Netflix Inc. (NASDAQ:NFLX)

Payables Turnover

The payables turnover ratio demonstrates notable fluctuations over the periods observed. Beginning with a value of 23.28 in the earliest available quarter, the ratio increased to a peak of 37.07 by the end of 2023. Throughout the quarters, the ratio fluctuated between lows around 20.7 and highs above 36, indicating variable efficiency in settling payables. The later quarters show a slight moderation, with values generally remaining above 30, except for a dip toward 23.38 in early 2025. This variability suggests shifting purchasing or payment strategies affecting how frequently payables are turned over.

Working Capital Turnover

This metric exhibits extreme volatility, with values ranging from single digits to peaks as high as 91.06. After starting at 12.78, the ratio rises gradually and then surges dramatically from mid-2021 through early 2022, indicating a temporary but significant improvement in the use of working capital to generate revenue. Subsequently, the ratio declines sharply and stabilizes at lower levels, fluctuating mostly between 11 and 31, with some intermittent spikes. The pattern suggests periods of either rapid revenue growth relative to working capital or changes in working capital composition that impact turnover efficiency.

Average Payables Payment Period

The average payables payment period remains relatively stable across the quarters, generally oscillating between 10 and 16 days. Initial values start around 16 days, decreasing to approximately 13–14 days and even 10 days during some quarters. Towards the end of the timeline, the period mostly stabilizes around 11 days, with minor variation. This consistency indicates a steady approach to payment timing, with modest efforts to optimize payables duration over time.

The cost of revenues exhibits a generally increasing trend over the entire period from March 31, 2020, to March 31, 2025. There are fluctuations in the quarterly values, with occasional dips such as between December 31, 2022, and June 30, 2023, followed by increases in subsequent quarters. The highest cost of revenues is observed in December 31, 2024, reaching 5,767,364 thousand US dollars, indicating rising expenses associated with generating revenue over time.

Accounts payable show variability across quarters with no consistent upward or downward pattern. The values fluctuate significantly, for example, there is a peak at December 31, 2021 (837,483 thousand US dollars), followed by a decrease and then an increase again reaching a notable high at March 31, 2025 (899,909 thousand US dollars). This suggests that the company’s short-term liabilities related to suppliers and creditors vary substantially, likely influenced by operational cycles and procurement needs.

The payables turnover ratio illustrates fluctuations among quarters where data is available. The values range approximately from 20.7 to 37.07, indicating varying efficiency in managing payables. A higher turnover ratio in some quarters, such as September 30, 2021 (37.07), suggests quicker payments to suppliers, while lower values, for example December 31, 2020 (20.7), imply slower payment cycles. The ratio does not present a steady trend but reflects operational dynamics in managing obligations over the period.

Summary of Key Observations

Cost of revenues consistently increases over the observed periods with some short-term dips, indicating rising costs to generate revenue.

Accounts payable fluctuate substantially without a clear trend, highlighting variability in short-term liabilities and payment timings.

Payables turnover ratio alternates between higher and lower values, demonstrating inconsistency in payment efficiency toward suppliers.

The analysis of financial trends reveals several notable patterns related to working capital, revenues, and working capital turnover over the reported periods.

Working Capital

Working capital figures fluctuate significantly throughout the periods. Initially, there is a negative working capital value at March 31, 2020, which turns positive in subsequent quarters with peaks around early 2021. However, a steep decline is observed again towards the end of 2021, where working capital turns negative. Subsequently, working capital recovers and exhibits positive values with some volatility, notably experiencing another negative dip mid-2024 before rising again towards early 2025. These fluctuations indicate variability in the company’s short-term liquidity and operational efficiency across quarters.

Revenues

Revenues show a consistent upward trend across all periods, increasing steadily from approximately 5.77 billion to over 10.54 billion US dollars by the first quarter of 2025. This steady growth implies a strong and expanding operational performance, reflecting increasing sales or service income. There are minor short-term fluctuations, but the overall trajectory is clearly positive with revenues nearly doubling over the span of five years.

Working Capital Turnover

The working capital turnover ratio, available for later periods, demonstrates high variability. The ratio begins quite high in the available data with a peak exceeding 90, followed by sharp declines and rises. Such a wide range suggests fluctuating efficiency in utilizing working capital to generate revenues. Periods of very high turnover may indicate efficient use of working capital, whereas sharp declines might point to temporary inefficiencies or changes in operational structure. The inconsistency in this metric underscores volatility in working capital management relative to revenue generation.

In summary, the company experienced significant swings in working capital, but a steady increase in revenue line suggesting business growth. The working capital turnover ratio reflects pronounced variability in operational efficiency at different times, highlighting areas requiring monitoring to sustain optimized capital utilization alongside growing revenues.

Payables Turnover Ratio

The payables turnover ratio shows fluctuations across the observed periods. Starting from a ratio of 23.28 in March 2021, it increased to a peak of 29.17 in June 2021, followed by a slight decrease to 25.56 in September 2021 and a stable value of 25.28 in December 2021. The ratio then declined to 20.7 by March 2022 before rising sharply to 28.76 in June 2022 and reaching its highest point of 36.53 in September 2022. Subsequently, the ratio experienced a gradual decline to 33.93 in December 2022 and 28.54 in March 2023. In the following quarters, it demonstrated an upward trend reaching 37.07 in December 2023, fluctuated around the low 30s thereafter, and dropped to the lowest point of 23.38 in March 2025 before recovering slightly to 34.7 by the end of the period. Overall, the payables turnover ratio varied considerably without a consistent long-term trend, indicating alternating periods of faster and slower payments to suppliers.

Average Payables Payment Period (Days)

The average payables payment period shows a complementary pattern to the payables turnover ratio, reflecting the time taken to settle payments. It started at 16 days in March 2021, declined to a low of 10 days by September 2022 and December 2023, indicating quicker payments during these periods. Following this, the period generally remained within the range of 10 to 14 days, with occasional increases to 18 days in March 2022 and 16 days in March 2025. These fluctuations suggest variations in payment policies or supplier agreements, with some quarters reflecting extended payment terms and others demonstrating more expedited settlements.

Overall Insights

The data reveals that the company’s payment behavior towards its suppliers has been inconsistent over the observed quarters. The inverse relationship between the payables turnover ratio and the average payment period is apparent: higher turnover ratios coincide with shorter payment periods, while lower turnover ratios correspond to longer payment durations. This dynamic suggests periodic strategic adjustments in the management of payables, possibly in response to liquidity conditions or operational demands. The absence of a clear linear trend indicates the company’s payables management is responsive rather than steadily progressive or regressive over time.