What changed in this filing

/stocks — the workspaceLOADING

Item 9A. Controls and Procedures

2025-01-27 compared with 2024-01-26 · 317 added, 180 removed, 955 unchanged (34% of the section changed)

45 unchanged sentences

Name Title Action Date Adopted Expiration Date Aggregate # of Securities to be Purchased/Sold

Ted Sarandos (1)

Co-CEO and Director Adoption 11/10/2023 2/7/2025 68,957

(1) Ted Sarandos, co-CEO and a member of the Board of Directors, entered into a pre-arranged stock trading plan pursuant to Rule 10b5-1 on November 10, 2023.

Greg Peters (1) Co-CEO and Director Termination 10/30/2024 N/A 187,913

Greg Peters (2) Co-CEO and Director Adoption 10/30/2024 11/1/2027 158,583

David Hyman (3) Chief Legal Officer Adoption 10/29/2024 1/30/2026 104,154

Ted Sarandos (4) Co-CEO and Director Adoption 10/25/2024 2/27/2026 199,063

Spencer Neumann (5) Chief Financial Officer Adoption 10/29/2024 12/31/2025 33,406

Ann Mather (6) Director Adoption 10/31/2024 12/31/2025 2,682

Strive Masiyiwa (7) Director Adoption 11/7/2024 12/31/2025 2,813

Jeffrey Karbowski (8) Chief Accounting Officer Adoption 10/29/2024 1/31/2026 3,820

(1) On October 30, 2024, Greg Peters, Co-CEO and a member of the Board of Directors, terminated a pre-arranged stock trading plan pursuant to Rule 10b5-1, which was adopted on July 26, 2023 and provided for the potential exercise of vested stock options and the associated sale of up to 187,913 shares of Netflix common stock until November 1, 2027 or the earlier completion of all authorized transactions under the plan.

(2) Upon termination of Mr.

Peters' prior plan (described in footnote 1), on October 30, 2024, Mr.

Peters entered into a pre-arranged stock trading plan pursuant to Rule 10b5-1 that provides for the potential exercise of vested stock options and the associated sale of up to 158,583 shares of Netflix common stock.

This figure includes a grant of 31,112 Performance Share Units (PSUs) that are expected to vest during the term of the 10b5-1 plan, which are assumed to vest at 100% of the target award amount.

The actual number of PSUs that may vest can vary between 0% - 200% of the target award of PSUs, subject to the achievement of certain performance conditions as set forth in the PSU award agreement, less shares to be withheld for tax withholding obligations.

The plan expires on November 1, 2027, or upon the earlier completion of all authorized transactions under the plan.

(3) David Hyman, Chief Legal Officer, entered into a pre-arranged stock trading plan pursuant to Rule 10b5-1 on October 29, 2024.

Hyman's plan provides for the potential exercise of vested stock options and the associated sale of up to 104,154 shares of Netflix common stock.

This figure includes 2,174 PSUs that are expected to vest during the term of the 10b5-1 plan, which are assumed to vest at 100% of the target award amount.

The plan expires on January 30, 2026, or upon the earlier completion of all authorized transactions under the plan.

(4) Ted Sarandos, co-CEO and a member of the Board of Directors, entered into a pre-arranged stock trading plan pursuant to Rule 10b5-1 on October 25, 2024.

Sarandos' plan provides for the potential exercise of vested stock options and the associated sale of up to 199,063 shares of Netflix common stock.

The plan expires on February 27, 2026, or upon the earlier completion of all authorized transactions under the plan.

(5) Spencer Neumann, Chief Financial Officer, entered into a pre-arranged stock trading plan pursuant to Rule 10b5-1 on October 29, 2024.

Neumann's plan provides for the potential exercise of vested stock options and the associated sale of up to 33,406 shares of Netflix common stock.

The plan expires on December 31, 2025, or upon the earlier completion of all authorized transactions under the plan.

(6) Ann Mather, a member of the Board of Directors, entered into a pre-arranged stock trading plan pursuant to Rule 10b5-1 on October 31, 2024.

Mather's plan provides for the potential exercise of vested stock options and the associated sale of up to 2,682 shares of Netflix common stock.

The plan expires on December 31, 2025, or upon the earlier completion of all authorized transactions under the plan.

(7) Strive Masiyiwa, a member of the Board of Directors, entered into a pre-arranged stock trading plan pursuant to Rule 10b5-1 on November 7, 2024.

Masiyiwa's plan provides for the potential exercise of vested stock options and the associated sale of up to 2,813 shares of Netflix common stock.

The plan expires on December 31, 2025, or upon the earlier completion of all authorized transactions under the plan.

(8) Jeffrey Karbowski, Chief Accounting Officer, entered into a pre-arranged stock trading plan pursuant to Rule 10b5-1 on October 29, 2024.

Karbowski's plan provides for the potential exercise of vested stock options and the associated sale of up to 3,820 shares of Netflix common stock.

The plan expires on January 31, 2026, or upon the earlier completion of all authorized transactions under the plan.

Other than those disclosed above, none of our directors or officers adopted or terminated a "non-Rule 10b5-1 trading arrangement" as defined in Item 408 of Regulation S-K.

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Election of Directors,” and “Code of Ethics” in our Proxy Statement for the Annual Meeting of Stockholders.

The Company has adopted an insider trading policy which governs transactions in our securities by the Company and its directors, officers, employees, consultants, and contractors and is designed to promote compliance with insider trading laws, rules and regulations applicable to the Company.

A copy of our insider trading policy is filed with this Annual Report on Form 10-K as Exhibit 19.1.

Executive Compensation

74 unchanged sentences

Cost of revenues 21,038,464 19,715,368 19,168,285

2,657,883 2,530,502 2,545,146

Sales and marketing 2,917,554 2,657,883 2,530,502

Technology and development

23 unchanged sentences

Other comprehensive income (loss):

Foreign currency translation adjustments

Foreign currency translation adjustments, net of income tax (expense) benefit of $( 7 ) million, $ 0 , and $ 0 , respectively

( 247,949 ) 113,384 ( 176,811 )

Change in unrealized gains on available-for-sale securities, net of income tax (expense) benefit of $( 1 ) million, $ 0 , and $ 0 , respectively

Cash flow hedges:

Net unrealized gains (losses), net of tax benefit (expense) of $ 36 million, $ 0 , and $ 0 , respectively

Net unrealized gains (losses) 921,227 ( 120,023 ) —

Reclassification of net gains included in net income ( 96,795 ) — —

Net change, net of income tax (expense) benefit of $( 246 ) million, $ 36 million, and $ 0 , respectively

824,432 ( 120,023 ) —

Total other comprehensive loss ( 6,639 ) ( 176,811 ) ( 84,893 )

Fair value hedges:

Net unrealized gains excluded from the assessment of effectiveness, net of income tax (expense) benefit of $( 2 ) million, $ 0 , and $ 0 , respectively

Total other comprehensive income (loss) 586,107 ( 6,639 ) ( 176,811 )

Comprehensive income $ 9,297,738 $ 5,401,351 $ 4,315,113

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Purchases of property and equipment ( 439,538 ) ( 348,552 ) ( 407,729 )

Change in other assets — — ( 26,919 )

Acquisitions — — ( 757,387 )

Purchases of short-term investments ( 504,862 ) ( 911,276 ) —

Proceeds from maturities of short-term investments 1,395,165 — —

Purchases of investments ( 1,742,246 ) ( 504,862 ) ( 911,276 )

Proceeds from maturities of investments — 1,395,165 —

Net cash provided by (used in) investing activities ( 2,181,784 ) 541,751 ( 2,076,392 )

