaming revenues $ 12,387,035 $ 10,556,487 $ 9,745,015 $ 1,830,548 17 % Paid net membership additions 12,320 12,084 2,693 236 2 % Paid memberships at end of period 101,133 88,813 76,729 12,320 14 % Average paying memberships 94,200 80,928 73,904 13,272 16 % Average monthly revenue per paying membership $ 10.96 $ 10.87 $ 10.99 $ 0.09 1 % Constant currency change 1 % 20 Table of Contents Latin America (LATAM) As of/Year Ended December 31, Change 2024 2023 2022 2024 vs. 2023 (in thousands, except revenue per membership and percentages) Streaming revenues $ 4,839,816 $ 4,446,461 $ 4,069,973 $ 393,355 9 % Paid net membership additions 7,330 4,298 1,738 3,032 71 % Paid memberships at end of period 53,327 45,997 41,699 7,330 16 % Average paying memberships 48,954 42,802 40,000 6,152 14 % Average monthly revenue per paying membership $ 8.24 $ 8.66 $ 8.48 $ (0.42) (5) % Constant currency change 21 % Asia-Pacific (APAC) As of/Year Ended December 31, Change 2024 2023 2022 2024 vs. 2023 (in thousands, except revenue per membership and percentages) Streaming revenues $ 4,414,746 $ 3,763,727 $ 3,570,221 $ 651,019 17 % Paid net membership additions 12,203 7,315 5,391 4,888 67 % Paid memberships at end of period 57,541 45,338 38,023 12,203 27 % Average paying memberships 50,466 41,033 35,019 9,433 23 % Average monthly revenue per paying membership $ 7.29 $ 7.64 $ 8.50 $ (0.35) (5) % Constant currency change (3) % Cost of Revenues Cost of revenues primarily consists of the amortization of content assets.
Added
We expect to continue to significantly invest in global content, particularly in original content, which will impact our liquidity. Our other uses of cash include strategic acquisitions and investments, as well as share repurchases. See the “ Material Cash Requirements ” section below for further detail on our expected use of cash in connection with the WBD transaction.
Removed
Other sales and marketing expenses increased $129 million primarily due to a $54 million increase in marketing expenses due to the timing of marketing spend on our content slate, coupled with an increase in expenses incurred in connection with our advertising offering, including increased payments to advertising sales partners and other advertising distribution expenses.
Added
Financing Arrangements On April 12, 2024, we entered into a five-year, $3 billion unsecured revolving credit facility that matures on April 12, 2029 (the “Revolving Credit Agreement”). In May 2025, we established a $3 billion commercial paper program (the “Commercial Paper Program”) under which we may issue short-term unsecured commercial paper notes.
Removed
The amount of principal and interest due in the next twelve months is $2,487 million. As of December 31, 2024, no amounts had been borrowed under our $3 billion Revolving Credit Agreement. See Note 6 Debt in the accompanying notes to our consolidated financial statements. We anticipate that we may periodically raise additional debt capital.
Added
On December 4, 2025, we entered into a bridge commitment letter pursuant to which the commitment parties agreed to provide, subject to customary conditions, a $59 billion senior unsecured bridge term loan facility to finance the purchase price for the WBD transaction, to pay fees, costs and expenses incurred in connection with the WBD transaction and, at our option, to refinance certain indebtedness (the “Bridge Facility Commitments”).
Removed
An obligation for the acquisition and licensing of content is incurred at the time we enter into an agreement to obtain future titles. Once a title becomes available, a content liability is recorded on the Consolidated Balance Sheets.
Added
On December 19, 2025, we replaced a portion of the Bridge Facility Commitments with a $5 billion unsecured revolving credit facility and a $20 billion unsecured delayed draw term loan facility (collectively, the “Transaction Credit Facilities”), which reduced the outstanding Bridge Facility Commitments to $34 billion.
Removed
In addition, we may be required to pay deposits of approximately $800 million related to certain direct and indirect taxes in the next twelve months, which are in excess of our typical annual obligations.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

14 edited+1 added−5 removed6 unchanged
Biggest changeWe also designate certain contracts as fair value hedges to mitigate the foreign exchange risk on the remeasurement of our foreign-currency denominated debt. The gains or losses on these derivative instruments included in the assessment of hedge effectiveness are recorded in “Interest and other income (expense),” net with the offsetting foreign currency remeasurement gains and losses on the hedged items.
