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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2024
OR

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from                  to                 
Commission File Number: 001-35727
Netflix, Inc.
(Exact name of Registrant as specified in its charter)
Delaware77-0467272
(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer
Identification Number)
121 Albright Way,Los Gatos,California95032
(Address of principal executive offices)(Zip Code)
(408) 540-3700
(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common stock, par value $0.001 per shareNFLXNASDAQ Global Select Market
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days.    Yes      No  
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes      No     
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large Accelerated FilerAccelerated filer
Non-accelerated filer
Smaller reporting company
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined by Rule 12b-2 of the Exchange Act).    Yes      No  
As of September 30, 2024, there were 427,458,114 shares of the registrant’s common stock, par value $0.001, outstanding.



Table of Contents
 

2


NETFLIX, INC.
Consolidated Statements of Operations
(unaudited)
(in thousands, except per share data)

Three Months EndedNine Months Ended
September 30,
2024
September 30,
2023
September 30,
2024
September 30,
2023
Revenues
$9,824,703 $8,541,668 $28,754,453 $24,890,472 
Cost of revenues
5,119,884 4,930,788 15,271,100 14,407,883 
Marketing
642,926 558,736 1,941,350 1,741,266 
Technology and development
735,063 657,159 2,148,790 2,002,417 
General and administrative
417,353 478,591 1,248,365 1,281,012 
Operating income
2,909,477 1,916,394 8,144,848 5,457,894 
Other income (expense):
Interest expense
(184,830)(175,563)(526,130)(524,614)
Interest and other income (expense)
(21,693)168,218 212,671 123,975 
Income before income taxes
2,702,954 1,909,049 7,831,389 5,057,255 
Provision for income taxes(339,445)(231,627)(988,365)(587,103)
Net income
$2,363,509 $1,677,422 $6,843,024 $4,470,152 
Earnings per share:
Basic
$5.52 $3.80 $15.91 $10.08 
Diluted
$5.40 $3.73 $15.56 $9.90 
Weighted-average shares of common stock outstanding:
Basic
428,239 441,537 430,125 443,540 
Diluted
437,898 450,011 439,757 451,319 










See accompanying notes to the consolidated financial statements.
3

NETFLIX, INC.
Consolidated Statements of Comprehensive Income
(unaudited)
(in thousands)
Three Months EndedNine Months Ended
September 30,
2024
September 30,
2023
September 30,
2024
September 30,
2023
Net income$2,363,509 $1,677,422 $6,843,024 $4,470,152 
Other comprehensive income (loss):
Foreign currency translation adjustments, net of income tax benefit of $10 million, $0, $10 million, and $0, respectively
63,432 (94,157)(84,866)(16,117)
Change in unrealized gains on available-for-sale securities, net of income tax expense of $1 million, $0, $1 million, and $0, respectively
4,290  4,290  
Cash flow hedges:
Net unrealized gains (losses)(285,013)77,852 15,324 77,852 
Reclassification of net gains included in net income(37,365) (54,573) 
Net change, net of income tax benefit (expense) of $96 million, $(23) million, $12 million, and $(23) million, respectively
(322,378)77,852 (39,249)77,852 
Fair value hedges:
Net unrealized losses excluded from the assessment of effectiveness, net of income tax benefit of $0.3 million, $0, $0.3 million, and $0, respectively
(852) (852) 
Total other comprehensive income (loss)(255,508)(16,305)(120,677)61,735 
Comprehensive income$2,108,001 $1,661,117 $6,722,347 $4,531,887 


















See accompanying notes to the consolidated financial statements.
4

NETFLIX, INC.

Consolidated Statements of Cash Flows
(unaudited)
(in thousands)
   
Three Months EndedNine Months Ended
   
September 30,
2024
September 30,
2023
September 30,
2024
September 30,
2023
Cash flows from operating activities:
Net income$2,363,509 $1,677,422 $6,843,024 $4,470,152 
Adjustments to reconcile net income to net cash provided by operating activities:
Additions to content assets(4,016,396)(2,883,839)(11,794,215)(9,025,512)
Change in content liabilities(83,585)(325,989)(639,598)(634,661)
Amortization of content assets3,699,521 3,573,353 11,140,016 10,443,358 
Depreciation and amortization of property, equipment and intangibles80,914 90,660 249,375 270,380 
Stock-based compensation expense65,650 79,720 210,761 256,849 
Foreign currency remeasurement loss (gain) on debt104,809 (172,678)(68,684)(63,075)
Other non-cash items128,082 115,688 363,851 357,179 
Deferred income taxes(200,982)(86,277)(517,446)(288,231)
Changes in operating assets and liabilities:
Other current assets54,956 103,766 64,046 (167,805)
Accounts payable30,597 (68,390)(134,026)(119,726)
Accrued expenses and other liabilities179,011 (65,029)316,490 298,101 
Deferred revenue39,328 (5,733)70,079 41,524 
Other non-current assets and liabilities(124,313)(40,359)(279,203)(227,246)
Net cash provided by operating activities2,321,101 1,992,315 5,824,470 5,611,287 
Cash flows from investing activities:
Purchases of property and equipment(126,863)(103,929)(280,864)(266,920)
Purchases of investments(1,742,246) (1,742,246)(504,862)
Proceeds from maturities of investments 400,000  901,937 
Net cash provided by (used in) investing activities(1,869,109)296,071 (2,023,110)130,155 
Cash flows from financing activities:
Proceeds from issuance of debt1,794,460  1,794,460  
Repayments of debt  (400,000) 
Proceeds from issuance of common stock143,244 57,818 530,875 118,563 
Repurchases of common stock(1,700,000)(2,500,100)(5,299,998)(3,545,347)
Taxes paid related to net share settlement of equity awards(2,024) (5,732) 
Other financing activities(9,084)(32,826)(15,334)(71,746)
Net cash provided by (used in) financing activities226,596 (2,475,108)(3,395,729)(3,498,530)
Effect of exchange rate changes on cash, cash equivalents and restricted cash 153,452 (122,707)(65,061)(56,658)
Net increase (decrease) in cash, cash equivalents and restricted cash832,040 (309,429)340,570 2,186,254 
Cash, cash equivalents and restricted cash at beginning of period 6,627,045 7,666,265 7,118,515 5,170,582 
Cash, cash equivalents and restricted cash at end of period $7,459,085 $7,356,836 $7,459,085 $7,356,836 