Cash flows from financing activities:

Proceeds from issuance of debt 1,794,460 — —

Repayments of debt ( 400,000 ) — ( 700,000 )

48 unchanged sentences

( 13,171,638 ) ( 6,922,200 )

Accumulated other comprehensive loss ( 223,945 ) ( 217,306 )

Accumulated other comprehensive income (loss) 362,162 ( 223,945 )

Retained earnings 31,300,917 22,589,286

14 unchanged sentences

Other comprehensive loss — — — ( 176,811 ) — ( 176,811 )

Issuance of common stock upon exercise of options

2,632,324 173,643 — — — 173,643

Repurchases of common stock ( 1,182,410 ) — ( 600,022 ) — — ( 600,022 )

Shares withheld related to net share settlement ( 382,068 ) — ( 224,168 ) — — ( 224,168 )

Issuance of common stock 1,383,669 37,588 — — — 37,588

Stock-based compensation expense

3 unchanged sentences

Other comprehensive loss — — — ( 6,639 ) — ( 6,639 )

Issuance of common stock upon exercise of options

1,383,669 37,588 — — — 37,588

Issuance of common stock 1,926,598 168,203 — — — 168,203

Repurchases of common stock ( 14,513,790 ) — ( 6,098,010 ) — — ( 6,098,010 )

Stock-based compensation expense

2 unchanged sentences

— — — — 8,711,631 8,711,631

Other comprehensive loss — — — ( 6,639 ) — ( 6,639 )

Issuance of common stock upon exercise of options

1,926,598 168,203 — — — 168,203

Other comprehensive income — — — 586,107 — 586,107

Issuance of common stock 4,872,708 834,366 — — — 834,366

Repurchases of common stock ( 9,861,935 ) — ( 6,241,153 ) — — ( 6,241,153 )

Shares withheld related to net share settlement of equity awards ( 13,257 ) — ( 8,285 ) — — ( 8,285 )

Stock-based compensation expense

8 unchanged sentences

(the “Company”) was incorporated on August 29, 1997 and began operations on April 14, 1998.

The Company is one of the world’s leading entertainment services with over 260 million paid memberships in over 190 countries enjoying TV series, films and games across a wide variety of genres and languages.

The Company 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.

Members can play, pause and resume watching as much as they want, anytime, anywhere, and can change their plans at any time.

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Recently issued accounting pronouncements not yet adopted

In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures , which requires public entities to disclose information about their reportable segments’ significant expenses and other segment items on an interim and annual basis.

Public entities with a single reportable segment are required to apply the disclosure requirements in ASU 2023-07, as well as all existing segment disclosures and reconciliation requirements in ASC 280 on an interim and annual basis.

ASU 2023-07 is effective for fiscal years beginning after December 15, 2023, and for interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted.

The Company is currently evaluating the impact of adopting ASU 2023-07.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740):

In December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures , which requires public entities, on an annual basis, to provide disclosure of specific categories in the rate reconciliation, as well as disclosure of income taxes paid disaggregated by jurisdiction.

1 unchanged sentence

The Company is currently evaluating the impact of adopting ASU 2023-09.

In November 2024, the FASB issued ASU 2024-03, Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40):

Disaggregation of Income Statement Expenses , requiring public entities to disclose additional information about specific expense categories in the notes to the financial statements on an interim and annual basis.

ASU 2024-03 is effective for fiscal years beginning after December 15, 2026, and for interim periods beginning after December 15, 2027, with early adoption permitted.

The Company is currently evaluating the impact of adopting ASU 2024-03.

Recently adopted accounting pronouncements

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures , requiring public entities to disclose information about their reportable segments’ significant expenses and other segment items on an interim and annual basis.

The Company adopted ASU 2023-07 during the year ended December 31, 2024.

See Note 12 Segment and Geographic Information in the accompanying notes to the consolidated financial statements for further detail.

Cash Equivalents and Short-term Investments

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For produced content, the Company capitalizes costs associated with the production, including development costs, direct costs and production overhead.

Participations and residuals are expensed in line with the amortization of production costs.

Based on factors including historical and estimated viewing patterns, the Company amortizes 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, the Company amortizes 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 over ten years , beginning with the month of first availability.

The amortization is on an accelerated basis, as the Company typically expects more upfront viewing, and film amortization is more accelerated than TV series amortization.

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Trade Receivables

Trade receivables consist primarily of amounts related to members and payment partners that collect membership fees on the Company's behalf.

Trade receivables primarily consist of membership and advertising fees due to the Company.

The Company evaluates the need for an allowance for credit losses based on historical collection trends, the financial condition of its payment partners, and external market factors.

The Company's allowance for credit losses was not material as of December 31, 2023 and December 31, 2022.

Revenue Recognition

1 unchanged sentence

Members are billed in advance of the start of their monthly membership and revenues are recognized ratably over each monthly membership period.

presented net of the taxes that are collected from members and remitted to governmental authorities.

Revenues are presented net of the taxes that

are collected from members and remitted to governmental authorities.

The Company is the principal in all its relationships where partners, including consumer electronics ("CE") manufacturers, multichannel video programming distributors ("MVPDs"), mobile operators and internet service providers ("ISPs"), provide access to the service as the Company retains control over service delivery to its members.

In circumstances in which the price that the member pays is established by a partner and there is no standalone price for the Netflix service (for instance, in a bundle), the net amount collected from the partner is recognized as revenue.

The Company also earns revenue from advertisements presented on its streaming service, consumer products and various other sources.

Revenues earned from sources other than monthly membership fees were not material for the years ended December 31, 2023, 2022, and 2021.

The Company also earns revenue from advertisements presented on its streaming service, consumer products, live events and various other sources.

Revenues earned from sources other than monthly membership fees were not a material component of revenues for the years ended December 31, 2024, 2023, and 2022.

See Note 2 Revenue Recognition to the consolidated financial statements for further information regarding revenues.

Marketing expenses consist primarily of advertising expenses and certain payments made to the Company’s partners, including CE manufacturers, MVPDs, mobile operators and ISPs.

Marketing expenses also include payroll, stock-based compensation, facilities, and other related expenses for personnel that support the Company's sales and marketing activities.

Advertising expenses include promotional activities such as digital and television advertising.

Advertising costs are expensed as incurred.

Sales and Marketing

Sales and marketing expenses consist primarily of advertising expenses and certain payments made to marketing and advertising sales partners, including CE manufacturers, MVPDs, mobile operators and ISPs.

Sales and marketing expenses also include payroll, stock-based compensation, facilities, and other related expenses for personnel that support the Company's advertising sales and marketing activities.

Marketing expenses are expensed as incurred and include promotional activities such as digital and television advertising.

Advertising expenses were $ 1,779 million, $ 1,732 million and $ 1,586 million for the years ended December 31, 2024, 2023 and 2022, respectively.

3 unchanged sentences

The measurement of deferred tax assets is reduced, if necessary, by a valuation allowance for any tax benefits for which future realization is uncertain.

We account for the tax effects of global intangible low tax income as a current period expense.

The Company accounts for the tax effects of global intangible low tax income as a current period expense.

The Company does not recognize certain tax benefits from uncertain tax positions within the provision for income taxes.

12 unchanged sentences

Gains and losses from these remeasurements are recognized in "Interest and other income (expense)" in the Consolidated Statements of Operations.

Foreign currency transactions resulted in a loss of $ 293 million, a gain of $ 282 million, and a gain of $ 403 million for the years ended December 31, 2023, 2022, and 2021, respectively.

