What changed in this filing

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Item 9A. Controls and Procedures

2026-01-23 compared with 2025-01-27 · 284 added, 178 removed, 1094 unchanged (30% of the section changed)

3 unchanged sentences

Based on that evaluation, our co-Chief Executive Officers and Chief Financial Officer concluded that our disclosure controls and procedures as of the end of the period covered by this Annual Report on Form 10-K were effective in providing reasonable assurance that information required to be disclosed by us in reports that we file or submit under the Exchange Act, is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, and that such information is accumulated and communicated to our management, including our co-Chief Executive Officers and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosures.

Our management, including our co-Chief Executive Officers and Chief Financial Officer, does not expect that our disclosure controls and procedures or our internal controls will prevent all error and all fraud.

A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met.

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Name Title Action Date Adopted Expiration Date Aggregate # of Securities to be Purchased/Sold (1)

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.

Spencer Neumann (2)

Chief Financial Officer Adoption 10/23/2025 12/31/2026 314,880

Greg Peters (3)

Co-CEO and Director Termination 10/30/2025 N/A 1,585,830

Greg Peters (4)

Co-CEO and Director Adoption 10/30/2025 12/31/2029 2,951,230

Ann Mather (5)

Director Adoption 11/7/2025 12/31/2026 23,430

(1) Aggregated shares covered have been adjusted to reflect the effect of the Stock Split.

See Note 1 Organization and Summary of Significant Accounting Policies for further information regarding the Stock Split.

(2) Spencer Neumann, Chief Financial Officer, entered into a pre-arranged stock trading plan pursuant to Rule 10b5-1 on October 23, 2025.

Neumann's plan provides for the potential exercise of vested stock options and the associated sale of up to 314,880 shares of Netflix common stock.

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

(3) On October 30, 2025, 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 October 30, 2024.

The plan provided for the potential exercise and sale of vested stock options, as well as the sale of Performance Share Units (PSUs) that were expected to vest during the term of the 10b5-1 plan (assuming vest at 100% of the target award amount) for up to 1,585,830 shares of Netflix common stock until November 1, 2027 or the earlier completion of all authorized transactions under the plan.

(4) Upon termination of Mr.

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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 2,951,230 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 380,720 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, 2029, 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.

(5) Ann Mather, a member of the Board of Directors, entered into a pre-arranged stock trading plan pursuant to Rule 10b5-1 on November 7, 2025.

Mather's plan provides for the potential exercise of vested stock options and the associated sale of up to 23,430 shares of Netflix common stock.

The plan expires on December 31, 2026, 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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Information regarding our directors and executive officers is incorporated by reference from the information contained under the sections “Proposal One:

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.

Election of Directors,” “Our Company Executive Officers," and "Other Information” 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, which the Company believes is reasonably designed to promote compliance with insider trading laws, rules and regulations, and any listing standards 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.

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Other comprehensive income (loss):

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

Foreign currency translation adjustments, net of income tax benefit (expense) of $ 33 million, $( 7 ) million, and $ 0 , respectively

72,011 ( 247,949 ) 113,384

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

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

( 2,511 ) 2,511 —

Cash flow hedges:

Net unrealized gains (losses) ( 1,071,168 ) 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

Reclassification of net (gains) losses included in net income 68,962 ( 96,795 ) —

Net change, net of income tax benefit (expense) of $ 301 million, $( 246 ) million, and $ 36 million, respectively

( 1,002,206 ) 824,432 ( 120,023 )

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

Net change in unrealized gains (losses) excluded from the assessment of effectiveness, net of income tax benefit (expense) of $ 3 million, $( 2 ) million, and $ 0 , respectively

( 9,838 ) 7,113 —

Total other comprehensive income (loss) ( 942,544 ) 586,107 ( 6,639 )

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Purchases of investments ( 169,965 ) ( 1,742,246 ) ( 504,862 )

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

Proceeds from maturities and sales of investments 1,917,067 — 1,395,165

Net cash provided by (used in) investing activities 1,041,688 ( 2,181,784 ) 541,751

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Effect of exchange rate changes on cash, cash equivalents and restricted cash 386,519 ( 416,331 ) 82,684

Net increase (decrease) in cash, cash equivalents and restricted cash 688,822 1,947,933 ( 884,529 )

Net increase in cash, cash equivalents and restricted cash 1,231,857 688,822 1,947,933

Cash, cash equivalents and restricted cash, beginning of year 7,807,337 7,118,515 5,170,582

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Supplemental disclosure:

