EVA is registered trademark of Stern Stewart.

Economic value added or economic profit is the difference between revenues and costs,where costs include not only expenses, but also cost of capital.

Economic Profit
Net Operating Profit after Taxes (NOPAT)
Cash Operating Taxes
Invested Capital
Cost of Capital
Economic Spread Ratio
Economic Profit Margin

Netflix Inc., economic profit calculation

US$ in thousands

12 months ended:	Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Net operating profit after taxes (NOPAT)¹	8,600,341)	5,437,546)	4,988,408)	6,078,640)	3,693,653)
Cost of capital²	16.98%	16.65%	16.27%	16.06%	16.45%
Invested capital³	40,712,328)	37,926,586)	37,782,560)	34,785,312)	29,762,011)

Economic profit⁴	1,686,707)	(876,341)	(1,158,272)	491,229)	(1,200,769)

Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).

¹ NOPAT. See details »

² Cost of capital. See details »

³ Invested capital. See details »

⁴ 2024 Calculation
Economic profit = NOPAT – Cost of capital × Invested capital
= 8,600,341 – 16.98% × 40,712,328 = 1,686,707

Download chart

Item	Description	The company
Economic profit	Economic profit is a measure of corporate performance computed by taking the spread between the return on invested capital and the cost of capital, and multiplying by the invested capital.	Netflix Inc. economic profit increased from 2022 to 2023 and from 2023 to 2024.

Netflix Inc., NOPAT calculation

US$ in thousands

12 months ended:	Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Net income	8,711,631)	5,407,990)	4,491,924)	5,116,228)	2,761,395)
Deferred income tax expense (benefit)¹	(591,370)	(542,978)	(134,527)	199,519)	70,066)
Increase (decrease) in deferred revenue²	77,844)	178,308)	55,319)	91,350)	193,247)
Increase (decrease) in equity equivalents³	(513,526)	(364,670)	(79,208)	290,869)	263,313)
Interest expense	718,733)	699,826)	706,212)	765,620)	767,499)
Interest expense, operating lease liability⁴	84,426)	80,194)	82,512)	84,434)	79,267)
Adjusted interest expense	803,159)	780,020)	788,724)	850,054)	846,766)
Tax benefit of interest expense⁵	(168,663)	(163,804)	(165,632)	(178,511)	(177,821)
Adjusted interest expense, after taxes⁶	634,496)	616,216)	623,092)	671,543)	668,945)
Interest income	(294,000)	(281,000)	(60,000)	—)	—)
Investment income, before taxes	(294,000)	(281,000)	(60,000)	—)	—)
Tax expense (benefit) of investment income⁷	61,740)	59,010)	12,600)	—)	—)
Investment income, after taxes⁸	(232,260)	(221,990)	(47,400)	—)	—)
Net operating profit after taxes (NOPAT)	8,600,341)	5,437,546)	4,988,408)	6,078,640)	3,693,653)

Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).

¹ Elimination of deferred tax expense. See details »

² Addition of increase (decrease) in deferred revenue.

³ Addition of increase (decrease) in equity equivalents to net income.

⁴ 2024 Calculation
Interest expense on capitalized operating leases = Operating lease liability × Discount rate
= 2,412,170 × 3.50% = 84,426

⁵ 2024 Calculation
Tax benefit of interest expense = Adjusted interest expense × Statutory income tax rate
= 803,159 × 21.00% = 168,663

⁶ Addition of after taxes interest expense to net income.

⁷ 2024 Calculation
Tax expense (benefit) of investment income = Investment income, before tax × Statutory income tax rate
= 294,000 × 21.00% = 61,740

⁸ Elimination of after taxes investment income.

Download chart

Item	Description	The company
NOPAT	Net operating profit after taxes is income from operations, but after removement of taxes calculated on cash basis that are relevant to operating income.	Netflix Inc. NOPAT increased from 2022 to 2023 and from 2023 to 2024.

Netflix Inc., cash operating taxes calculation

US$ in thousands

12 months ended:	Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Provision for income taxes	1,254,026)	797,415)	772,005)	723,875)	437,954)
Less: Deferred income tax expense (benefit)	(591,370)	(542,978)	(134,527)	199,519)	70,066)
Add: Tax savings from interest expense	168,663)	163,804)	165,632)	178,511)	177,821)
Less: Tax imposed on investment income	61,740)	59,010)	12,600)	—)	—)
Cash operating taxes	1,952,319)	1,445,187)	1,059,564)	702,867)	545,709)

Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).

Download chart

Item	Description	The company
Cash operating taxes	Cash operating taxes are estimated by adjusting income tax expense for changes in deferred taxes and tax benefit from the interest deduction.	Netflix Inc. cash operating taxes increased from 2022 to 2023 and from 2023 to 2024.