Foreign exchange gains (losses) were $( 18 ) million, $( 293 ) million, and $ 282 million for the years ended December 31, 2024, 2023, and 2022, respectively.

These gains and losses were primarily due to the non-cash remeasurement of our Senior Notes denominated in euros and the remeasurement of cash and content liability positions denominated in currencies other than functional currencies.

Derivative Financial Instruments

The Company uses derivative instruments to manage foreign exchange risk related to its ongoing business operations with the primary objective of reducing operating income and cash flow volatility associated with fluctuations in foreign exchange rates.

Foreign exchange gains (losses) for the year ended December 31, 2024 were net of hedging impacts.

No hedging gains or losses were recognized in the Consolidated Statements of Operations in the years ended December 31, 2023 and 2022.

See Note 7 Derivative Financial Instruments and Hedging Activities for further information.

Derivative Financial Instruments and Hedging Activities

The Company uses derivative and non-derivative instruments to manage foreign exchange risk related to its ongoing business operations with the primary objective of reducing earnings and cash flow volatility associated with fluctuations in foreign exchange rates.

The Company recognizes derivative instruments at fair value as either assets (presented in “Other current assets” and “Other non-current assets”) or liabilities (presented in “Accrued expenses and other liabilities” and “Other non-current liabilities”) on the Company’s Consolidated Balance Sheets.

The Company classifies derivative instruments in the Level 2 category within the fair value hierarchy.

Cash flow hedges

The Company enters into forward contracts to manage the foreign exchange risk on forecasted revenue transactions denominated in currencies other than the U.S.

dollar, as well as the foreign exchange risk on forecasted transactions and firm commitments related to the licensing and production of foreign currency-denominated content assets.

These forward contracts

are designated as cash flow hedges of foreign currency firm commitments and forecasted transactions and generally have maturities of 24 months or less.

These forward contracts are designated as cash flow hedges of foreign currency firm commitments and forecasted transactions and generally have maturities of 36 months or less.

The hedging contracts may reduce, but do not entirely eliminate, the effect of foreign currency exchange movements, and the Company may choose not to hedge certain exposures.

The Company recognizes derivative instruments at fair value as either assets (presented in “Other current assets” and “Other non-current assets”) or liabilities (presented in “Accrued expenses and other liabilities'' and “Other non-current liabilities”) on the Company’s Consolidated Balance Sheets.

The Company classifies derivative instruments in the Level 2 category within the fair value hierarchy.

The gain or loss on derivative instruments designated as cash flow hedges of forecasted foreign currency revenue is initially reported as a component of accumulated other comprehensive income (“AOCI”) and reclassified into “Revenues” on the Consolidated Statements of Operations in the same period the forecasted transaction affects earnings.

2 unchanged sentences

In the event that the likelihood of occurrence of the underlying forecasted transactions is determined to be probable not to occur, the gains or losses on the related cash flow hedges are reclassified from AOCI to “Interest and other income (expense)” in the Consolidated Statements of Operations in the period of dedesignation.

See Note 7 Derivative Financial Instruments to the consolidated financial statements for further information regarding the Company’s derivative financial instruments.

Fair value hedges

The Company designates forward contracts as fair value hedges to manage the foreign exchange risk on its foreign-currency denominated debt.

These hedges may reduce, but do not entirely eliminate, the effect of foreign currency exchange movements, and the Company may choose not to hedge the full amount of its exposure.

The gain or loss on derivative instruments designated as fair value hedges included in the assessment of hedge effectiveness is recognized in “Interest and other income (expense),” net with the offsetting foreign currency remeasurement gains and losses on the hedged items.

The Company excludes forward points from the assessment of hedge effectiveness and recognizes the initial value of the excluded component over the life of the hedging instrument in “Interest and other income (expense)” on the Consolidated Statements of Operations.

The difference between changes in fair value of the excluded component and the amount recognized in earnings is recognized as a component in AOCI.

Cash flows from hedging activities are classified in the same category as the cash flows for the underlying item being hedged within "Net cash provided by (used in) financing activities" on the Consolidated Statements of Cash Flows.

Net investment hedges

The Company designates a portion of its foreign currency-denominated debt as net investment hedges to manage the foreign exchange risk on its investment in certain foreign subsidiaries.

These hedges may reduce, but do not entirely eliminate, the effect of foreign currency exchange movements, and the Company may choose not to hedge certain exposures.

The gains or losses on these non-derivative instruments are reported as a component of AOCI as part of the cumulative translation adjustment on the Company’s Consolidated Balance Sheets.

The accumulated gains and losses remain in AOCI until the hedged net investment is sold or liquidated, at which point the amounts recognized in AOCI are reclassified into earnings.

Derivative instruments not designated as hedging instruments

The Company enters into forward contracts to manage 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 derivative instruments are not designated as hedging instruments and may reduce, but do not entirely eliminate, the effect of foreign currency exchange movements.

The gains or losses on derivative instruments not designated as hedging instruments are recorded in “Interest and other income (expense)” in the Consolidated Statements of Operations.

Cash flows related to these derivative instruments are classified within "Net cash provided by operating activities" on the Consolidated Statements of Cash Flows.

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.

Stock-Based Compensation

The Company grants non-qualified stock options to its employees on a monthly basis.

Stock-based compensation expense is based on the fair value of the options at the grant date and is recognized, net of forfeitures, over the requisite service period.

For certain executive officers, the Company grants restricted stock units ("RSUs") and performance-based restricted stock units ("PSUs").

Stock-based compensation expense is based on the fair value of the stock awards at the grant date and is recognized, net of forfeitures, over the requisite service period.

See Note 9 Stockholders' Equity to the consolidated financial statements for further information regarding stock-based compensation.

1 unchanged sentence

The following tables summarize streaming revenues, paid net membership additions (losses), and ending paid memberships by region for the years ended December 31, 2024, 2023 and 2022, respectively.

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.

See Note 7 Derivative Financial Instruments and Hedging Activities for further information.

United States and Canada (UCAN)

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(in thousands)

Revenues $ 14,873,783 $ 14,084,643 $ 12,972,100

Streaming revenues $ 17,359,369 $ 14,873,783 $ 14,084,643

Paid net membership additions (losses) 9,497 5,832 ( 919 )

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(in thousands)

Revenues $ 10,556,487 $ 9,745,015 $ 9,699,819

Streaming revenues $ 12,387,035 $ 10,556,487 $ 9,745,015

Paid net membership additions 12,320 12,084 2,693

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(in thousands)

Revenues $ 4,446,461 $ 4,069,973 $ 3,576,976

Streaming revenues $ 4,839,816 $ 4,446,461 $ 4,069,973

Paid net membership additions 7,330 4,298 1,738

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(in thousands)

Revenues $ 3,763,727 $ 3,570,221 $ 3,266,601

Streaming revenues $ 4,414,746 $ 3,763,727 $ 3,570,221

Paid net membership additions 12,203 7,315 5,391

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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.

Deferred revenue consists of membership fees billed that have not been recognized, as well as gift and other prepaid memberships that have not been fully redeemed.

Deferred revenue primarily consists of membership fees billed that have not been recognized, as well as gift and other prepaid memberships that have not been fully redeemed.

As of December 31, 2024, total deferred revenue was $ 1,521 million, the vast majority of which was related to membership fees billed that are expected to be recognized as revenue within the next month.

The remaining deferred revenue balance, which is related to gift cards and other prepaid memberships, will be recognized as revenue over the period of service after redemption, which is expected to occur over the next 12 months.