Income taxes paid $ 1,641,530 $ 1,154,973 $ 811,720

Interest paid 718,611 674,502 684,504

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Issuance of common stock 19,265,980 168,203 — — — 168,203

Repurchases of common stock ( 145,137,900 ) — ( 6,098,010 ) — — ( 6,098,010 )

Stock-based compensation expense

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— — — — 8,711,631 8,711,631

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

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

Issuance of common stock 48,727,080 834,366 — — — 834,366

Repurchases of common stock ( 98,619,350 ) — ( 6,241,153 ) — — ( 6,241,153 )

Shares withheld related to net share settlement of equity awards

( 132,570 ) — ( 8,285 ) — — ( 8,285 )

Stock-based compensation expense

2 unchanged sentences

— — — — 10,981,201 10,981,201

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

Other comprehensive loss — — — ( 942,544 ) — ( 942,544 )

Issuance of common stock 31,597,695 665,835 — — — 665,835

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(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 approximately 302 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 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.

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Intercompany balances and transactions have been eliminated.

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.

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.

Use of Estimates

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Recently issued accounting pronouncements not yet adopted

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.

ASU 2023-09 is effective for fiscal years beginning after December 15, 2024, with early adoption permitted.

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):

In November 2024, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“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.

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

In December 2025, the FASB issued ASU 2025-10, Government Grants (Topic 832):

Accounting for Government Grants Received by Business Entities , which establishes authoritative guidance on the recognition, measurement, presentation, and disclosure of government grants.

Under ASU 2025-10, government grants are recognized when it is probable that the entity will both comply with the conditions of the grant and the grant will be received.

The ASU provides specific accounting models for grants related to assets and grants related to income, including options to recognize government grants as deferred income or as a reduction of the asset’s cost basis.

The ASU also requires enhanced disclosures regarding the nature of government grants, significant terms and conditions, accounting policies applied, and amounts recognized in the financial statements.

ASU 2025-10 is effective for fiscal years beginning after December 15, 2028, including interim periods within those fiscal years, with early adoption permitted.

The Company is currently evaluating the impact of adopting ASU 2025-10.

In December 2025, the FASB issued ASU 2025-11, Interim Reporting (Topic 270):

Narrow-Scope Improvements , which clarifies the guidance in Topic 270 to improve the consistency of interim financial reporting.

The ASU provides a comprehensive list of required interim disclosures and introduces a disclosure principle requiring entities to disclose events since the end of the last annual reporting period that have a material impact on the entity.

ASU 2025-11 is effective for fiscal years beginning after December 15, 2027, including interim periods within those fiscal years, with early adoption permitted.

The Company is currently evaluating the impact of adopting ASU 2025-11.

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.

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.

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.

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

ASU 2023-09 is effective for fiscal years beginning after December 15, 2024, with early adoption permitted.

The Company adopted ASU 2023-09 for the year ended December 31, 2025, and applied the new disclosure requirements

prospectively to the current annual period.

Prior period disclosures have not been adjusted to reflect the new disclosure requirements.

See Note 11 Income Taxes in the accompanying notes to the consolidated financial statements for further detail.

Cash Equivalents and Short-term Investments

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For licensed content, the Company capitalizes the fee per title and records 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, the Company capitalizes costs associated with the production, including development costs, direct costs and production overhead.

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.

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

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, estimated period of use or 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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In general, tax incentives are realized as cash receipts and may be received prior to or after a title launches on the Company’s service.

Upon a title’s launch, any amounts the Company is eligible for through qualified production spend but has not received, are recognized in “Other current assets” or “Other non-current assets” on the Company’s Consolidated Balance Sheets as receivables.

Any amounts the Company is eligible for through qualified production spend but has not received, are recognized in “Other current assets” or “Other non-current assets” on the Company’s Consolidated Balance Sheets as receivables.

Tax incentives are generally accounted for as a reduction to the cost basis of the Company’s content assets (presented in “Content assets, net”) and reduce content amortization over the life of the title (as presented in “Cost of revenues”) on the Consolidated Statements of Operations.

The Company's business model is subscription based as opposed to a model generating revenues at a specific title level.

Content assets (licensed and produced) are predominantly monetized as a group and therefore are reviewed in 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.

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.

To date, the Company has not identified any such event or changes in circumstances.

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The Company uses its best estimates and assumptions to assign fair value to the tangible and intangible assets acquired and liabilities assumed at the acquisition date.

In addition, uncertain tax positions, tax-related valuation allowances and pre-acquisition contingencies are initially recorded in connection with a business combination as of the acquisition date.

In addition, uncertain tax positions, tax-related valuation allowances and pre-acquisition contingencies of an entity acquired in a business combination are recorded as of the acquisition date.