Netflix Inc., invested capital calculation (financing approach)

US$ in thousands

	Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Short-term debt	1,784,453)	399,844)	—)	699,823)	499,878)
Long-term debt	13,798,351)	14,143,417)	14,353,076)	14,693,072)	15,809,095)
Operating lease liability¹	2,412,170)	2,430,113)	2,578,488)	2,723,675)	2,201,853)
Total reported debt & leases	17,994,974)	16,973,374)	16,931,564)	18,116,570)	18,510,826)
Stockholders’ equity	24,743,567)	20,588,313)	20,777,401)	15,849,248)	11,065,240)
Net deferred tax (assets) liabilities²	(1,177,558)	(874,550)	(261,541)	(148,095)	(589,091)
Deferred revenue³	1,520,813)	1,442,969)	1,264,661)	1,209,342)	1,117,992)
Equity equivalents⁴	343,255)	568,419)	1,003,120)	1,061,247)	528,901)
Accumulated other comprehensive (income) loss, net of tax⁵	(362,162)	223,945)	217,306)	40,495)	(44,398)
Adjusted stockholders’ equity	24,724,660)	21,380,677)	21,997,827)	16,950,990)	11,549,743)
Capital work-in-progress⁶	(228,300)	(406,492)	(235,555)	(282,248)	(298,558)
Short-term investments⁷	(1,779,006)	(20,973)	(911,276)	—)	—)
Invested capital	40,712,328)	37,926,586)	37,782,560)	34,785,312)	29,762,011)

Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).

¹ Addition of capitalized operating leases.

² Elimination of deferred taxes from assets and liabilities. See details »

³ Addition of deferred revenue.

⁴ Addition of equity equivalents to stockholders’ equity.

⁵ Removal of accumulated other comprehensive income.

⁶ Subtraction of capital work-in-progress.

⁷ Subtraction of short-term investments.

Download chart

Item	Description	The company
Invested capital	Capital is an approximation of the economic book value of all cash invested in going-concern business activities.	Netflix Inc. invested capital increased from 2022 to 2023 and from 2023 to 2024.

Netflix Inc., cost of capital calculations

Dec 31, 2024

	Capital (fair value)¹	Weights					Cost of capital
Equity²	415,732,848)	415,732,848)	÷	434,093,018)	=	0.96	0.96	×	17.57%	=	16.83%
Senior Notes³	15,948,000)	15,948,000)	÷	434,093,018)	=	0.04	0.04	×	4.76% × (1 – 21.00%)	=	0.14%
Operating lease liability⁴	2,412,170)	2,412,170)	÷	434,093,018)	=	0.01	0.01	×	3.50% × (1 – 21.00%)	=	0.02%
Total:	434,093,018)					1.00					16.98%

Based on: 10-K (reporting date: 2024-12-31).

¹ US$ in thousands

² Equity. See details »

³ Senior Notes. See details »

⁴ Operating lease liability. See details »

Dec 31, 2023

	Capital (fair value)¹	Weights					Cost of capital
Equity²	246,854,722)	246,854,722)	÷	264,302,835)	=	0.93	0.93	×	17.57%	=	16.41%
Senior Notes³	15,018,000)	15,018,000)	÷	264,302,835)	=	0.06	0.06	×	4.73% × (1 – 21.00%)	=	0.21%
Operating lease liability⁴	2,430,113)	2,430,113)	÷	264,302,835)	=	0.01	0.01	×	3.30% × (1 – 21.00%)	=	0.02%
Total:	264,302,835)					1.00					16.65%

Based on: 10-K (reporting date: 2023-12-31).

¹ US$ in thousands

² Equity. See details »

³ Senior Notes. See details »

⁴ Operating lease liability. See details »

Dec 31, 2022

	Capital (fair value)¹	Weights					Cost of capital
Equity²	162,493,678)	162,493,678)	÷	179,155,166)	=	0.91	0.91	×	17.57%	=	15.94%
Senior Notes³	14,083,000)	14,083,000)	÷	179,155,166)	=	0.08	0.08	×	4.75% × (1 – 21.00%)	=	0.29%
Operating lease liability⁴	2,578,488)	2,578,488)	÷	179,155,166)	=	0.01	0.01	×	3.20% × (1 – 21.00%)	=	0.04%
Total:	179,155,166)					1.00					16.27%

Based on: 10-K (reporting date: 2022-12-31).