The $ 178 million increase in deferred revenue as compared to the balance of $ 1,265 million for the year ended December 31, 2022, is a result of the increase in membership fees billed due to increased memberships.

The $ 78 million increase in deferred revenue as compared to the balance of $ 1,443 million for the year ended December 31, 2023, is a result of the increase in membership fees billed due to increased memberships and price increases.

Earnings per Share

Basic earnings per share is computed using the weighted-average number of outstanding shares of common stock during the period.

Diluted earnings per share is computed using the weighted-average number of outstanding shares of common stock and, when dilutive, potential common shares outstanding during the period.

Potential common shares consist of incremental shares issuable upon the assumed exercise of stock options.

Diluted earnings per share is computed using the weighted-average number of outstanding shares of common stock and, when dilutive, potential outstanding shares of common stock during the period.

Potential outstanding shares of common stock are calculated using the treasury-stock method and consist of incremental shares issuable upon the assumed exercise of stock options and vesting of time-based and performance-based restricted stock units.

The computation of earnings per share is as follows:

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Weighted-average shares of common stock outstanding 429,519 441,571 444,698

Employee stock options 7,927 6,592 12,217

Effect of dilutive stock-based awards 9,742 7,927 6,592

Weighted-average number of shares 439,261 449,498 451,290

1 unchanged sentence

$ 19.83 $ 12.03 $ 9.95

Employee stock options with exercise prices greater than the average market price of the common stock were excluded from the diluted calculation as their inclusion would have been anti-dilutive.

The following table summarizes the potential common shares excluded from the diluted calculation:

The following table summarizes the potential shares of common stock excluded from the diluted calculation as their inclusion would have been anti-dilutive:

Year Ended December 31,

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(in thousands)

Employee stock options 4,109 6,790 348

Stock-based awards 243 4,109 6,790

Cash, Cash Equivalents, Restricted Cash, and Short-term Investments

The Company classifies short-term investments, which consist of marketable securities with original maturities in excess of 90 days as available-for-sale.

The Company classifies short-term investments, which consist of marketable securities with original maturities in excess of 90 days as available-for-sale (“AFS”).

The Company does not buy and hold securities principally for the purpose of selling them in the near future.

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As of December 31, 2024

Cash and cash equivalents Short-term investments Other Current Assets Non-current Assets Total

Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value Cash and cash equivalents Short-term investments Other Current Assets Non-current Assets

(in thousands)

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Time Deposits (1) 301,374 — — 301,374 264,270 37,104 — —

Government securities (2) 1,738,642 3,260 — 1,741,902 — 1,741,902 — —

$ 9,583,083 $ 3,260 $ — $ 9,586,343 $ 7,804,733 $ 1,779,006 $ 2,472 $ 132

(1) The majority of the Company's time deposits are international deposits, which mature within one year.

As of December 31, 2023

Cash and cash equivalents Short-term investments Other Current Assets Non-current Assets Total

Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value Cash and cash equivalents Short-term investments Other Current Assets Non-current Assets

(in thousands)

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$ 7,139,488 $ — $ — $ 7,139,488 $ 7,116,913 $ 20,973 $ 1,466 $ 136

(2) The majority of the Company's time deposits are domestic deposits, which mature within one year.

Other current assets include restricted cash for deposits related to self-insurance and letter of credit agreements.

(1) The majority of the Company's time deposits are international deposits, which mature within one year.

(2) The Company's government securities mature within one year.

Other current assets include restricted cash for deposits related to self-insurance.

Non-current assets include restricted cash related to letter of credit agreements.

The fair value of cash equivalents and short-term investments included in the Level 2 category is based on observable inputs, such as quoted prices for similar assets at the measurement date;

The fair value of AFS securities, cash equivalents and short-term investments included in the Level 2 category is based on observable inputs, such as quoted prices for similar assets at the measurement date;

quoted prices in markets that are not active;

or other inputs that are observable, either directly or indirectly.

See Note 6 Debt to the consolidated financial statements for further information regarding the fair value of the Company’s senior notes.

There were no material gross realized gains or losses for the years ended December 31, 2023 and 2022.

See Note 6 Debt and Note 7 Derivative Financial Instruments and Hedging Activities to the consolidated financial statements for further information regarding the fair value of the Company’s senior notes and derivative financial instruments.

Balance Sheet Components

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As of December 31, 2024, approximately $ 3,954 million, $ 2,767 million, and $ 1,718 million of the $ 10,152 million unamortized cost of the produced content that has been released is expected to be amortized in each of the next three years.

As of December 31, 2023, the amount of accrued participations and residuals was not material.

The following table represents the amortization of content assets:

The following table summarizes the amortization of content assets:

Year Ended December 31,

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(1) Tax incentives earned on qualified production spend generally reduce the cost-basis of content assets and result in lower content amortization over the life of the title.

For the years ended December 31, 2023 and 2022, tax incentives resulted in lower content amortization on produced content of approximately $ 835 million and $ 719 million, respectively.

For the years ended December 31, 2024, 2023 and 2022, tax incentives resulted in lower content amortization on produced content of approximately $ 899 million, $ 835 million and $ 719 million, respectively.

Property and Equipment, Net

3 unchanged sentences

Land $ 85,000 $ 85,000

Buildings 150,736 52,106 30 years

Buildings and improvements 475,684 154,165 30 years

Leasehold improvements 1,026,593 1,032,492 Over life of lease

59 unchanged sentences

(1) $ 653 million and $ 555 million of receivables related to tax incentives earned on production spend are included in Other as of December 31, 2024 and 2023, respectively .

The decrease in Other was primarily driven by receipt of amounts due under a modified content licensing arrangement.

As of December 31, 2023, the Company had aggregate outstanding notes of $ 14,543 million, net of $ 65 million of issuance costs, with varying maturities (the "Notes").

As of December 31, 2024, the Company had aggregate outstanding notes of $ 15,583 million, net of $ 70 million of issuance costs and discounts, with varying maturities (the "Notes").

Of the outstanding balance, $ 1,784 million, net of issuance costs, is classified as short-term debt on the Consolidated Balance Sheets.

As of December 31, 2022, the Company had aggregate outstanding long-term notes of $ 14,353 million, net of $ 79 million of issuance costs.

Each of the Notes were issued at par and are senior unsecured obligations of the Company.

As of December 31, 2023, the Company had aggregate outstanding notes of $ 14,543 million, net of $ 65 million of issuance costs.

Each of the Notes are senior unsecured obligations of the Company.

Interest is payable semi-annually at fixed rates.

A portion of the outstanding Notes is denominated in foreign currency (comprised of € 5,170 million) and is remeasured into U.S.

dollars at each balance sheet date (with remeasurement loss totaling $ 176 million for the year ended December 31, 2023).

dollars at each balance sheet date (with remeasurement gain, net of hedging impacts, totaling $ 122 million for the year ended December 31, 2024).

The following table provides a summary of the Company's outstanding debt and the fair values based on quoted market prices in less active markets as of December 31, 2024 and December 31, 2023:

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1,000 1,000 October 2019 June 2030 996 1,012

4.900 % Senior Notes

1,000 — August 2024 August 2034 982 —

5.400 % Senior Notes

800 — August 2024 August 2054 782 —

$ 15,653 $ 14,608 $ 15,948 $ 15,018

(1) The following Senior Notes have a principal amount denominated in euro:

(1) The following Senior Notes have a principal amount denominated in euros:

3.000 % Senior Notes for € 470 million, 3.625 % Senior Notes for € 1,300 million, 4.625 % Senior Notes for € 1,100 million, 3.875 % Senior Notes for € 1,200 million, and 3.625 % Senior Notes for € 1,100 million.