Property and Equipment

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

Revenues are 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, live events and various other sources.

The Company also earns revenue from advertisements presented on its streaming service, consumer products, live experiences 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, 2025, 2024, and 2023.

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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.

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 CE manufacturers, MVPDs, mobile operators, and ISPs.

Our advertising sales partners include advertising technology providers and advertising agencies.

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

Marketing expenses are expensed as incurred.

Advertising expenses were $ 2,001 million, $ 1,779 million and $ 1,732 million for the years ended December 31, 2025, 2024 and 2023, respectively.

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

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.

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.

Foreign exchange losses were $ 123 million, $ 18 million, and $ 293 million for the years ended

December 31, 2025, 2024, and 2023, respectively.

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

Foreign exchange losses for the years ended December 31, 2025 and December 31, 2024 were net of hedging impacts.

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

See Note 8 Derivative Financial Instruments and Hedging Activities for further information.

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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.

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.

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Revenue Recognition

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.

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.

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 for further information.

United States and Canada (UCAN)

As of/Year Ended December 31,

Year Ended December 31,

2025 2024 2023

(in thousands)

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

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

Paid memberships at end of period (1) 89,625 80,128 74,296

United States and Canada (UCAN) $ 19,957,152 $ 17,359,369 $ 14,873,783

Europe, Middle East, and Africa (EMEA) 14,514,646 12,387,035 10,556,487

As of/Year Ended December 31,

2024 2023 2022

(in thousands)

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

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

Paid memberships at end of period (1) 101,133 88,813 76,729

Latin America (LATAM) 5,357,521 4,839,816 4,446,461

As of/Year Ended December 31,

2024 2023 2022

(in thousands)

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

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

Paid memberships at end of period (1) 53,327 45,997 41,699

Asia-Pacific (APAC) 5,353,717 4,414,746 3,763,727

As of/Year Ended December 31,

2024 2023 2022

(in thousands)

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

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

Paid memberships at end of period (1) 57,541 45,338 38,023

(1) 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.

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.

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.

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.

Total Streaming Revenues $ 45,183,036 $ 39,000,966 $ 33,640,458

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.

As of December 31, 2025, total deferred revenue was $ 1,776 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 $ 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.

Deferred revenue increased $ 255 million from $ 1,521 million as of December 31, 2024 to $ 1,776 million as of December 31, 2025.

Deferred revenue balances may fluctuate due to the number of paid memberships and the price of our memberships.

Earnings per Share

On November 14, 2025, the Company completed the Stock Split to all shareholders of record as of November 10, 2025.

Outstanding share and per-share amounts disclosed for all periods provided have been retroactively adjusted to reflect the effects of the Stock Split.

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

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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:

The computation of earnings per share, as adjusted for the Stock Split, is as follows:

Year Ended December 31,

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$ 2.53 $ 1.98 $ 1.20

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

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

Year Ended December 31,

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Time Deposits (1)

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

594,469 — — 594,469 565,791 28,678 — —

$ 9,067,872 $ — $ — $ 9,067,872 $ 9,033,681 $ 28,678 $ 5,369 $ 144

As of December 31, 2024

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301,374 — — 301,374 264,270 37,104 — —

Government securities 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.

(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.

Other current assets and non-current assets primarily consist of restricted cash for deposits related to self-insurance.

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;

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Produced content (1)

7,708,608 7,612,503 7,051,991

Total $ 16,422,166 $ 15,301,517 $ 14,197,437

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Total operating lease liabilities $ 2,513,001

The Company has additional operating leases for real estate of $ 38 million which have not commenced as of December 31, 2024, and as such, have not been recognized on the Company's Consolidated Balance Sheets.

These operating leases are expected to commence in 2025 with lease terms between 3 and 7 years.

Other Current Assets

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(1) $ 552 million and $ 653 million of receivables related to tax incentives earned on production spend are included in Other as of December 31, 2025 and 2024, respectively.

In December 2025, the Company completed an acquisition which was accounted for as a business combination for a total purchase price of approximately $ 28 million, consisting of cash consideration.

On December 4, 2025, the Company entered into a definitive agreement and plan of merger with Warner Bros.

Discovery, Inc.

(“WBD”), to acquire WBD's streaming and studios businesses, including its film and television studios, HBO Max and HBO (such transaction, the "WBD transaction"), which was then amended by the parties thereto on January 19, 2026 (as so amended and restated, the "Amended and Restated Merger Agreement").

WBD is a leading global media and entertainment company and will separate its Global Linear Networks business, Discovery Global, into a new publicly-traded company prior to the closing of the WBD transaction.