See accompanying notes to the consolidated financial statements.
5

NETFLIX, INC.
Consolidated Balance Sheets
(in thousands, except share and par value data)

As of
   
September 30,
2024
December 31,
2023
(unaudited)
Assets
Current assets:
Cash and cash equivalents
$7,457,025 $7,116,913 
Short-term investments1,766,902 20,973 
Other current assets
2,905,172 2,780,247 
Total current assets
12,129,099 9,918,133 
Content assets, net
32,175,382 31,658,056 
Property and equipment, net
1,568,212 1,491,444 
Other non-current assets
6,409,151 5,664,359 
Total assets
$52,281,844 $48,731,992 
Liabilities and Stockholders’ Equity
Current liabilities:
Current content liabilities
$4,489,971 $4,466,470 
Accounts payable
641,953 747,412 
Accrued expenses and other liabilities
2,241,758 1,803,960 
Deferred revenue
1,513,048 1,442,969 
Short-term debt
1,820,396 399,844 
Total current liabilities
10,707,126 8,860,655 
Non-current content liabilities
1,918,089 2,578,173 
Long-term debt
14,160,932 14,143,417 
Other non-current liabilities
2,774,961 2,561,434 
Total liabilities
29,561,108 28,143,679 
Commitments and contingencies (Note 8)
Stockholders’ equity:
Common stock, $0.001 par value; 4,990,000,000 shares authorized at September 30, 2024 and December 31, 2023; 427,458,114 and 432,759,584 issued and outstanding at September 30, 2024 and December 31, 2023, respectively
5,887,903 5,145,172 
Treasury stock at cost (24,784,254 and 16,078,268 shares at September 30, 2024 and December 31, 2023, respectively)
(12,254,855)(6,922,200)
Accumulated other comprehensive loss(344,622)(223,945)
Retained earnings
29,432,310 22,589,286 
Total stockholders’ equity
22,720,736 20,588,313 
Total liabilities and stockholders’ equity
$52,281,844 $48,731,992 




See accompanying notes to the consolidated financial statements.
6

NETFLIX, INC.
Consolidated Statements of Stockholders’ Equity
(unaudited)
(in thousands)
Three Months EndedNine Months Ended
 September 30,
2024
September 30,
2023
September 30,
2024
September 30,
2023
Total stockholders' equity, beginning balances$22,112,693 $22,832,215 $20,588,313 $20,777,401 
Common stock and additional paid-in capital:
Beginning balances
$5,680,061 $4,874,208 $5,145,172 $4,637,601 
Issuance of common stock142,192 57,499 531,970 116,977 
Stock-based compensation expense65,650 79,720 210,761 256,849 
Ending balances$5,887,903 $5,011,427 $5,887,903 $5,011,427 
Treasury stock:
Beginning balances
$(10,547,055)$(1,876,753)$(6,922,200)$(824,190)
Repurchases of common stock to be held as treasury stock(1,707,800)(2,522,924)(5,332,655)(3,575,487)
Ending balances$(12,254,855)$(4,399,677)$(12,254,855)$(4,399,677)
Accumulated other comprehensive loss:
Beginning balances
$(89,114)$(139,266)$(223,945)$(217,306)
Other comprehensive income (loss)(255,508)(16,305)(120,677)61,735 
Ending balances$(344,622)$(155,571)$(344,622)$(155,571)
Retained earnings:
Beginning balances$27,068,801 $19,974,026 $22,589,286 $17,181,296 
Net income
2,363,509 1,677,422 6,843,024 4,470,152 
Ending balances$29,432,310 $21,651,448 $29,432,310 $21,651,448 
Total stockholders' equity, ending balances
$22,720,736 $22,107,627 $22,720,736 $22,107,627 





















See accompanying notes to the consolidated financial statements.
7

NETFLIX, INC.
Notes to Consolidated Financial Statements
(unaudited)