In the year ended December 31, 2024, the Company repaid upon maturity the $ 400 million aggregate principal amount of its 5.750 % Senior Notes.

Each of the Notes are repayable in whole or in part upon the occurrence of a change of control, at the option of the holders, at a purchase price in cash equal to 101 % of the principal plus accrued interest.

The Company may redeem the Notes prior to maturity in whole or in part at an amount equal to the principal amount thereof plus accrued and unpaid interest and an applicable premium.

The Notes include, among other terms and conditions, limitations on the Company's ability to create, incur or allow certain liens;

enter into sale and lease-back transactions;

create, assume, incur or guarantee additional indebtedness of certain of the Company's subsidiaries;

and consolidate or merge with, or convey, transfer or lease all or substantially all of the Company's and its subsidiaries assets, to another person.

The Notes include, among other terms and conditions, limitations on the Company's ability to create, incur or allow certain liens, and consolidate or merge with, or convey, transfer or lease all or substantially all of the Company's and its subsidiaries assets, to another person.

Certain of the Notes additionally limit the ability to enter into sale and lease-back transactions and create, assume, incur or guarantee additional indebtedness of certain of the Company's subsidiaries.

As of December 31, 2024 and December 31, 2023, the Company was in compliance with all related covenants.

Revolving Credit Facility

On March 6, 2023, the Company amended its $ 1 billion unsecured revolving credit facility ("Revolving Credit Agreement") to replace the London interbank offered rate to a variable secured overnight financing rate (the “Term SOFR Rate”) as the rate to which interest payments are indexed, among other things.

The Revolving Credit Agreement matures on June 17, 2026.

Revolving loans may be borrowed, repaid and reborrowed until June 17, 2026, at which time all amounts borrowed must be repaid.

The Company may use the proceeds of future borrowings under the Revolving Credit Agreement for

working capital and general corporate purposes.

On April 12, 2024, the Company entered into a five-year , $ 3 billion unsecured revolving credit facility that matures on April 12, 2029 (the “Revolving Credit Agreement”), to replace its previous $ 1 billion unsecured revolving credit facility.

As of December 31, 2024, no amounts have been borrowed under the Revolving Credit Agreement.

The borrowings under the Revolving Credit Agreement bear interest, at the Company’s option, of either (i) a floating rate equal to a base rate (the “Alternate Base Rate”) or (ii) a rate equal to the Term SOFR Rate (or the applicable benchmark replacement), plus a margin of 0.75 %.

The Alternate Base Rate is defined as the greatest of (A) the rate of interest published by the Wall Street Journal, from time to time, as the prime rate, (B) the federal funds rate, plus 0.50 % and (C) the Term SOFR Rate for a one-month tenor, plus 1.00 %.

The Term SOFR Rate is the forward-looking secured overnight financing rate administered by the Federal Reserve Bank of New York or a successor administrator, for the relevant interest period, but in no event shall the Term SOFR Rate be less than 0.00 % per annum.

The Company is also obligated to pay a commitment fee on the undrawn amounts of the Revolving Credit Agreement at an annual rate of 0.10 %.

The Revolving Credit Agreement requires the Company to comply with certain covenants, including covenants that limit or restrict the ability of the Company’s subsidiaries to incur debt and limit or restrict the ability of the Company and its subsidiaries to grant liens and enter into sale and leaseback transactions;

and, in the case of the Company or a guarantor, merge, consolidate, liquidate, dissolve or sell, transfer, lease or otherwise dispose of all or substantially all of the assets of the Company and its subsidiaries, taken as a whole.

As of December 31, 2023 and December 31, 2022, the Company was in compliance with all related covenants.

Derivative Financial Instruments

In the fiscal year ended December 31, 2023, the Company entered into derivative financial instruments to manage foreign exchange risk related to its ongoing business operations with the primary objective of reducing operating income and cash flow volatility associated with fluctuations in foreign exchange rates.

The borrowings under the Revolving Credit Agreement bear interest, at the Company’s option, of either (i) a floating rate per annum equal to a base rate (the “Alternate Base Rate”) plus an applicable margin or (ii) a per annum rate equal to an adjusted term SOFR rate (the “Adjusted Term SOFR Rate”) plus an applicable margin.

The applicable margin for Alternate Base Rate loans will range from 0.00 % to 0.25 %, and the applicable margin for Adjusted Term SOFR Rate loans will range from 0.75 % to 1.25 %, each based on the Company’s credit ratings.

The Revolving Credit Agreement contains customary affirmative covenants and negative covenants (and customary baskets and exceptions with respect thereto) for a credit facility of this size and type and requires the Company to maintain a minimum ratio of consolidated EBITDA to consolidated interest expense of 3.0 to 1.0 as of the last day of each fiscal quarter.

As of December 31, 2024 and December 31, 2023, the Company was in compliance with all related covenants and ratios.

Derivative Financial Instruments and Hedging Activities

The Company did not use any derivative instruments prior to the fiscal year ended December 31, 2023.

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$ 18,508,390 $ 8,783,273

Fair value hedges 3,819,817 —

Derivatives not designated as hedging instruments:

Foreign exchange contracts

$ 23,760,343 $ 8,783,273

As of December 31, 2024, approximately $ 1.0 billion of the Company’s euro–denominated Senior Notes was designated as a hedge of the foreign exchange risk of the Company’s net investment in certain foreign subsidiaries.

No amounts were designated as net investment hedges as of December 31, 2023.

As of December 31, 2024, the carrying amount of the Company's euro-denominated Senior Notes (included in "Long-term debt" on the Company's Consolidated Balance Sheets) which were designated as the hedged items in fair value hedges was approximately $ 3.6 billion.

No amounts were designated as fair value hedges as of December 31, 2023.

See Note 6 Debt for further information on the Company’s debt obligations.

Fair Value of Derivative Contracts

The fair value of the Company’s outstanding derivative instruments were as follows:

The fair value of the Company’s outstanding derivative instruments was as follows:

As of December 31, 2024

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Foreign exchange contracts $ 580,065 $ 406,677 $ 303,425 $ 83

Derivatives not designated as hedging instruments:

Foreign exchange contracts 16,211 — 14,492 —

Total $ 596,276 $ 406,677 $ 317,917 $ 83

As of December 31, 2023

Derivative Assets Derivative Liabilities

Other current assets Other non-current assets Accrued expenses and other liabilities Other non-current liabilities

(in thousands)

Derivatives designated as hedging instruments:

Foreign exchange contracts $ 26,416 $ 4,518 $ 140,089 $ 46,575

Derivatives not designated as hedging instruments:

Foreign exchange contracts — — — —

Total $ 26,416 $ 4,518 $ 140,089 $ 46,575

The Company classifies derivative instruments in the Level 2 category within the fair value hierarchy.

These instruments are valued using industry standard valuation models that use observable inputs such as interest rate yield curves, and forward and spot prices for currencies.

As of December 31, 2023, the pre-tax net accumulated loss on our foreign currency cash flow hedges included in AOCI on the Consolidated Balance Sheets expected to be recognized in earnings within the next 12 months is $ 128 million.

As of December 31, 2024, the pre-tax net accumulated gain on our foreign currency cash flow hedges included in AOCI on the Consolidated Balance Sheets expected to be recognized in earnings within the next 12 months is $ 564 million.

Master Netting Agreements

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The Company also enters into collateral security arrangements with its counterparties that require the parties to post cash collateral when certain contractual thresholds are met.