See Note 9 Commitments and Contingencies for further details.

As of December 31, 2025, the Company had aggregate outstanding notes of $ 14,463 million, net of $ 56 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, 2023, the Company had aggregate outstanding notes of $ 14,543 million, net of $ 65 million of issuance costs.

As of December 31, 2024, the Company had aggregate outstanding notes of $ 15,583 million, net of $ 70 million of issuance costs and discounts.

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

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A portion of the outstanding Notes is denominated in foreign currency (comprised of € 4,700 million) and is remeasured into U.S.

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

dollars at each balance sheet date (with remeasurement loss, net of hedging impacts, totaling $ 72 million for the year ended December 31, 2025).

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.

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5.875 % Senior Notes

$ — $ 400 February 2014 March 2024 $ — $ 400

5.875 % Senior Notes

— 800 February 2015 February 2025 — 801

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$ 14,519 $ 15,653 $ 14,951 $ 15,948

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

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

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.

In the year ended December 31, 2025, the Company repaid upon maturity the $ 800 million aggregate principal amount of its 5.875 % Senior Notes, the € 470 million aggregate principal amount of its 3.000 % Senior Notes, and the $ 500 million aggregate principal amount of its 3.625 % 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.

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As of December 31, 2025 and December 31, 2024, the Company was in compliance with all related covenants and ratios.

Commercial Paper Program

In May 2025, the Company established a $ 3 billion commercial paper program (the “Commercial Paper Program”) under which it may issue short-term unsecured commercial paper notes.

Net proceeds from this program may be used for general corporate purposes.

There were no borrowings outstanding under the Commercial Paper Program as of December 31, 2025.

WBD Financing

On December 4, 2025, the Company entered into a bridge commitment letter pursuant to which the commitment parties agreed to provide, subject to the satisfaction of customary closing 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 the Company’s option, to refinance certain indebtedness (the “Bridge Facility Commitments”).

As of December 31, 2025, no amounts have been utilized under the Bridge Facility Commitments and the Bridge Facility Commitments have been reduced on a dollar-for-dollar basis by the amounts of the Transactions Revolving Credit Agreement and the DDTL Credit Agreement described below to $ 34 billion.

On December 19, 2025, the Company entered into a $ 5 billion senior unsecured revolving credit facility (the “Transactions Revolving Credit Agreement”).

Borrowings under the Transactions Revolving Credit Agreement may be used for working capital and general corporate purposes and to finance the purchase price for the WBD transaction, to pay fees, costs and expenses incurred in connection with the WBD transaction and, at the Company’s option, to refinance certain indebtedness.

Revolving loans under the Transactions Revolving Credit Agreement may be borrowed, repaid and reborrowed until the date that is the earliest of (i) the date that is the third anniversary of the date of the consummation of the WBD transaction, (ii) the date the Amended and Restated Merger Agreement is terminated in accordance with its terms and (iii) December 19, 2030, at which time all amounts borrowed must be repaid.

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

The applicable margin for Alternate Base Rate loans will range from 0 % to 0.10 %, and the applicable margin for Term SOFR Rate loans will range from 0.60 % to 1.10 %, each based on the Company’s credit ratings.

The Transactions 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.

The Transactions Revolving Credit Agreement 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, 2025, the Company was in compliance with all related covenants and ratios and no amounts have been borrowed under the Transactions Revolving Credit Agreement.

On December 19, 2025, the Company entered into a senior unsecured delayed draw credit facility (the “DDTL Credit Agreement”).

The DDTL Credit Agreement provides for a two-year $ 10 billion unsecured delayed draw term loan credit facility (the “2Y DDTL Facility”) and a three-year $ 10 billion unsecured delayed draw term loan credit facility (the “3Y DDTL Facility”).

Borrowings under each of the 2Y DDTL Facility and the 3Y DDTL Facility may be used to finance the purchase price for the WBD transaction, to pay fees, costs and expenses incurred in connection with the WBD transaction and, at the Company’s option, to refinance certain indebtedness.

Delayed draw term loans under the DDTL Credit Agreement will bear interest, at the Company’s option, at either (i) the Alternate Base Rate plus an applicable margin or (ii) the Term SOFR Rate plus an applicable margin.

For the 2Y DDTL Facility, the applicable margin for Alternate Base Rate loans will range from 0 % to 0.125 %, and the applicable margin for Term SOFR Rate loans will range from 0.850 % to 1.125 %, each based on the Company’s credit ratings.