¹ US$ in thousands

² Equity. See details »

³ Senior Notes. See details »

⁴ Operating lease liability. See details »

Dec 31, 2021

	Capital (fair value)¹	Weights					Cost of capital
Equity²	171,680,533)	171,680,533)	÷	192,434,208)	=	0.89	0.89	×	17.57%	=	15.68%
Senior Notes³	18,030,000)	18,030,000)	÷	192,434,208)	=	0.09	0.09	×	4.75% × (1 – 21.00%)	=	0.35%
Operating lease liability⁴	2,723,675)	2,723,675)	÷	192,434,208)	=	0.01	0.01	×	3.10% × (1 – 21.00%)	=	0.03%
Total:	192,434,208)					1.00					16.06%

Based on: 10-K (reporting date: 2021-12-31).

¹ US$ in thousands

² Equity. See details »

³ Senior Notes. See details »

⁴ Operating lease liability. See details »

Dec 31, 2020

	Capital (fair value)¹	Weights					Cost of capital
Equity²	238,543,388)	238,543,388)	÷	259,550,241)	=	0.92	0.92	×	17.57%	=	16.15%
Senior Notes³	18,805,000)	18,805,000)	÷	259,550,241)	=	0.07	0.07	×	4.75% × (1 – 21.00%)	=	0.27%
Operating lease liability⁴	2,201,853)	2,201,853)	÷	259,550,241)	=	0.01	0.01	×	3.60% × (1 – 21.00%)	=	0.02%
Total:	259,550,241)					1.00					16.45%

Based on: 10-K (reporting date: 2020-12-31).

¹ US$ in thousands

² Equity. See details »

³ Senior Notes. See details »

⁴ Operating lease liability. See details »

Netflix Inc., economic spread ratio calculation, comparison to benchmarks

	Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Selected Financial Data (US$ in thousands)
Economic profit¹	1,686,707)	(876,341)	(1,158,272)	491,229)	(1,200,769)
Invested capital²	40,712,328)	37,926,586)	37,782,560)	34,785,312)	29,762,011)
Performance Ratio
Economic spread ratio³	4.14%	-2.31%	-3.07%	1.41%	-4.03%
Benchmarks
Economic Spread Ratio, Competitors⁴
Alphabet Inc.	26.29%	19.64%	11.23%	30.54%	13.55%
Comcast Corp.	-1.24%	-3.12%	-7.59%	-2.58%	-4.22%
Meta Platforms Inc.	17.72%	10.62%	4.29%	26.69%	17.88%
Walt Disney Co.	-11.50%	-13.11%	-10.95%	-13.79%	-16.05%

Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).

¹ Economic profit. See details »

² Invested capital. See details »

³ 2024 Calculation
Economic spread ratio = 100 × Economic profit ÷ Invested capital
= 100 × 1,686,707 ÷ 40,712,328 = 4.14%

⁴ Click competitor name to see calculations.

Download chart

Performance ratio	Description	The company
Economic spread ratio	The ratio of economic profit to invested capital, also equal to the difference between return on invested capital (ROIC) and cost of capital.	Netflix Inc. economic spread ratio improved from 2022 to 2023 and from 2023 to 2024.

Netflix Inc., economic profit margin calculation, comparison to benchmarks

	Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Selected Financial Data (US$ in thousands)
Economic profit¹	1,686,707)	(876,341)	(1,158,272)	491,229)	(1,200,769)

Revenues	39,000,966)	33,723,297)	31,615,550)	29,697,844)	24,996,056)
Add: Increase (decrease) in deferred revenue	77,844)	178,308)	55,319)	91,350)	193,247)
Adjusted revenues	39,078,810)	33,901,605)	31,670,869)	29,789,194)	25,189,303)
Performance Ratio
Economic profit margin²	4.32%	-2.58%	-3.66%	1.65%	-4.77%
Benchmarks
Economic Profit Margin, Competitors³
Alphabet Inc.	17.07%	12.10%	8.02%	20.26%	10.78%
Comcast Corp.	-2.16%	-5.40%	-13.41%	-5.08%	-9.11%
Meta Platforms Inc.	17.86%	11.11%	3.74%	20.96%	16.82%
Walt Disney Co.	-20.93%	-25.59%	-22.55%	-35.15%	-43.16%

Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).

¹ Economic profit. See details »

² 2024 Calculation
Economic profit margin = 100 × Economic profit ÷ Adjusted revenues
= 100 × 1,686,707 ÷ 39,078,810 = 4.32%

³ Click competitor name to see calculations.

Download chart

Performance ratio	Description	The company
Economic profit margin	The ratio of economic profit to sales. It is the company profit margin covering income efficiency and asset management. Economic profit margin is not biased in favor of capital-intensive business models, because any added capital is a cost to the economic profit margin.	Netflix Inc. economic profit margin improved from 2022 to 2023 and from 2023 to 2024.

Netflix Inc. (NASDAQ:NFLX)

Economic Value Added (EVA)

Economic Profit

Net Operating Profit after Taxes (NOPAT)

Cash Operating Taxes

Invested Capital

Cost of Capital

Economic Spread Ratio

Economic Profit Margin