No cash collateral was received or posted by the Company as of December 31, 2023.

Cash collateral received is presented in “Accrued expenses and other liabilities” representing the Company’s obligation to return counterparty cash collateral.

Cash collateral posted is presented in “Other current assets” representing the Company’s right to reclaim the cash collateral.

The Company does not offset the fair value of its derivative instruments against the fair value of cash collateral posted or received.

The potential offsetting effect to the Company’s derivative assets and liabilities under its master netting agreements and collateral security agreements were as follows:

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Derivative liabilities 318,000 — 318,000 ( 316,320 ) — $ 1,680

Effect of Derivative Instruments on Consolidated Financial Statements

The pre-tax gains (losses) on the Company’s cash flow hedges recognized in AOCI were as follows:

As of December 31, 2023

Gross Amount Not Offset in the Consolidated Balance Sheets

Gross Amount Recognized in the Consolidated Balance Sheets Gross Amount Offset in the Consolidated Balance Sheets Net Amount Presented in the Consolidated Balance Sheets Financial Instruments Collateral Received and Posted Net Amount

(in thousands)

Derivative assets $ 30,934 $ — $ 30,934 $ ( 27,246 ) $ — $ 3,688

Derivative liabilities 186,664 — 186,664 ( 27,246 ) — 159,418

Effect of Derivative and Non-Derivative Instruments on Consolidated Financial Statements

The pre-tax gains (losses) on the Company’s cash flow hedges, fair value hedges, and net investment hedges recognized in AOCI were as follows:

Year Ended December 31,

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Amount included in the assessment of effectiveness $ 1,195,738 $ ( 155,730 ) $ —

Fair value hedges:

Foreign exchange contracts

Amount excluded from the assessment of effectiveness ( 14,334 ) — —

Net investment hedges:

Foreign currency-denominated debt

Amount included in the assessment of effectiveness 32,400 — —

Total $ 1,213,804 $ ( 155,730 ) $ —

(1) No amounts were excluded from the assessment of effectiveness.

No gains or losses on derivative instruments were reclassified from AOCI into the Consolidated Statements of Operations in the year ended December 31, 2023.

The gains (losses) on hedged items and derivative instruments recognized in the Consolidated Statement of Operations were as follows:

Year Ended December 31,

Revenues Cost of Revenues Interest and other income (expense)

(in thousands)

Total amounts presented in the Consolidated Statements of Operations $ 39,000,966 $ 21,038,464 $ 266,776

Gains on derivatives in cash flow hedging relationship

Foreign exchange contracts

Amount of gains reclassified from AOCI 124,010 1,629 —

Gains (losses) on derivatives in fair value hedging relationship

Foreign exchange contracts

Hedged items — — 196,660

Derivatives designated as hedging instruments — — ( 201,239 )

Amount excluded from assessment of effectiveness and recognized in earnings based on amortization approach — — ( 23,567 )

Gains on derivatives not designated as hedging instruments

Foreign exchange contracts — — 63,291

No gains or losses on derivative instruments were reclassified from AOCI into the Consolidated Statements of Operations in the years ended December 31, 2023 and December 31, 2022.

Commitments and Contingencies

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Less than one year $ 11,424,696 $ 10,328,923

Due after one year and through 3 years 8,784,302 9,425,551

Due after 3 years and through 5 years 2,016,358 2,124,307

Due after 5 years 583,766 243,606

Due after one year and through three years 8,113,910 8,784,302

Due after three years and through five years 2,809,834 2,016,358

Due after five years 900,491 583,766

Total content obligations $ 23,248,931 $ 21,713,349

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The Company’s obligations under these agreements may be limited in terms of time or amount, and in some instances, the Company may have recourse against third parties for certain payments.

In addition, the Company has entered into indemnification agreements with its directors and certain of its officers that will require it, among other things, to indemnify

them against certain liabilities that may arise by reason of their status or service as directors or officers.

In addition, the Company has entered into indemnification agreements with its directors and certain of its officers that will require it, among other things, to indemnify them against certain liabilities that may arise by reason of their status or service as directors or officers.

The terms of such obligations vary.

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Stock Option Plan

In June 2020, the Company's stockholders approved the 2020 Stock Plan, which was adopted by the Company's Board of Directors in March 2020 subject to stockholder approval.

The 2020 Stock Plan provides for the grant of incentive stock options to employees and for the grant of non-statutory stock options, stock appreciation rights, restricted stock and restricted stock units to employees, directors and consultants.

A summary of the activities related to the Company’s stock option plans is as follows:

for Grant Options Outstanding

The Netflix, Inc.

2020 Stock Plan is a stockholder-approved plan that provides for the grant of incentive stock options to employees and for the grant of non-statutory stock options, stock appreciation rights, restricted stock and restricted stock units to employees, directors and consultants.

Restricted Stock Unit Awards

The Company grants time-based restricted stock unit (“RSU”) awards and performance-based restricted stock unit (“PSU”) awards to certain executive officers.

RSU awards vest quarterly over a three-year period subject to the executive’s continued employment or service with the Company through the vesting date.

PSU awards have performance periods ranging from one to three years and vest depending on the Company’s achievement of predetermined market-based performance targets.

Stock Option Activity

The following table summarizes the activities related to the Company’s stock options:

Options Outstanding

Shares Weighted- Average Exercise Price

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Cash received from options exercised 832,887 169,990 35,746

The total fair value of stock options that vested during the years ended December 31, 2024 and 2023 was $ 242 million and $ 311 million, respectively.

The Company did not grant any stock options subject to vesting conditions in the year ended December 31, 2022.

Restricted Stock Unit Activity

The following table summarizes the activities related to the Company’s unvested RSUs and PSUs:

Unvested Restricted Stock Units

Shares Weighted-

Grant-Date Fair Value

Balances as of December 31, 2023 — $ —

Granted (1) 159,978 686.36

Vested (1) ( 26,660 ) 562.00

Forfeited — —

Balances as of December 31, 2024 133,318 $ 711.23

(1) Amounts exclude 26,660 incremental PSU awards that will be granted and 53,320 incremental PSU awards that will vest based on the achievement of market-based performance targets during the period presented, but have not been settled as of December 31, 2024.

The total fair value of RSUs that vested during the year ended December 31, 2024 was $ 15 million.

No RSUs or PSUs were granted in the years ended December 31, 2023 and December 31, 2022.

Stock-Based Compensation

Stock options are generally vested in full upon grant date and exercisable for the full ten year contractual term regardless of employment status.

Stock options granted to certain named executive officers vest on the one-year anniversary of the grant date, subject to the employee’s continuous employment or service with the Company through the vesting date.

The following table summarizes the assumptions used to value option grants using the lattice-binomial model and the valuation data:

The following table summarizes total stock-based compensation expense and the related income tax impact:

Year Ended December 31,

2024 2023 2022

Dividend yield — % — % — %

Expected volatility 40 % - 46 %

Risk-free interest rate 3.57 % - 4.56 %

1.71 % - 3.79 %

1.08 % - 1.62 %

Suboptimal exercise factor 4.22 - 4.30

Valuation data:

Weighted-average fair value (per share) $ 211.27 $ 155.88 $ 259.01

Total stock-based compensation expense (in thousands) 339,368 575,452 403,220

Total income tax impact on provision (in thousands) 61,588 127,289 89,642

The Company considers several factors in determining the suboptimal exercise factor, including the historical and estimated option exercise behavior.

The Company calculates expected volatility based solely on implied volatility.