For the 3Y DDTL Facility, the applicable margin for Alternate Base Rate loans will range from 0 % to 0.25 %, and the applicable margin for Term SOFR Rate loans will range from 0.95 % to 1.25 %, each based on the Company’s credit ratings.

The DDTL 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.

The DDTL Credit Agreement 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, 2025, the Company was in compliance with all related covenants and ratios and no amounts have been borrowed under the DDTL Credit Agreement.

See Note 9 Commitments and Contingencies and Note 14 Subsequent Event for further information on the financing arrangements the Company has entered into in connection with the WBD transaction.

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

Notional Amount of Derivative Contracts

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1,555,502 1,432,136

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.

$ 25,507,054 $ 23,760,343

As of December 31, 2025 and December 31, 2024, approximately $ 1.9 billion and $ 1.0 billion, respectively, of the Company’s Euro–denominated Senior Notes were designated as hedges of the foreign exchange risk of the Company’s net investment in certain foreign subsidiaries.

As of December 31, 2025 and 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 $ 2.9 billion and $ 3.6 billion, respectively.

See Note 7 Debt for further information on the Company’s debt obligations.

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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, 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.

As of December 31, 2025, 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 $ 275 million.

Master Netting Agreements

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Total amounts presented in the Consolidated Statements of Operations $ 45,183,036 $ 23,275,329 $ 172,459

Gains (losses) on derivatives in cash flow hedging relationship

Foreign exchange contracts

Amount of gains (losses) reclassified from AOCI ( 91,143 ) 1,437 —

Gains (losses) on derivatives in fair value hedging relationship

Foreign exchange contracts

Hedged items — — ( 470,441 )

Derivatives designated as hedging instruments — — 481,416

Amount excluded from assessment of effectiveness and recognized in earnings based on amortization approach — — ( 59,201 )

Losses on derivatives not designated as hedging instruments

Foreign exchange contracts — — ( 97,865 )

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

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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.

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

Commitments and Contingencies

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However, the unknown obligations are expected to be significant.

On December 4, 2025, the Company entered into a definitive agreement and plan of merger with WBD to acquire WBD's streaming and studios businesses, including its film and television studios, HBO Max and HBO, which was then amended by the parties thereto on January 19, 2026, by the Amended and Restated Merger Agreement.

Under the terms of the Amended and Restated Merger Agreement, each WBD stockholder will receive $ 27.75 in cash (as may be adjusted in accordance with the terms of the Amended and Restated Merger Agreement) for each share of WBD common stock outstanding as of immediately prior to the closing of the WBD transaction, for a total equity value of approximately $ 72.0 billion and an enterprise value of approximately $ 82.7 billion (in each case, as of December 4, 2025).

The total equity value and enterprise value of the WBD transaction may fluctuate based on WBD's capitalization as of the closing of the WBD transaction.

The Company expects the WBD transaction to close in 12-18 months from December 4, 2025, subject to receipt of required regulatory approvals, approval of WBD stockholders, the consummation of the separation and distribution of Discovery Global and other customary closing conditions.

The Amended and Restated Merger Agreement provides that, upon termination of the Amended and Restated Merger Agreement under specified circumstances, a termination fee of $ 5.8 billion may be payable by Netflix to WBD.

See Note 7 Debt and Note 14 Subsequent Event for further information on the financing arrangements the Company has entered into in connection with its transaction with WBD.

Legal Proceedings

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The subject matter of non-income tax audits primarily arises from disputes on the tax treatment and tax rate applied to our revenue in certain jurisdictions.

We accrue non-income taxes that may result from examinations by, or any negotiated agreements with, these tax authorities when a loss is probable and reasonably estimable.

We accrue, as operating expenses, non-income taxes that may result from examinations by, or any negotiated agreements with, these tax authorities when a loss is probable and reasonably estimable.

Similar to other U.S.

companies doing business in Brazil, the Company is involved in a number of matters with Brazilian tax authorities regarding non-income tax assessments.

Although the Company believes it has meritorious defenses to these matters, there is inherent complexity and uncertainty with respect to these matters, and the final outcome may be materially different from our expectations.

The current potential exposure with respect to the various issues with Brazilian tax authorities regarding non-income tax assessments is estimated to be approximately $ 400 million, which is expected to increase over time.

companies doing business in Brazil, the Company is involved in a number of matters with the local tax authorities as they pertain to non-income tax assessments.

There is inherent complexity and uncertainty regarding these matters, and the final outcomes may be materially different from our expectations.

During the year ended December 31, 2025, developments in another taxpayer’s judicial proceedings influenced our evaluation of the Company’s most significant non-income tax matter in Brazil and we now believe that it is probable that a loss will be incurred.