1. Basis of Presentation and Summary of Significant Accounting Policies
The accompanying interim consolidated financial statements of Netflix, Inc. and its wholly owned subsidiaries (the “Company”) have been prepared in conformity with accounting principles generally accepted in the United States (“U.S.”) and are consistent in all material respects with those applied in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023 filed with the Securities and Exchange Commission (the “SEC”) on January 26, 2024. The preparation of consolidated financial statements in conformity with U.S. generally accepted accounting principles (“GAAP”) requires management to make estimates and judgments that affect the amounts reported in the consolidated financial statements and accompanying notes. Significant items subject to such estimates and assumptions include the amortization of content assets and the recognition and measurement of income tax assets and liabilities. The Company bases its estimates on historical experience and on various other assumptions that the Company believes to be reasonable under the circumstances. On a regular basis, the Company evaluates the assumptions, judgments and estimates. Actual results may differ from these estimates.
The interim financial information is unaudited, but reflects all normal recurring adjustments that are, in the opinion of management, necessary to fairly present the information set forth herein. The interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements and related notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023. Interim results are not necessarily indicative of the results for a full year.
The following is provided to update the Company’s significant accounting policies previously described in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023.

Derivative Financial Instruments and Hedging Activities
The Company uses derivative and non-derivative instruments to manage foreign exchange risk related to its ongoing business operations with the primary objective of reducing earnings and cash flow volatility associated with fluctuations in foreign exchange rates.
The Company recognizes derivative instruments at fair value as either assets (presented in “Other current assets” and “Other non-current assets”) or liabilities (presented in “Accrued expenses and other liabilities” and “Other non-current liabilities”) on the Company’s Consolidated Balance Sheets. The Company classifies derivative instruments in the Level 2 category within the fair value hierarchy.
Cash flow hedges
The Company enters into forward contracts to manage the foreign exchange risk on forecasted revenue transactions denominated in currencies other than the U.S. dollar, as well as the foreign exchange risk on forecasted transactions and firm commitments related to the licensing and production of foreign currency-denominated content assets. These forward contracts are designated as cash flow hedges of foreign currency firm commitments and forecasted transactions and generally have maturities of 36 months or less. The hedging contracts may reduce, but do not entirely eliminate, the effect of foreign currency exchange movements, and the Company may choose not to hedge certain exposures.
The gain or loss on derivative instruments designated as cash flow hedges of forecasted foreign currency revenue is initially reported as a component of accumulated other comprehensive income (“AOCI”) and reclassified into “Revenues” on the Consolidated Statements of Operations in the same period the forecasted transaction affects earnings. The gain or loss on derivative instruments designated as cash flow hedges of firmly committed or forecasted transactions related to the licensing and production of content assets is initially reported as a component of AOCI and reclassified into “Cost of Revenues” on the Consolidated Statements of Operations in the same period the hedged transaction affects earnings, which occurs as the underlying hedged content assets are amortized. Cash flows from hedging activities are classified in the same category as the cash flows for the underlying item being hedged within "Net cash provided by operating activities" on the Consolidated Statements of Cash Flows.
In the event that the likelihood of occurrence of the underlying forecasted transactions is determined to be probable not to occur, the gains or losses on the related cash flow hedges are reclassified from AOCI to “Interest and other income (expense)” in the Consolidated Statements of Operations in the period of dedesignation.
Fair value hedges
The Company designates forward contracts as fair value hedges to manage the foreign exchange risk on its foreign-currency denominated debt. These hedges may reduce, but do not entirely eliminate, the effect of foreign currency exchange movements, and the Company may choose not to hedge the full amount of its exposure. The gain or loss on derivative instruments designated as fair value hedges included in the assessment of hedge effectiveness is recognized in “Interest and other income (expense),” net with the offsetting foreign currency remeasurement gains and losses on the hedged items. The Company excludes forward points from the assessment of hedge effectiveness and recognizes the initial value of the excluded component over the life of the hedging instrument in “Interest and other income (expense).” The difference between changes in fair value of the excluded component and the amount recognized in earnings is recognized as a component in
8

AOCI. Cash flows from hedging activities are classified in the same category as the cash flows for the underlying item being hedged within "Net cash provided by (used in) financing activities" on the Consolidated Statements of Cash Flows.
Net investment hedges
The Company designates a portion of its foreign currency-denominated debt as net investment hedges to manage the foreign exchange risk on its investment in certain foreign subsidiaries. These hedges may reduce, but do not entirely eliminate, the effect of foreign currency exchange movements, and the Company may choose not to hedge certain exposures. The gains or losses on these non-derivative instruments are reported as a component of AOCI as part of the cumulative translation adjustment on the Company’s Consolidated Balance Sheets. The accumulated gains and losses remain in AOCI until the hedged net investment is sold or liquidated, at which point the amounts recognized in AOCI are reclassified into earnings.
Derivative instruments not designated as hedging instruments
The Company enters into forward contracts to manage the foreign exchange risk on intercompany transactions and monetary assets and liabilities that are not denominated in the functional currencies of the Company and its subsidiaries. These derivative instruments are not designated as hedging instruments and may reduce, but do not entirely eliminate, the effect of foreign currency exchange movements. The gain or loss on derivative instruments not designated as hedging instruments are recorded in “Interest and other income (expense)” in the Consolidated Statements of Operations. Cash flows related to these derivative instruments are classified within "Net cash provided by operating activities" on the Consolidated Statements of Cash Flows.
See Note 7 Derivative Financial Instruments and Hedging Activities to the consolidated financial statements for further information regarding the Company’s derivative and non-derivative financial instruments.
Stock-based Compensation
The Company grants non-qualified stock options to its employees on a monthly basis. For certain executive officers, the Company grants restricted stock units ("RSUs") and performance-based restricted stock units ("PSUs"). Stock-based compensation expense is based on the fair value of the stock awards at the grant date and is recognized, net of forfeitures, over the requisite service period. See Note 9 Stockholders' Equity to the consolidated financial statements for further information regarding stock-based compensation.
Recently issued accounting pronouncements not yet adopted
In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which requires public entities to disclose information about their reportable segments’ significant expenses and other segment items on an interim and annual basis. Public entities with a single reportable segment are required to apply the disclosure requirements in ASU 2023-07, as well as all existing segment disclosures and reconciliation requirements in ASC 280 on an interim and annual basis. ASU 2023-07 is effective for fiscal years beginning after December 15, 2023, and for interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. The Company is currently evaluating the impact of adopting ASU 2023-07.
In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): 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.


