NFLX changes
Pick any two versions below to diff them.
- Price
- $61.99
- Discount category
- Below intrinsic value
- Next earnings
- 2027-01-19
- Next earnings is estimate
- Yes
- Company name
- Netflix
- Sector
- Streaming & entertainment
- About
- Netflix runs a subscription streaming service with series, films, games and live events. Members pay a monthly fee, and an ad-supported plan also earns advertising revenue. It makes its own series and films in many countries and licenses titles from other studios. Revenue was $45.2 billion in 2025, and the company expects $51.1 billion in 2026. Its audience is close to one billion people. In November 2025, Netflix split its stock ten for one. The company is based in Los Gatos, California.
- Thesis
- The market prices Netflix for slower growth. Revenue growth fell from 17.6% in Q4 2025 to 11.8% in Q3 2026, and the company expects 11.5% in Q4 2026. Netflix now expects 2026 advertising revenue of about $2.7 billion, below its earlier plan of about $3 billion. View hours grew only about 2% in the first half of 2026, and the company says that investors are concerned about this slow growth. For the gap to close, three things must be true. Revenue must keep growing by about 10% or more as prices, members and ads grow. The operating margin must keep rising from the 31.5% expected for 2026. Free cash flow must keep funding large share buybacks while debt stays near its present level. The Q4 2026 report and the 2027 forecast, expected in January 2027, give the next test. The launch of the ad plan in twelve more countries in March 2027 tests ad growth. If these checks pass, the gap can close over the next four to six quarters. The main reason it may not close is that engagement stays flat, which can limit future price increases.
- Risks
- Many services compete for viewing time. View hours grew only about 2% in the first half of 2026. If engagement stays flat, Netflix can find it harder to raise prices and keep members. The ad business grows more slowly than planned. Netflix lowered its 2026 ad revenue estimate to about $2.7 billion from about $3 billion because some ad products came later than expected. Content costs are large and grow each year. Live sports and big series cost more, and a weak slate can raise churn. Netflix tried to buy a large studio in 2026. A new large purchase can add debt and costs and take management time.
- Balance sheet
- Cash: $8.2B Debt: $15.3B Net debt: $7.1B Undrawn credit line: $3.0B, to April 2029 Netflix has investment-grade debt and large cash flow. Gross debt was $15.3 billion and cash and cash equivalents were $8.2 billion at September 30, 2026. Gross debt rose by about $1 billion in Q3 because the company sold $1 billion of 5.250% notes due 2036 in July 2026 to repay $1 billion of notes due in Q4 2026. The $3 billion revolving credit facility was not drawn and runs to April 12, 2029. Netflix expects free cash flow of about $12.0 billion in 2026. It bought back $4.8 billion of stock in Q3 2026 and had $22.3 billion of repurchase authorization left. There were 4,106.3 million shares outstanding at September 30, 2026. As of 2026-09-30.
- Checkpoints
- Jan 19, 2027 (estimate): Q4 2026 results and 2027 forecast. Pending. Watch: Q4 revenue of about $13.4 billion and a 2027 forecast with revenue growth of about 10% or more and a higher operating margin pass; a 2027 forecast with slower growth or a flat margin fails. Mar 2027: Ad plan launch in twelve more countries. Pending. Watch: A launch on time in nine EMEA countries, Colombia, Peru and New Zealand passes; a delay of these launches fails.
- Recent events
- 2026-10-20: Netflix reported Q3 2026 results. Revenue rose 12% to $12.9 billion, and the operating margin rose to 34.6% from 28.2%. Diluted EPS was $0.87, up from $0.59. The company now expects 2026 revenue of $51.1 billion, an operating margin of 31.5% and free cash flow of about $12.0 billion. It lowered its 2026 ad revenue estimate to about $2.7 billion from about $3 billion. It bought back $4.8 billion of stock in the quarter and said that it made headcount reductions. 2026-07-22: Netflix sold $1 billion of 5.250% senior notes due 2036. It will use the money to repay its 4.375% notes due 2026. 2026-07-16: Netflix reported Q2 2026 results. Revenue rose 13% to $12.6 billion, and the operating margin was 33.4%. It narrowed its 2026 revenue forecast to $51.0 billion to $51.4 billion and kept its operating margin target of 31.5%. It bought back $4.7 billion of stock in the quarter. 2026-04-22: The Netflix board authorized the repurchase of an additional $25 billion of common stock. 2026-04-16: Netflix reported Q1 2026 results. Revenue rose 16%, and operating income rose 18%. Net income was $5.28 billion, including the $2.8 billion termination fee from the Warner Bros. deal. Co-founder Reed Hastings said that he would leave the board at the June 2026 annual meeting. 2026-02-27: Warner Bros. Discovery ended its merger agreement with Netflix to accept a higher offer from Paramount Skydance. Netflix did not raise its offer and received a termination fee of $2.8 billion. Its bridge loan commitments for the deal ended. 2026-01-20: Netflix reported 2025 results. Revenue rose 16% to $45.2 billion, and the operating margin was 29.5%. It forecast 2026 revenue of $50.7 billion to $51.7 billion. On January 19, 2026, it changed its offer for the Warner Bros. studios and streaming business to all cash, at $27.75 per Warner Bros. Discovery share. 2025-12-04: Netflix agreed to buy the studios and streaming business of Warner Bros. Discovery after the separation of its cable networks, and it obtained a $59 billion bridge loan commitment.