The cumulative loss recognized as an operating expense in the third quarter of the current year related to non-income tax assessments with the Brazilian tax authorities was approximately $ 619 million.

We continue to accrue incremental non-income taxes that the Company believes are probable of being assessed.

Guarantees—Indemnification Obligations

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The holders of each share of common stock shall be entitled to one vote per share on all matters to be voted upon by the Company’s stockholders.

Stock Option Plan

Equity Incentive Plans

The Netflix, Inc.

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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.

On October 30, 2025, the Company's Board of Directors approved the Stock Split to all shareholders of record as of November 10, 2025.

The Stock Split was effected on November 14, 2025.

On November 14, 2025, the Company's Board of Directors adopted an amendment to the Company's Amended and Restated Certificate of Incorporation, to proportionately increase the number of shares of the Company's authorized common stock from 4,990,000,000 to 49,900,000,000 .

References made to share or per-share amounts disclosed for all periods presented have been retroactively adjusted to reflect the effects of the Stock Split.

Stock Option Activity

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

The following table summarizes the activities related to the Company’s stock options, as adjusted for the Stock Split:

Options Outstanding

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Balances as of December 31, 2025 127,679,804 $ 36.07 4.79 $ 7,430,160

Vested and expected to vest as of December 31, 2024

15,419,002 $ 312.48 5.16 $ 8,925,315

Exercisable as of December 31, 2024

Vested and exercisable as of December 31, 2025

127,679,804 $ 36.07 4.79 $ 7,430,160

The aggregate intrinsic value in the table above represents the total pretax intrinsic value (the difference between the Company’s closing stock price on the last trading day of 2024 and the exercise price, multiplied by the number of in-the-money options) that would have been received by the option holders had all option holders exercised their options on the last trading day of 2024.

The aggregate intrinsic value in the table above represents the total pretax intrinsic value (the difference between the Company’s closing stock price on the last trading day of 2025 and the exercise price, multiplied by the number of in-the-money options) that would have been

received by the option holders had all option holders exercised their options on the last trading day of 2025.

This amount changes based on the fair market value of the Company’s common stock.

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Cash received from options exercised 666,965 832,887 169,990

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.

The total fair value of stock options that vested during the years ended December 31, 2025, 2024 and 2023 was $ 251 million, $ 242 million and $ 311 million, respectively.

Restricted Stock Unit Activity

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

The following table summarizes the activities related to the Company’s unvested RSUs and PSUs, as adjusted for the Stock Split:

Unvested Restricted Stock Units

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Balances as of December 31, 2023 — $ —

Granted (1) 159,978 686.36

Vested (1) ( 26,660 ) 562.00

1,599,780 68.64

( 266,600 ) 56.20

Forfeited — —

Balances as of December 31, 2024 1,333,180 $ 71.12

(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.

1,227,850 111.18

( 959,450 ) 76.48

Forfeited ( 16,320 ) 93.12

Balances as of December 31, 2025 1,585,260 $ 98.68

(1) Amounts exclude 264,300 incremental PSU awards that will be granted and 528,600 incremental PSU awards that will vest based on the achievement of market-based performance targets during the performance period ended December 31, 2025, but have not been settled as of December 31, 2025.

The total fair value of RSUs that vested during the year ended December 31, 2025 and December 31, 2024 was $ 52 million and $ 15 million, respectively.

No RSUs or PSUs were granted in the year ended December 31, 2023.

Stock-Based Compensation

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Total income tax impact on provision 54,338 43,876 61,588

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.

As of December 31, 2025, $ 47 million of total unrecognized compensation cost related to unvested RSUs and PSUs is expected to be recognized over a weighted-average period of 1.53 years.

Stock Repurchases

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.

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

transactions, accelerated stock repurchase plans, block purchases, or other similar purchase techniques and in such amounts as management deems appropriate.

The Company is not obligated to repurchase any specific number of shares, and the timing and actual number of shares repurchased will depend on a variety of factors, including the Company’s stock price, general economic, business and market conditions, and alternative investment opportunities.

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

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).

During the year ended December 31, 2025, the Company repurchased 86,536,215 shares 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.

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Balances as of December 31, 2025 $ ( 193,615 ) $ ( 112,256 ) $ ( 389,289 ) $ ( 3,565 ) $ — $ 118,343 $ ( 580,382 )

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

The following tables summarize the amounts reclassified from AOCI to the Consolidated Statement of Operations:

Year Ended December 31,

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(in thousands)

Gains (losses) on available-for-sale securities

Amount of gains (losses) reclassified from AOCI $ — $ — $ 121 $ ( 23 ) $ 98

Gains (losses) on derivatives in cash flow hedging relationship

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Total $ ( 91,143 ) $ 1,437 $ ( 59,080 ) $ 34,497 $ ( 114,289 )

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

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 year ended December 31, 2023.