2. Revenue Recognition
The following tables summarize streaming revenues, paid net membership additions, and ending paid memberships by region for the three and nine months ended September 30, 2024 and September 30, 2023, respectively. Hedging gains of $48 million and $70 million are included in “Streaming revenues” for the three and nine months ended September 30, 2024, respectively. No hedge gains and losses were recognized as “Streaming revenues” in the comparative prior year periods. See Note 7 Derivative Financial Instruments and Hedging Activities for further information.

United States and Canada (UCAN)
9

As of/Three Months EndedAs of/Nine Months Ended
 September 30,
2024
September 30,
2023
September 30,
2024
September 30,
2023
 (in thousands)
Streaming revenues$4,322,476 $3,735,133 $12,842,351 $10,943,226 
Paid net membership additions694 1,750 4,675 3,025 
Paid memberships at end of period (1)84,803 77,321 84,803 77,321 

Europe, Middle East, and Africa (EMEA)
As of/Three Months EndedAs of/Nine Months Ended
 September 30,
2024
September 30,
2023
September 30,
2024
September 30,
2023
 (in thousands)
Streaming revenues$3,133,466 $2,693,146 $9,099,431 $7,772,957 
Paid net membership additions2,167 3,953 7,318 7,031 
Paid memberships at end of period (1)96,131 83,760 96,131 83,760 

Latin America (LATAM)
As of/Three Months EndedAs of/Nine Months Ended
 September 30,
2024
September 30,
2023
September 30,
2024
September 30,
2023
 (in thousands)
Streaming revenues$1,240,892 $1,142,811 $3,610,045 $3,290,438 
Paid net membership additions (losses)(68)1,179 3,185 1,946 
Paid memberships at end of period (1)49,182 43,645 49,182 43,645 

Asia-Pacific (APAC)
As of/Three Months EndedAs of/Nine Months Ended
 September 30,
2024
September 30,
2023
September 30,
2024
September 30,
2023
 (in thousands)
Streaming revenues$1,127,869 $948,216 $3,202,626 $2,801,012 
Paid net membership additions2,280 1,881 7,266 4,404 
Paid memberships at end of period (1)52,604 42,427 52,604 42,427 
(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 consists of membership fees billed that have not been recognized, as well as gift cards and other prepaid memberships that have not been fully redeemed. As of September 30, 2024, total deferred revenue was $1,513 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 $70 million increase in deferred revenue as compared to the balance of $1,443 million as of December 31, 2023 is a result of the increase in membership fees billed due to increased memberships and price increases.

10


3. Earnings Per Share

Basic earnings per share is computed using the weighted-average number of outstanding shares of common stock during the period. Diluted earnings per share is computed using the weighted-average number of outstanding shares of common stock and, when dilutive, potential outstanding shares of common stock during the period. Potential 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:
Three Months EndedNine Months Ended
September 30,
2024
September 30,
2023
September 30,
2024
September 30,
2023
(in thousands, except per share data)
Basic earnings per share:
Net income
$2,363,509 $1,677,422 $6,843,024 $4,470,152 
Shares used in computation:
Weighted-average shares of common stock outstanding428,239 441,537 430,125 443,540 
Basic earnings per share$5.52 $3.80 $15.91 $10.08 
Diluted earnings per share:
Net income
$2,363,509 $1,677,422 $6,843,024 $4,470,152 
Shares used in computation:
Weighted-average shares of common stock outstanding428,239 441,537 430,125 443,540 
Effect of dilutive stock-based awards9,659 8,474 9,632 7,779 
Weighted-average number of shares437,898 450,011 439,757 451,319 
Diluted earnings per share$5.40 $3.73 $15.56 $9.90 

The following table summarizes the potential shares of common stock excluded from the diluted calculation as their inclusion would have been anti-dilutive:
Three Months EndedNine Months Ended
September 30,
2024
September 30,
2023
September 30,
2024
September 30,
2023
(in thousands)
Stock-based awards159 3,147 321 4,447 
11


