Common-Size Income Statement
Quarterly Data
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- Balance Sheet: Liabilities and Stockholders’ Equity
- Common-Size Balance Sheet: Assets
- Analysis of Profitability Ratios
- Analysis of Liquidity Ratios
- Common Stock Valuation Ratios
- Enterprise Value to EBITDA (EV/EBITDA)
- Price to FCFE (P/FCFE)
- Capital Asset Pricing Model (CAPM)
- Return on Assets (ROA) since 2005
- Current Ratio since 2005
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Netflix Inc., common-size consolidated income statement (quarterly data)
Based on: 10-K (reporting date: 2025-12-31), 10-Q (reporting date: 2025-09-30), 10-Q (reporting date: 2025-06-30), 10-Q (reporting date: 2025-03-31), 10-K (reporting date: 2024-12-31), 10-Q (reporting date: 2024-09-30), 10-Q (reporting date: 2024-06-30), 10-Q (reporting date: 2024-03-31), 10-K (reporting date: 2023-12-31), 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31).
The common-size income statement reveals significant fluctuations in profitability and cost structure over the observed period, spanning from March 2021 to December 2025. Revenue consistency is maintained throughout, always representing 100% of total revenue. However, underlying cost components and resulting income metrics exhibit considerable variability.
- Gross Profit
- Gross profit as a percentage of revenue demonstrated a decline from 46.00% in March 2021 to a low of 32.04% in December 2021. It then experienced a recovery, peaking at 51.93% in June 2025, indicating improved cost management or pricing strategies in later periods. The most recent quarter, December 2025, shows a slight decrease to 45.87%.
- Cost of Revenues
- The cost of revenues exhibited a notable increase as a percentage of revenue, reaching -68.82% in December 2022. This corresponds with the lowest gross profit margin during the observed period. Prior to this, costs were relatively stable around -54% to -58%. A downward trend in cost of revenues is observed in the most recent quarters, reaching -54.13% in December 2025, contributing to the improved gross profit.
- Operating Income
- Operating income mirrored the trends in gross profit, declining sharply to 8.19% in December 2021 before recovering. A peak of 34.07% was reached in June 2025, suggesting enhanced operational efficiency. The final quarter shows a decrease to 24.54%, though still representing a substantial operating margin. The volatility in operating income highlights sensitivity to cost fluctuations.
- Sales and Marketing
- Sales and marketing expenses remained relatively consistent, fluctuating between approximately -6.5% and -10.6% of revenue. A noticeable increase to -9.24% in September 2025 suggests a potential investment in marketing initiatives. Overall, the proportion of revenue allocated to sales and marketing remained within a defined range.
- Technology and Development
- Technology and development expenses were consistently high, ranging from -7.32% to -8.99% of revenue. A slight increase is observed in the later periods, reaching -7.80% in March 2025, potentially reflecting ongoing investment in innovation. These expenses represent a significant portion of revenue.
- General and Administrative
- General and administrative expenses showed a slight decreasing trend over the period, moving from -4.15% to -4.71% and then stabilizing around -4%. This suggests improved efficiency in administrative functions or a deliberate effort to control these costs.
- Net Income
- Net income as a percentage of revenue followed the pattern of operating income, with a low of 7.88% in December 2021 and a high of 28.21% in June 2025. The final quarter shows a decrease to 20.07%. Fluctuations in net income are significantly influenced by changes in operating income, interest expense, and other income/expenses.
- Interest and Other Income/Expense & Other Income/Expense
- These lines demonstrate considerable volatility, with both positive and negative impacts on net income. Notably, other income/expense had a significant negative impact in December 2022 (-6.50%) and September 2025 (-1.57%). These fluctuations suggest the presence of non-recurring items or changes in financial strategies impacting these accounts.
- Provision for Income Taxes
- The provision for income taxes generally tracked net income, with higher percentages during periods of higher profitability. The effective tax rate, as indicated by the provision as a percentage of revenue, fluctuated, but generally remained within a range of -2.38% to -4.89%.
In summary, the period under review was characterized by significant volatility in profitability metrics, largely driven by fluctuations in the cost of revenues. While the company demonstrated a strong recovery in operating and net income in the latter half of the period, recent quarters suggest a potential moderation of these gains. Consistent investment in technology and development, coupled with relatively stable sales and marketing expenses, appears to be a consistent feature of the company’s financial profile.