Income before provision for income taxes was as follows:

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Provision for income taxes $ 1,741,351 $ 1,254,026 $ 797,415

A reconciliation of the provision for income taxes to the amount computed by applying the 21% statutory Federal income tax rate to income before income taxes is as follows:

A reconciliation of the provision for income taxes to the amount computed by applying the 21 % statutory U.S.

federal income tax rate to income before income taxes after the adoption of ASU 2023-09 is as follows:

Year Ended December 31,

(in thousands) Percent

Statutory Rate $ 2,671,734 21.0 %

State and Local Income Taxes (1)

191,271 1.5 %

Foreign Tax Effects

Withholding tax on services 238,233 1.9 %

Others ( 77,189 ) ( 0.6 ) %

Other foreign jurisdictions 23,290 0.2 %

Effect of Cross-Border Tax Laws

Foreign-derived intangible income ( 656,828 ) ( 5.2 ) %

Foreign tax credit for withholding taxes ( 292,148 ) ( 2.3 ) %

Other 32,815 0.3 %

Research and development tax credits ( 184,709 ) ( 1.5 ) %

Other ( 9,748 ) ( 0.1 ) %

Changes in Valuation Allowances ( 8,615 ) ( 0.1 ) %

Nontaxable and Nondeductible items

Share-based payment awards ( 393,156 ) ( 3.1 ) %

Others 80,904 0.6 %

Changes in Unrecognized Tax Benefits 130,400 1.0 %

Other Adjustments ( 4,903 ) 0.1 %

Effective Tax Rate $ 1,741,351 13.7 %

(1) The states and local jurisdictions that contribute to the majority (greater than 50%) of the tax effect in this category include New York state and city, California, Illinois, New Jersey, and New Mexico.

A reconciliation of the provision for income taxes to the amount computed by applying the 21 % statutory U.S.

federal income tax rate to income before income taxes for years prior to the adoption of ASU 2023-09 is as follows:

Year Ended December 31,

(in thousands)

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Net deferred tax assets $ 1,954,803 $ 1,177,558

As of December 31, 2024, for tax return purposes, the Company had $ 694 million of California R&D tax credit carryforwards which can be carried forward indefinitely, $ 943 million of state net operating loss carryforwards which will begin to expire in 2026, $ 41 million of foreign tax credit carryforwards which will begin to expire in 2033, and $ 420 million of foreign net operating loss carryforwards which will begin to expire in 2025.

As of December 31, 2025, for tax return purposes, the Company had $ 823 million of California R&D tax credit carryforwards which can be carried forward indefinitely, $ 1,018 million of state net operating loss carryforwards, which will begin to expire in 2029, $ 48 million of U.S.

foreign tax credit carryforwards which will begin to expire in 2033, $ 190 million of foreign net operating loss carryforwards which will begin to expire in 2026 and $ 51 million of foreign local tax credit carryforwards, which can be carried forward indefinitely.

In evaluating its ability to realize the net deferred tax assets, the Company considered all available positive and negative evidence, including its past operating results and the forecast of future market growth, forecasted earnings, future taxable income, and prudent and feasible tax planning strategies.

As of December 31, 2024, the valuation allowance of $ 540 million was primarily related to California R&D tax credits, state net operating loss carryforwards, and foreign tax credits that the Company does not expect to realize.

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

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.

As of December 31, 2025, the valuation allowance of $ 618 million was primarily related to California R&D tax credits, state net operating loss carryforwards, and U.S.

foreign tax credits that the Company does not expect to realize.

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, 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.

As of December 31, 2025 and 2024, the total amount of gross unrecognized tax benefits was $ 566 million and $ 432 million, respectively, of which $ 336 million and $ 251 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, 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.

During the years ended December 31, 2025, 2024 and 2023, the Company recorded $ 38 million, $ 16 million, and $ 25 million, respectively, of net interest and penalties in the provision for income taxes.

The amount of interest and penalties accrued at December 31, 2025 and 2024 was $ 82 million and $ 44 million, respectively.

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federal, state and foreign tax returns.

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

The Company is currently under examination by the IRS for years 2016 through 2022 and is subject to examination for 2023 and 2024.

The Company is also generally subject to examination by various state and foreign jurisdictions for years 2018 through 2024.

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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.