4. Cash, Cash Equivalents, Restricted Cash, and Short-term Investments
The Company classifies short-term investments, which consist of marketable securities with original maturities in excess of 90 days as available-for-sale (“AFS”). The Company does not buy and hold securities principally for the purpose of selling them in the near future. The Company’s policy is focused on the preservation of capital, liquidity and return. From time to time, the Company may sell certain securities but the objectives are generally not to generate profits on short-term differences in price.
The following tables summarize the Company's cash, cash equivalents, restricted cash and short-term investments as of September 30, 2024 and December 31, 2023:

 As of September 30, 2024
 Amortized CostGross Unrealized GainsGross Unrealized LossesEstimated Fair ValueCash and cash equivalentsShort-term investmentsOther Current AssetsNon-current Assets
 (in thousands)
Cash$4,809,569 $ $ $4,809,569 $4,807,566 $ $1,923 $80 
Level 1 securities:
Money market funds2,432,077   2,432,077 2,432,020   57 
Level 2 securities:
Time Deposits (1)250,412   250,412 217,439 32,973   
Government securities (2)1,728,363 5,566  1,733,929  1,733,929   
$9,220,421 $5,566 $ $9,225,987 $7,457,025 $1,766,902 $1,923 $137 

 As of December 31, 2023
 Amortized CostGross Unrealized GainsGross Unrealized LossesEstimated Fair ValueCash and cash equivalentsShort-term investmentsOther Current AssetsNon-current Assets
 (in thousands)
Cash$5,988,176 $ $ $5,988,176 $5,986,629 $ $1,466 $81 
Level 1 securities:
Money market funds925,707   925,707 925,652   55 
Level 2 securities:
Time Deposits (1)225,605   225,605 204,632 20,973   
$7,139,488 $ $ $7,139,488 $7,116,913 $20,973 $1,466 $136 
(1) The majority of the Company's time deposits are international deposits, which mature within one year.
(2) The Company's government securities mature within one year.
Other current assets include restricted cash for deposits related to self-insurance. Non-current assets include restricted cash related to letter of credit agreements. The fair value of available-for-sale securities, cash equivalents and short-term investments included in the Level 2 category is based on observable inputs, such as quoted prices for similar assets at the measurement date; quoted prices in markets that are not active; or other inputs that are observable, either directly or indirectly.
See Note 6 Debt and Note 7 Derivative Financial Instruments and Hedging Activities to the consolidated financial statements for further information regarding the fair value of the Company’s senior notes and derivative financial instruments.



12



5. Balance Sheet Components

Content Assets, Net
Content assets consisted of the following:
As of
September 30,
2024
December 31,
2023
(in thousands)
Licensed content, net
$12,307,674 $12,722,701 
Produced content, net
Released, less amortization
10,025,304 9,843,150 
In production
9,197,715 8,247,578 
In development and pre-production
644,689 844,627 
19,867,708 18,935,355 

Content assets, net
$32,175,382 $31,658,056 
As of September 30, 2024, the amount of accrued participations and residuals was not material.
The following table represents the amortization of content assets:
Three Months EndedNine Months Ended
 September 30,
2024
September 30,
2023
September 30,
2024
September 30,
2023
(in thousands)
Licensed content$1,814,040 $1,777,701 $5,533,648 $5,280,700 
Produced content1,885,481 1,795,652 5,606,368 5,162,658 
Total$3,699,521 $3,573,353 $11,140,016 $10,443,358 
Property and Equipment, Net
Property and equipment and accumulated depreciation consisted of the following:
As of
September 30,
2024
December 31,
2023
Estimated Useful Lives
(in thousands)
Land
$85,000 $85,000 
Buildings and improvements
471,620 154,165 30 years
Leasehold improvements
1,049,510 1,032,492 Over life of lease
Furniture and fixtures
137,468 144,737 
3 years
Information technology
432,078 414,092 3 years
Corporate aircraft
99,175 99,175 
8-10 years
Machinery and equipment
13,035 10,334 
3-5 years
Capital work-in-progress
202,652 406,492 
Property and equipment, gross
2,490,538 2,346,487 
Less: Accumulated depreciation
(922,326)(855,043)
Property and equipment, net
$1,568,212 $1,491,444 
    


13


Leases
The Company has entered into operating leases primarily for real estate. Operating leases are included in "Other non-current assets" on the Company's Consolidated Balance Sheets, and represent the Company’s right to use the underlying asset for the lease term. The Company’s obligations to make lease payments are included in "Accrued expenses and other liabilities" and "Other non-current liabilities" on the Company's Consolidated Balance Sheets.
Information related to the Company's operating right-of-use assets and related operating lease liabilities were as follows:
Three Months EndedNine Months Ended
September 30,
2024
September 30,
2023
September 30,
2024
September 30,
2023
(in thousands)
Cash paid for operating lease liabilities$128,917 $110,959 $384,327 $339,126 
Right-of-use assets obtained in exchange for new operating lease obligations51,587 49,238 396,361 161,704 
As of
September 30,
2024
December 31,
2023
(in thousands)
Operating lease right-of-use assets, net$2,214,458 $2,076,899 
Current operating lease liabilities432,661 383,312 
Non-current operating lease liabilities2,094,659 2,046,801 
Total operating lease liabilities$2,527,320 $2,430,113 