Biggest changeCertain contracts are not designated as hedging instruments and the gains or losses on these derivative instruments are recorded in “Interest and other income (expense)” in the 29 Table of Contents Consolidated Statements of Operations. We also designate certain contracts as fair value hedges to mitigate the foreign exchange risk on the remeasurement of our foreign-currency denominated debt.
We therefore have foreign currency risk related to these currencies, which are primarily the euro, the British pound, the Brazilian real, Argentine peso, and the Mexican peso. Accordingly, volatility in exchange rates, and in particular a weakening of foreign currencies relative to the U.S. dollar may negatively affect our revenue and operating income as expressed in U.S. dollars.
We therefore have foreign currency risk related to these currencies, which are primarily the Euro, British pound, Brazilian real, Mexican peso, Canadian dollar, and Argentine peso. Accordingly, volatility in exchange rates, and in particular a weakening of foreign currencies relative to the U.S. dollar, may negatively affect our revenue and operating income as expressed in U.S. dollars.
We designate a portion of our foreign currency-denominated Senior Notes in euros as net investment hedges and the gains or losses on these non-derivative instruments are reported as a component of AOCI and remain in AOCI until the hedged net investment is sold or liquidated, at which point the amounts recognized in AOCI are reclassified into earnings.
We designate a portion of our foreign currency-denominated Senior Notes in Euro as net investment hedges and the gains or losses on these non-derivative instruments are reported as a component of AOCI and remain in AOCI until the hedged net investment is sold or liquidated, at which point the amounts recognized in AOCI are reclassified into earnings.
If an adverse change in exchange rates of 10% was applied to our monetary assets and liabilities denominated in currencies other than the functional currencies as of December 31, 2024 and December 31, 2023, income before income taxes would have been approximately $38 million and $516 million lower, respectively, after considering the offsetting impact of the foreign currency exchange contracts and our net investment hedges.
If an adverse change in exchange rates of 10% was applied to our monetary assets and liabilities denominated in currencies other than the functional currencies as of December 31, 2025 and December 31, 2024, income before income taxes would have been approximately $1 million and $38 million lower, respectively, after considering the offsetting impact of the foreign currency exchange contracts and our net investment hedges.
Foreign Currency Risk We operate our business globally and transact in multiple currencies. Currencies denominated in other than the U.S. dollar accounted for 56% of revenue and 29% of operating expenses for the year ended December 31, 2024.
Foreign Currency Risk We operate our business globally and transact in multiple currencies. Currencies denominated in other than the U.S. dollar accounted for 56% of revenue and 31% of operating expenses for the year ended December 31, 2025.
This adverse change in AOCI would be expected to offset a corresponding favorable foreign currency change in the underlying exposures when recognized in earnings. 27 Table of Contents We use non-derivative instruments to mitigate foreign exchange risk related to our net investments in certain foreign subsidiaries.
This adverse change in AOCI would be expected to offset a corresponding favorable foreign currency change in the underlying exposures when recognized in earnings. We use non-derivative instruments to mitigate foreign exchange risk related to our net investments in certain foreign subsidiaries.
If the U.S dollar strengthened by 10% as of December 31, 2024 and December 31, 2023, the amount recorded in AOCI related to our foreign exchange contracts, before taxes, would have been approximately $187 million and $71 million lower, respectively.
If the U.S dollar strengthened by 10% as of December 31, 2025 and December 31, 2024, the amount recorded in AOCI related to our foreign exchange contracts, before taxes, would have been approximately $237 million and $187 million lower, respectively.
Item 7A. Quantitative and Qualitative Disclosures about Market Risk We are exposed to market risks related to interest rate changes and the corresponding changes in the market values of our debt and foreign currency fluctuations. Interest Rate Risk At December 31, 2024, our cash equivalents were generally invested in money market funds and time deposits.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk We are exposed to market risks related to interest rate changes, which affect the market values of our investments and debt, as well as foreign currency fluctuations. Interest Rate Risk At December 31, 2025, our cash equivalents were generally invested in money market funds and time deposits.
If the U.S dollar weakened by 10% as of December 31, 2024 and December 31, 2023, the amount recorded in AOCI related to our foreign exchange contracts, before taxes, would have been approximately $1.9 billion and $958 million lower, respectively.
If the U.S dollar weakened by 10% as of December 31, 2025 and December 31, 2024, the amount recorded in AOCI related to our foreign exchange contracts, before taxes, would have been approximately $2,296 million and $1,850 million lower, respectively.