However, an estimate of the range of reasonably possible adjustments cannot be made at this time.

The amounts of cash income taxes paid by the Company were as follows:

Year Ended December 31,

(in thousands)

Federal $ 1,120,172

State and local 273,976

Brazil 275,106

Korea 195,302

All other foreign 355,828

Income taxes, net of amounts refunded $ 2,220,384

The amount of cash income taxes paid by the Company during the years ended December 31, 2024 and 2023 was $ 1,642 million and $ 1,155 million, respectively.

Employee Benefit Plan

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Interest and other income (expense) (1)

172,459 266,776 ( 48,772 )

Income before income taxes 12,722,552 9,965,657 6,205,405

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International 1,136,034 926,238

Subsequent Event

On January 19, 2026, the Company entered into the Amended and Restated Merger Agreement, which amended and restated in its entirety the agreement and plan of merger entered into with WBD and the other parties thereto on December 4, 2025.

See Note 6 Acquisitions and Note 9 Commitments and Contingencies for further information.

Also on January 19, 2026, in connection with the Amended and Restated Merger Agreement, the Company entered into a bridge facility incremental commitments agreement (the “Incremental Commitments Agreement”).

The Incremental Commitments Agreement increased the existing commitments under the Company’s bridge commitment letter, dated as of December 4, 2025, from $ 34 billion to $ 42.2 billion of senior unsecured bridge term loan commitments for the purpose of financing the purchase price under the Amended and Restated Merger Agreement, paying certain other fees, costs and expenses incurred in connection with the transaction with WBD and, at the Company’s option, refinancing certain indebtedness.

EXHIBIT INDEX

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Exhibit Filing Date

Restated Certificate of Incorporation

Amended and Restated Agreement and Plan of Merger, dated as of January 19, 2026, by and among Netflix, Inc., Nightingale Sub, Inc., Warner Bros.

Discovery, Inc.

and New Topco 25, Inc.

2.1 January 20, 2026

Amended and Restated Certificate of Incorporation

8-K 001-35727 3.1 June 8, 2022

Certificate of Amendment of Amended and Restated Certificate of Incorporation

3.1 November 14, 2025

Amended and Restated Bylaws

2 unchanged sentences

S-1/A 333-83878 4.1 April 16, 2002

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.

18 unchanged sentences

8-K 001-35727 4.3 October 25, 2019

Indenture, dated as of April 28, 2020, by and between the Company and Wells Fargo Bank National Association, as Trustee (3.625% Senior Notes due 2025)

8-K 001-35727 4.1 April 28, 2020

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.

2 unchanged sentences

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

10-K 001-35727 4.18 January 26, 2023

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

Form of Indemnification Agreement entered into by the registrant with each of its executive officers and directors

1 unchanged sentence

2011 Stock Plan

Def 14A 000-49802 A April 20, 2011

2020 Stock Plan

Def 14A 001-35727 A April 22, 2020

Description of Director Equity Compensation Plan

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

2 unchanged sentences

10-K 001-35727 10.11 January 27, 2022

Number Exhibit Description Incorporated by Reference Filed

Form File No.

Exhibit Filing Date

Form of Stock Option Agreement under the 2020 Stock Plan

12 unchanged sentences

Netflix, Inc.

Executive Officer Severance Plan, as Amended Effective as of January 1, 2026

8-K 001-35727 10.1 November 4, 2025

Form Consent Letter to Amendment of the Netflix, Inc.

Executive Officer Severance Plan

10.2 November 4, 2025

Form of Award Amendment Consent Letter

10.3 November 4, 2025

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.

10.1 December 5, 2025

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.

001-35727 10.1 December 22, 2025

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.

001-35727 10.2 December 22, 2025

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.

10.1 January 20, 2026

Netflix, Inc.

Insider Trading Policy

9 unchanged sentences

10-K 001-35727 97.1 January 26, 2024

Number Exhibit Description Incorporated by Reference Filed

Form File No.

Exhibit 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:

3 unchanged sentences

† 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.

Netflix agrees to furnish supplementally a copy of any omitted annexes, schedules or exhibits to the SEC upon request.

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.

23 unchanged sentences

/ S / R EED H ASTINGS

Executive Chairman and Director January 27, 2025

Chairman and Director January 23, 2026

Reed Hastings

5 unchanged sentences

Mathias Döpfner

/ S / T IMOTHY M.

Director January 27, 2025

/ S / J AY C.

7 unchanged sentences

Director January 23, 2026

/ S / E LINOR M ERTZ

Director January 23, 2026

/ S / S USAN R ICE

5 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