Other Current Assets
Other current assets consisted of the following:
As of
September 30,
2024
December 31,
2023
(in thousands)
Trade receivables
$1,217,659 $1,287,054 
Prepaid expenses
435,730 408,936 
Other
1,251,783 1,084,257 
Total other current assets
$2,905,172 $2,780,247 

14


6. Debt
As of September 30, 2024, the Company had aggregate outstanding notes of $15,981 million, net of $68 million of issuance costs and $6 million of discounts, with varying maturities (the "Notes"). Of the outstanding balance, $1,820 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. Each of the Notes are senior unsecured obligations of the Company. Interest is payable semi-annually at fixed rates.
A portion of the outstanding Notes is denominated in foreign currency (comprised of €5,170 million) and is remeasured into U.S. dollars at each balance sheet date (with remeasurement loss, net of hedging impacts, totaling $105 million for the three months ended September 30, 2024 and remeasurement gain, net of hedging impacts, totaling $69 million for the nine months ended September 30, 2024). See Note 7 Derivative Financial Instruments and Hedging Activities to the consolidated financial statements for further information regarding the Company’s derivative and non-derivative financial instruments.
The following table provides a summary of the Company's outstanding debt and the fair values based on quoted market prices in less active markets as of September 30, 2024 and December 31, 2023:
Principal Amount at ParLevel 2 Fair Value as of
September 30,
2024
December 31,
2023
Issuance DateMaturitySeptember 30,
2024
December 31,
2023
(in millions)(in millions)
5.750% Senior Notes
$ $400 February 2014March 2024$ $400 
5.875% Senior Notes
800 800 February 2015February 2025803 807 
3.000% Senior Notes (1)
523 519 April 2020June 2025522 516 
3.625% Senior Notes
500 500 April 2020June 2025496 491 
4.375% Senior Notes
1,000 1,000 October 2016November 20261,008 996 
3.625% Senior Notes (1)
1,446 1,434 May 2017May 20271,477 1,454 
4.875% Senior Notes
1,600 1,600 October 2017April 20281,639 1,621 
5.875% Senior Notes
1,900 1,900 April 2018November 20282,026 2,009 
4.625% Senior Notes (1)
1,225 1,215 October 2018May 20291,314 1,300 
6.375% Senior Notes
800 800 October 2018May 2029874 872 
3.875% Senior Notes (1)
1,336 1,325 April 2019November 20291,393 1,372 
5.375% Senior Notes
900 900 April 2019November 2029948 931 
3.625% Senior Notes (1)
1,225 1,215 October 2019June 20301,263 1,237 
4.875% Senior Notes
1,000 1,000 October 2019June 20301,032 1,012 
4.900% Senior Notes
1,000  August 2024August 20341,035  
5.400% Senior Notes
800  August 2024August 2054846  
$16,055 $14,608 $16,676 $15,018 
(1) The following Senior Notes have a principal amount denominated in euros: 3.000% Senior Notes for €470 million, 3.625% Senior Notes for €1,300 million, 4.625% Senior Notes for €1,100 million, 3.875% Senior Notes for €1,200 million, and 3.625% Senior Notes for €1,100 million.
In the nine months ended September 30, 2024, the Company repaid upon maturity the $400 million aggregate principal amount of its 5.750% Senior Notes.
Each of the Notes are repayable in whole or in part upon the occurrence of a change of control, at the option of the holders, at a purchase price in cash equal to 101% of the principal plus accrued interest. The Company may redeem the Notes prior to maturity in whole or in part at an amount equal to the principal amount thereof plus accrued and unpaid interest and an applicable premium. The Notes include, among other terms and conditions, limitations on the Company's ability to create, incur or allow certain liens, and consolidate or merge with, or convey, transfer or lease all or substantially all of the Company's and its subsidiaries assets, to another person. Certain of the Notes additionally limit the ability to enter into sale and lease-back transactions and create, assume, incur or guarantee additional indebtedness of certain of the Company's subsidiaries. As of September 30, 2024 and December 31, 2023, the Company was in compliance with all related covenants.

15

Revolving Credit Facility
On April 12, 2024, the Company entered into a five-year, $3 billion unsecured revolving credit facility that matures on April 12, 2029 (the “Revolving Credit Agreement”), to replace its previous $1 billion unsecured revolving credit facility. As of September 30, 2024, no amounts have been borrowed under the Revolving Credit Agreement.
The borrowings under the Revolving Credit Agreement bear interest, at the Company’s option, of either (i) a floating rate per annum equal to a base rate (the “Alternate Base Rate”) plus an applicable margin or (ii) a per annum rate equal to an adjusted term SOFR rate (the “Adjusted Term SOFR Rate”) plus an applicable margin. The applicable margin for Alternate Base Rate loans will range from 0.00% to 0.25%, and the applicable margin for Adjusted Term SOFR Rate loans will range from 0.75% to 1.25%, each based on the Company’s credit ratings.
The Revolving Credit Agreement contains customary affirmative covenants and negative covenants (and customary baskets and exceptions with respect thereto) for a credit facility of this size and type and requires the Company to maintain a minimum ratio of consolidated EBITDA to consolidated interest expense of 3.0 to 1.0 as of the last day of each fiscal quarter. As of September 30, 2024 and December 31, 2023, the Company was in compliance with all related covenants and ratios.


7. 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.