The Company believes that implied volatility of publicly traded options in its common stock is more reflective of market conditions, and given consistently high trade volumes of the options, can reasonably be expected to be a better indicator of expected volatility than historical volatility of its common stock.

In valuing shares issued under the Company’s employee stock option plans, the Company bases the risk-free interest rate on U.S.

Treasury zero-coupon issues with terms similar to the contractual term of the options.

The Company does not anticipate paying any cash dividends in the foreseeable future and therefore uses an expected dividend yield of zero in the option valuation model.

The Company does not use a post-vesting termination rate as options are generally fully vested upon grant date.

The total fair value of stock options that vested during the year ended December 31, 2023 was $ 311 million.

The Company did not grant any stock options subject to vesting conditions in the years ended December 31, 2022 and 2021.

As of December 31, 2023, $ 26 million of total unrecognized compensation cost related to nonvested stock options is expected to be recognized over a weighted-average period of 0.45 years.

(in thousands)

Total stock-based compensation expense $ 272,588 $ 339,368 $ 575,452

Total income tax impact on provision 43,876 61,588 127,289

As of December 31, 2024, $ 46 million of total unrecognized compensation cost related to unvested stock options and RSUs is expected to be recognized over a weighted-average period of 1.4 years.

Stock Repurchases

In March 2021, the Company’s Board of Directors authorized the repurchase of up to $ 5 billion of its common stock, with no expiration date, and in September 2023, the Board of Directors increased the share repurchase authorization by an additional $ 10 billion, also with no expiration date.

In September 2023, the Board of Directors authorized the repurchase of up to $ 10 billion, 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.

Stock repurchases may be effected through open market repurchases in compliance with Rule 10b-18 under the Exchange Act, including through the use of trading plans intended to qualify under Rule 10b5-1 under the Exchange Act, privately-negotiated transactions, accelerated stock repurchase plans, block purchases, or other similar purchase techniques and in such amounts as management deems appropriate.

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The Company may discontinue any repurchases of its common stock at any time without prior notice.

During the year ended December 31, 2023, the Company repurchased 14,513,790 shares for an aggregate amount of $ 6,045 million.

During the year ended December 31, 2024, the Company repurchased 9,861,935 shares 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.

Shares repurchased by the Company are accounted for when the transaction is settled.

As of December 31, 2024, there were no unsettled share repurchases.

Direct costs incurred to acquire the shares are included in the total cost of the shares.

Accumulated Other Comprehensive Income (Loss)

The following table summarizes the changes in accumulated balances of other comprehensive income (loss), net of tax:

The following table summarizes the changes in accumulated balances of other comprehensive income (loss):

Foreign Currency Translation

Adjustments Change in Unrealized Gains (Losses) on Cash Flow Hedges Total

Adjustments Net Investment Hedge Gains (Losses) Change in Unrealized Gains (Losses) on Cash Flow Hedges Change in Unrealized Gains (Losses) on Excluded Component of Fair Value Hedges Change in Unrealized Gains (Losses)

on AFS Securities Tax (Expense) Benefit Total

(in thousands)

Balances as of December 31, 2021 $ ( 40,495 ) $ — $ — $ — $ — $ — $ ( 40,495 )

$ 44,398 $ — $ 44,398

Other comprehensive income (loss) before reclassifications

( 176,811 ) — — — — — ( 176,811 )

Balances as of December 31, 2021

Amounts reclassified from accumulated other comprehensive income (loss)

— — — — — — —

Other comprehensive income (loss) before reclassifications

Net change in accumulated other comprehensive income (loss)

( 176,811 ) — — — — — ( 176,811 )

Balances as of December 31, 2022 ( 217,306 ) — — — — — ( 217,306 )

( 217,306 ) — ( 217,306 )

Other comprehensive income (loss) before reclassifications

113,384 — ( 155,730 ) — — 35,707 ( 6,639 )

Amounts reclassified from accumulated other comprehensive income (loss)

— — — — — — —

Net change in accumulated other comprehensive income (loss)

113,384 — ( 155,730 ) — — 35,707 ( 6,639 )

Balances as of December 31, 2023 ( 103,922 ) — ( 155,730 ) — — 35,707 ( 223,945 )

Other comprehensive income (loss) before reclassifications

( 272,911 ) 32,400 1,195,738 ( 14,334 ) 3,260 ( 279,408 ) 664,745

Amounts reclassified from accumulated other comprehensive income (loss)

— — ( 125,639 ) 23,567 — 23,434 ( 78,638 )

Net change in accumulated other comprehensive income (loss)

( 272,911 ) 32,400 1,070,099 9,233 3,260 ( 255,974 ) 586,107

Balances as of December 31, 2024 $ ( 376,833 ) $ 32,400 $ 914,369 $ 9,233 $ 3,260 $ ( 220,267 ) $ 362,162

The following table summarizes the amounts reclassified from AOCI to the Consolidated Statement of Operations:

Year Ended December 31,

Revenues Cost of Revenues Interest and other income (expense) Provision for Income Taxes Total Reclassifications

(in thousands)

Gains (losses) on derivatives in cash flow hedging relationship

Foreign exchange contracts

Amount of gains (losses) reclassified from AOCI $ 124,010 $ 1,629 $ — $ ( 28,844 ) $ 96,795

Gains (losses) on derivatives in fair value hedging relationship

Foreign exchange contracts

Amount excluded from assessment of effectiveness and recognized in earnings based on amortization approach — — ( 23,567 ) 5,410 ( 18,157 )

Total $ 124,010 $ 1,629 $ ( 23,567 ) $ ( 23,434 ) $ 78,638

No amounts were reclassified from AOCI into the Consolidated Statements of Operations in the years ended December 31, 2023 and 2022.

Income before provision for income taxes was as follows:

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Operating lease liabilities 522,489 516,574

OCI hedging losses — 35,707

Unrealized losses 12,157 26,506

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Operating right-of-use lease assets ( 449,661 ) ( 435,216 )

Unrealized gains — ( 47,283 )

OCI hedging gains ( 220,009 ) —

Acquired intangibles ( 282,187 ) ( 233,433 )

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At December 31, 2024, we have not provided for applicable U.S.

income and foreign withholding taxes on approximately $ 52 million of our foreign undistributed earnings because such earnings are intended to be indefinitely reinvested.

At December 31, 2023, we provided taxes and recorded a deferred tax liability on our undistributed foreign earnings for which we are not indefinitely reinvested.

income and foreign withholding taxes on an immaterial amount of undistributed foreign earnings that we intend to indefinitely reinvest.

For the balance of undistributed earnings for which we are not indefinitely reinvested, we have provided the appropriate taxes.

The unrecognized tax benefits that are not expected to result in payment or receipt of cash within one year are classified as “Other non-current liabilities” and a reduction of deferred tax assets which is classified as "Other non-current assets" in the Consolidated Balance Sheets.

As of December 31, 2023 and 2022, the total amount of gross unrecognized tax benefits was $ 327 million and $ 227 million, respectively, of which $ 188 million and $ 155 million, respectively, if recognized, would favorably impact the Company’s effective tax rate.

As of December 31, 2024 and 2023, the total amount of gross unrecognized tax benefits was $ 432 million and $ 327 million, respectively, of

which $ 251 million and $ 188 million, respectively, if recognized, would favorably impact the Company’s effective tax rate.

The aggregate changes in the Company’s total gross amount of unrecognized tax benefits are summarized as follows:

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The Company includes interest and penalties related to unrecognized tax benefits within the provision for income taxes and in “Other non-current liabilities” in the Consolidated Balance Sheets.