We designate these contracts as cash flow hedges of forecasted foreign currency revenue and initially record the gains or losses on these derivative instruments as a component of AOCI and reclassify the amounts into “Revenues” on the Consolidated Statements of Operations in the same period the forecasted transaction affects earnings.
We designate these contracts as cash flow hedges of forecasted foreign currency revenue and initially record the gains or losses on these derivative instruments as a component of accumulated other comprehensive income (“AOCI”) within Stockholders' equity in the Consolidated Balance Sheets and reclassify the amounts into “Revenues” on the Consolidated Statements of Operations in the same period the forecasted transaction affects earnings.
These contracts may reduce, but do not entirely eliminate, the effect of foreign currency exchange fluctuations, and we may choose not to hedge certain exposures.
We enter into foreign exchange forward contracts to mitigate fluctuations in forecasted U.S. dollar-equivalent revenues from changes in foreign currency exchange rates. These contracts may reduce, but do not entirely eliminate, the effect of foreign currency exchange fluctuations, and we may choose not to hedge certain exposures.
Changes in interest rates could adversely affect the market value of these securities. As of December 31, 2024, we had $15.7 billion of debt, consisting of fixed rate unsecured debt in fifteen tranches due between 2025 and 2054. Refer to Note 6 Debt to the consolidated financial statements for details about all issuances.
Interest paid on such funds fluctuates with the prevailing interest rate. As of December 31, 2025, we had $14.5 billion of debt, consisting of fixed rate unsecured debt in twelve tranches due between 2026 and 2054. Refer to Note 7 Debt to the consolidated financial statements for details about all issuances.
In the year ended December 31, 2024, we began entering into foreign exchange forward contracts to mitigate the foreign exchange risk on intercompany transactions and monetary assets and liabilities that are not denominated in the functional currencies of the Company and its subsidiaries.
We enter into foreign exchange forward contracts to mitigate the foreign exchange risk on intercompany transactions and monetary assets and liabilities that are not denominated in the functional currencies of the Company and its subsidiaries. These contracts may reduce, but do not entirely eliminate, the effect of foreign currency exchange fluctuations, and we may choose not to hedge certain exposures.
These contracts may reduce, but do not entirely eliminate, the effect of foreign currency exchange fluctuations, and we may choose not to hedge certain exposures. Certain contracts are not designated as hedging instruments and the gains or losses on these derivative instruments are recorded in “Interest and other income (expense)” in the Consolidated Statements of Operations.
The gains or losses on these derivative instruments included in the assessment of hedge effectiveness are recorded in “Interest and other income (expense),” net with the offsetting foreign currency remeasurement gains and losses on the hedged items.
Removed
Interest paid on such funds fluctuates with the prevailing interest rate. Our short-term investments are primarily comprised of investments in government securities. These securities are classified as available-for-sale and are recorded at fair value with unrealized gains and losses, net of tax, included in accumulated other comprehensive income (“AOCI”) within Stockholders' equity in the Consolidated Balance Sheets.
Added
Our revenues, on a constant currency basis, would have been approximately $271 million higher for the year ended December 31, 2025 than our reported revenues of $45,183 million. See Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” for further information regarding our non-GAAP financial measure of constant currency.
Removed
Excluding the impact of hedging gains or losses realized as revenues, our revenues for the year ended December 31, 2024 would have been approximately $1,424 million higher had foreign currency exchange rates remained constant with those in the same period of 2023.
Removed
The unfavorable foreign exchange rate impact in the year ended December 31, 2024 was primarily driven by the devaluation of the Argentine peso relative to the U.S. dollar coupled with significant price increases in the local currency in this jurisdiction.
Removed
See Part II, Item 7, "Management’s Discussion and Analysis of Financial Condition and Results of Operations" for further information regarding our non-GAAP financial measure of constant currency. We enter into foreign exchange forward contracts to mitigate fluctuations in forecasted U.S. dollar-equivalent revenues from changes in foreign currency exchange rates.
Removed
The decrease in the hypothetical adverse change in income before taxes from $516 million as of December 31, 2023 to $38 million as of December 31, 2024 is primarily driven by our use of non-derivative and derivative instruments to mitigate foreign exchange risk related to the remeasurement of foreign-currency denominated balances during the year ended December 31, 2024.

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