Notional Amount of Derivative Contracts
The net notional amounts of the Company’s outstanding derivative instruments were as follows:
As of 
September 30,
2024
December 31,
2023
(in thousands)
Derivatives designated as hedging instruments:
Foreign exchange contracts
Cash flow hedges
$17,786,210 $8,783,273 
Fair value hedges
3,834,258  
Derivatives not designated as hedging instruments:
Foreign exchange contracts1,033,077  
Total
$22,653,545 $8,783,273 
As of September 30, 2024, approximately $1.1 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. See Note 6 Debt for further information on the Company’s debt obligations.

Fair Value of Derivative Contracts
The fair value of the Company’s outstanding derivative instruments was as follows:

 As of September 30, 2024
Derivative AssetsDerivative Liabilities
 Other current assetsOther non-current assetsAccrued expenses and other liabilitiesOther non-current liabilities
 (in thousands)
Derivatives designated as hedging instruments:
Foreign exchange contracts$136,211 $5,080 $196,622 $120,764 
Derivatives not designated as hedging instruments:
Foreign exchange contracts14,713  18,765  
Total$150,924 $5,080 $215,387 $120,764 
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 As of December 31, 2023
Derivative AssetsDerivative Liabilities
 Other current assetsOther non-current assetsAccrued expenses and other liabilitiesOther non-current liabilities
 (in thousands)
Derivatives designated as hedging instruments:
Foreign exchange contracts$26,416 $4,518 $140,089 $46,575 
Derivatives not designated as hedging instruments:
Foreign exchange contracts    
Total$26,416 $4,518 $140,089 $46,575 
The Company classifies derivative instruments in the Level 2 category within the fair value hierarchy. These instruments are valued using industry standard valuation models that use observable inputs such as interest rate yield curves, and forward and spot prices for currencies.
As of September 30, 2024, 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 $135 million.
Master Netting Agreements
In order to mitigate counterparty credit risk, the Company enters into master netting agreements with its counterparties for its foreign currency exchange contracts which permit the parties to settle amounts on a net basis under certain conditions. The Company has elected to present its derivative assets and liabilities on a gross basis on its Consolidated Balance Sheets.
The Company also enters into collateral security arrangements with its counterparties that require the parties to post cash collateral when certain contractual thresholds are met. No cash collateral was received or posted by the Company as of September 30, 2024 and December 31, 2023.
The potential offsetting effect to the Company’s derivative assets and liabilities under its master netting agreements and collateral security agreements were as follows:

 As of September 30, 2024
Gross Amount Not Offset in the Consolidated Balance Sheets
 Gross Amount Recognized in the Consolidated Balance SheetsGross Amount Offset in the Consolidated Balance SheetsNet Amount Presented in the Consolidated Balance SheetsFinancial InstrumentsCollateral Received and PostedNet Amount
 (in thousands)
Derivative assets$156,004 $ $156,004 $(155,428)$ $576 
Derivative liabilities336,151  336,151 (155,428) 180,723 

 As of December 31, 2023
Gross Amount Not Offset in the Consolidated Balance Sheets
 Gross Amount Recognized in the Consolidated Balance SheetsGross Amount Offset in the Consolidated Balance SheetsNet Amount Presented in the Consolidated Balance SheetsFinancial InstrumentsCollateral Received and PostedNet Amount
 (in thousands)
Derivative assets$30,934 $ $30,934 $(27,246)$ $3,688 
Derivative liabilities186,664  186,664 (27,246) 159,418 


17


Effect of Derivative and Non-Derivative Instruments on Consolidated Financial Statements
The pre-tax gains (losses) on the Company’s cash flow hedges, fair value hedges, and net investment hedges recognized in AOCI were as follows:
Three Months EndedNine Months Ended
September 30,
2024
September 30,
2023
September 30,
2024
September 30,
2023
(in thousands)
Cash flow hedges:
Foreign exchange contracts
Amount included in the assessment of effectiveness$(369,805)$101,169 $19,883 $101,169 
Fair value hedges:
Foreign exchange contracts
Amount excluded from the assessment of effectiveness(10,175) (10,175) 
Net investment hedges:
Foreign currency-denominated debt(42,000) (45,400) 
Total$(421,980)$101,169 $(35,692)$101,169 


The gains (losses) on hedged items and derivative instruments recognized in the Consolidated Statement of Operations were as follows:
Three Months Ended
September 30, 2024
RevenuesCost of RevenuesInterest and other income (expense)
(in thousands)
Total amounts presented in the Consolidated Statements of Operations$9,824,703 $5,119,884 $(21,693)
Gains on derivatives in cash flow hedging relationship
Foreign exchange contracts
Amount of gains reclassified from AOCI48,184 297  
Gains (losses) on derivatives in fair value hedging relationship
Foreign exchange contracts
Hedged items  (71,673)
Derivatives designated as hedging instruments  70,332 
Amount excluded from assessment of effectiveness and recognized in earnings based on amortization approach  (9,069)
Losses on derivatives not designated as hedging instruments
Foreign exchange contracts  (1,296)
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Nine Months Ended
September 30, 2024
RevenuesCost of RevenuesInterest and other income (expense)
(in thousands)
Total amounts presented in the Consolidated Statements of Operations$28,754,453 $15,271,100 $212,671 
Gains on derivatives in cash flow hedging relationship
Foreign exchange contracts
Amount of gains reclassified from AOCI70,244 564  
Gains (losses) on derivatives in fair value hedging relationship
Foreign exchange contracts
Hedged items  (71,673)
Derivatives designated as hedging instruments  70,332 
Amount excluded from assessment of effectiveness and recognized in earnings based on amortization approach  (9,069)
Gains on derivatives not designated as hedging instruments
Foreign exchange contracts  12,767 
No gains or losses on derivative instruments were recognized in the Consolidated Statements of Operations in the three and nine months ended September 30, 2023.