During the years ended December 31, 2023, 2022 and 2021, the Company recorded $ 25 million, $ 2 million, and less than $ 1 million, respectively, of interest and penalties in the provision for income taxes.

During the years ended December 31, 2024, 2023 and 2022, the Company recorded $ 16 million, $ 25 million, and $ 2 million, respectively, net of interest and penalties in the provision for income taxes.

The amount of interest and penalties accrued at December 31, 2024 and 2023 was $ 44 million and $ 28 million, respectively.

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The Company is currently under examination by the IRS for years 2016 through 2018 and is subject to examination for 2019 through 2023.

The foreign and state tax returns for years 2016 through 2022 are subject to examination by various state and foreign jurisdictions.

While the Company is in various stages of inquiry and examination with certain taxing authorities and we believe that our tax positions will more likely than not be sustained, it is nonetheless possible that future obligations related to these matters could arise.

We believe that adequate amounts have been reserved for any adjustments that may ultimately result from an examination.

The Company is also generally subject to examination by various state and foreign jurisdictions for years 2017 through 2023.

While the Company is in various stages of inquiry and examination with certain taxing authorities and believes that its tax positions will more likely than not be sustained, it is nonetheless possible that future obligations related to these matters could arise.

The Company believes that adequate amounts have been reserved for any adjustments that may ultimately result from an examination.

Given the potential outcome of current examinations, it is reasonably possible that the balance of unrecognized tax benefits could significantly change within the next twelve months.

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The Company operates as one operating segment.

The Company's chief operating decision maker ("CODM") is its co-chief executive officers, who review financial information presented on a consolidated basis for purposes of making operating decisions, assessing financial performance and allocating resources.

The Company's chief operating decision maker ("CODM") is its co-chief executive officers, who review financial information presented on a consolidated basis.

The CODM uses consolidated operating margin and net income to assess financial performance and allocate resources.

These financial metrics are used by the CODM to make key operating decisions, such as the determination of the rate at which the Company seeks to grow global operating margin and the allocation of budget between cost of revenues, sales and marketing, technology and development, and general and administrative expenses.

The following table presents selected financial information with respect to the Company’s single operating segment for the years ended December 31, 2024, 2023 and 2022:

Year Ended December 31,

2024 2023 2022

(in thousands)

Revenues $ 39,000,966 $ 33,723,297 $ 31,615,550

Content amortization 15,301,517 14,197,437 14,026,132

Other cost of revenues 5,736,947 5,517,931 5,142,153

Sales and marketing

2,917,554 2,657,883 2,530,502

Technology and development 2,925,295 2,675,758 2,711,041

General and administrative 1,702,039 1,720,285 1,572,891

Operating income 10,417,614 6,954,003 5,632,831

Operating margin 27 % 21 % 18 %

Other income (expense)

Interest expense ( 718,733 ) ( 699,826 ) ( 706,212 )

Interest and other income (expense) (1) 266,776 ( 48,772 ) 337,310

Income before income taxes 9,965,657 6,205,405 5,263,929

Provision for income taxes ( 1,254,026 ) ( 797,415 ) ( 772,005 )

Net income $ 8,711,631 $ 5,407,990 $ 4,491,924

(1) Includes interest income of $ 294 million, $ 281 million and $ 60 million for the years ended December 31, 2024, 2023 and 2022, respectively.

See the consolidated financial statements for other financial information regarding the Company’s operating segment.

revenues were $ 16.1 billion, $ 13.8 billion and $ 13.0 billion for the years ended December 31, 2024, 2023 and 2022, respectively.

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Indenture, dated as of February 5, 2015, by and between the Company and Wells Fargo Bank, National Association, as Trustee.

8-K 001-35727

4.1 February 19, 2014

Indenture, dated as of February 5, 2015, by and between the Company and Wells Fargo Bank, National Association, as Trustee.

8-K 001-35727 4.2 February 5, 2015

Indenture, dated as of February 5, 2015, by and between the Company and Wells Fargo Bank, National Association, as Trustee.

8-K 001-35727 4.2 February 5, 2015

Indenture, dated as of October 27, 2016, by and between the Company and Wells Fargo Bank, National Association, as Trustee.

8-K 001-35727 4.1 October 27, 2016

First Supplemental Indenture, dated as of September 24, 2014, by and between the Company and Wells Fargo Bank, National Association, as Trustee.

10-Q 001-35727 4.7 April 20, 2017

Indenture, dated as of May 2, 2017, by and between the Company and Wells Fargo Bank, National Association, as Trustee.

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8-K 001-35727 4.1 April 28, 2020

Number Exhibit Description Incorporated by Reference Filed

Form File No.

Exhibit Filing Date

Indenture, dated as of April 28, 2020, by and between the Company and Wells Fargo Bank National Association, as Trustee (3.000% Senior Notes due 2025)

8-K 001-35727 4.3 April 28, 2020

Indenture, dated as of July 29, 2024, by and between the Company and Computershare Trust Company, National Association, as Trustee.

S-3 333-281071 4.1 July 29, 2024

Supplemental Indenture, dated as of August 1, 2024, by and between the Company and Computershare Trust Company, National Association, as Trustee.

8-K 001-35727 4.2 August 1, 2024

Description of Registrant's Securities Registered Pursuant to Section 12 of the Securities Exchange Act of 1934

8 unchanged sentences

8-K 001-35727 Item 5.02 January 24, 2018

Number Exhibit Description Incorporated by Reference Filed

Form File No.

Exhibit Filing Date

Amended and Restated Performance Bonus Plan

8-K 001-35727 10.1 December 9, 2022

Amended and Restated Executive Severance and Retention Incentive Plan

8-K 001-35727 10.1 September 10, 2021

Revolving Credit Agreement among the Company, Deutsche bank AG New York Branch, Goldman Sachs Bank USA, JPMorgan Chase Bank, N.A., Morgan Stanley Senior Funding, Inc.

and Wells Fargo Bank, N.A.

and the administrative agent, dated as of July 27, 2017

10-Q 001-35727 10.15 October 18, 2017

First Amendment Agreement, dated as of March 29, 2019, among Netflix, Inc., the Lenders party thereto and Morgan Stanley Senior Funding, Inc., as administrative agent.

8-K 001-35727 10.1 April 1, 2019

Second Amendment Agreement, dated as of June 17, 2021, among Netflix, Inc., the Lenders party thereto and Morgan Stanley Senior Funding, Inc., as administrative agent.

8-K 001-35727 10.1 June 17, 2021

Third Amendment Agreement, dated as of March 6, 2023, among Netflix, Inc., the Lenders party thereto and Morgan Stanley Senior Funding, Inc., as administrative agent.

10-Q 001-35727 10.2 April 21, 2023

Form of Stock Option Agreement under the 2011 Stock Plan

2 unchanged sentences

10-K 001-35727 10.11 January 26, 2023

Form of Stock Option Agreement under the 2020 Stock Plan (Options Subject to Vesting)

8-K 001-35727 10.1 December 23, 2022

Netflix, Inc.

7 unchanged sentences

8-K 001-35727 10.3 December 8, 2023

Executive Severance and Retention Incentive Plan as Amended and Restated effective January 1, 2024

8-K 001-35727 10400 December 8, 2023

Netflix, Inc.

Insider Trading Policy

List of Significant Subsidiaries

2 unchanged sentences

Certification of Co-Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

Number Exhibit Description Incorporated by Reference Filed

Form File No.

Exhibit Filing Date

Certification of Co-Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

3 unchanged sentences

Clawback 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:

54 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 9A. Controls and Procedures