8. Commitments and Contingencies

Content
As of September 30, 2024, the Company had $22.7 billion of obligations comprised of $4.5 billion included in "Current content liabilities" and $1.9 billion of "Non-current content liabilities" on the Consolidated Balance Sheets and $16.3 billion of obligations that are not reflected on the Consolidated Balance Sheets as they did not yet meet the criteria for recognition.
As of December 31, 2023, the Company had $21.7 billion of obligations comprised of $4.5 billion included in "Current content liabilities" and $2.6 billion of "Non-current content liabilities" on the Consolidated Balance Sheets and $14.6 billion of obligations that are not reflected on the Consolidated Balance Sheets as they did not yet meet the criteria for recognition.
The expected timing of payments for these content obligations is as follows:
As of 
September 30,
2024
December 31,
2023
(in thousands)
Less than one year
$11,810,836 $10,328,923 
Due after one year and through three years
8,062,166 8,784,302 
Due after three years and through five years
2,277,918 2,016,358 
Due after five years
547,375 583,766 
Total content obligations
$22,698,295 $21,713,349 
Content obligations include amounts related to the acquisition, licensing and production of content. Obligations that are in non-U.S. dollar currencies are translated to the U.S. dollar at period end rates. An obligation for the production of content includes non-cancelable commitments under creative talent and employment agreements as well as other production related commitments. An obligation for the acquisition and licensing of content is incurred at the time the Company enters into an agreement to obtain future titles. Once a title becomes available, a content liability is recorded on the Consolidated Balance Sheets. Certain agreements include the obligation to license rights for unknown future titles, the ultimate quantity and/or fees for which are not yet determinable as of the reporting date. Traditional film output deals, or certain TV series license agreements where the number of seasons to be aired is unknown, are examples of such license agreements. The Company does not include any estimated obligation for these future titles beyond the known minimum amount. However, the unknown obligations are expected to be significant.
Legal Proceedings
19

From time to time, in the normal course of its operations, the Company is subject to litigation matters and claims, including claims relating to employee relations, business practices and patent infringement. Litigation can be expensive and disruptive to normal business operations. Moreover, the results of complex legal proceedings are difficult to predict and the Company's view of these matters may change in the future as the litigation and events related thereto unfold. The Company expenses legal fees as incurred. The Company records a provision for contingent losses when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated. An unfavorable outcome to any legal matter, if material, could have an adverse effect on the Company's operations or its financial position, liquidity or results of operations.
The Company is involved in litigation matters not listed herein but does not consider the matters to be material either individually or in the aggregate at this time. The Company's view of the matters not listed may change in the future as the litigation and events related thereto unfold.
Non-Income Taxes
The Company is routinely under audit by various tax authorities with regard to non-income tax matters. 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.
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.
Guarantees— Indemnification Obligations
In the ordinary course of business, the Company has entered into contractual arrangements under which it has agreed to provide indemnification of varying scope and terms to business partners and other parties with respect to certain matters, including, but not limited to, losses arising out of the Company’s breach of such agreements and out of intellectual property infringement claims made by third parties. In these circumstances, payment may be conditional on the other party making a claim pursuant to the procedures specified in the particular contract.
The Company's obligations under these agreements may be limited in terms of time or amount, and in some instances, the Company may have recourse against third parties for certain payments. In addition, the Company has entered into indemnification agreements with its directors and certain of its officers that will require it, among other things, to indemnify them against certain liabilities that may arise by reason of their status or service as directors or officers. The terms of such obligations vary.
It is not possible to make a reasonable estimate of the maximum potential amount of future payments under these or similar agreements due to the conditional nature of the Company’s obligations and the unique facts and circumstances involved in each particular agreement. No amount has been accrued in the accompanying consolidated financial statements with respect to these indemnification obligations.

9. Stockholders’ Equity
Equity Incentive Plans
The Netflix, Inc. 2020 Stock Plan is a stockholder-approved plan that provides for the grant of incentive stock options to employees and for the grant of non-statutory stock options, stock appreciation rights, restricted stock and restricted stock units to employees, directors and consultants.
Stock Option Activity
Stock options are generally vested in full upon grant date and exercisable for the full ten-year contractual term regardless of employment status. Stock options granted to certain named executive officers vest on the one-year anniversary of the grant date, subject to the employee’s continuous employment or service with the Company through the vesting date.
The following table summarizes the activities related to the Company’s stock options:
20

Options Outstanding
Number of
Shares
Weighted-
Average
Exercise Price
(per share)
Balances as of December 31, 202319,695,109 $268.86 
Granted
465,641 583.66
Exercised
(3,384,520)