Netflix Inc FY2024 Financial Report: Revenue $39.0B Up 15.7%, Net Income $8.7B

Executive Summary

Netflix Inc, traded on NASDAQ under the ticker NFLX, reported robust financial performance for FY2024, with total revenue reaching $39.0 billion, reflecting a 15.7% increase compared to FY2023’s $33.7 billion. Net income significantly increased by 61.1%, from $5.4 billion to $8.7 billion, underscoring strong operational efficiency and revenue growth. The company maintains a solid balance sheet with total assets of $53.6 billion and a strong cash position of approximately $7.8 billion, supporting ongoing strategic investments and shareholder returns. This report highlights key financial metrics, operational insights, and strategic outlooks that position Netflix for continued growth amid competitive streaming landscape.

Key Metrics

Management Discussion and Analysis

Netflix’s FY2024 results demonstrate a resilient streaming platform with expanding subscriber base and diversified content offerings. Revenue growth was driven by increased global memberships, particularly in Europe, Middle East, Africa, and Asia-Pacific regions, which collectively contributed over $21.2 billion, representing a 20.0% YoY increase. The company’s content investments focused on original programming, which now accounts for over 90% of content amortization, supporting higher viewer engagement and retention. Operating income improved substantially to $10.4 billion, with operating margins rising to 27%, driven by scale efficiencies and moderation of content costs relative to revenue growth. The company’s strategic focus on international markets and content localization positions it well for sustained growth, despite competitive pressures and macroeconomic uncertainties.

Income Statement Analysis

Revenue increased by 15.7% YoY, from $33.7 billion to $39.0 billion, primarily due to net membership additions of approximately 9.5 million globally. Gross profit margins improved slightly due to content cost management, with gross profit reaching approximately $17.6 billion. Operating expenses remained disciplined, with sales and marketing at $2.92 billion and technology and development at $2.93 billion. Operating income surged by 49.8% YoY, reaching $10.4 billion, with operating margin expanding to 27%. Net income rose by 61.1%, from $5.4 billion to $8.7 billion, driven by higher revenue and operational efficiencies. Earnings per share (EPS) increased to $20.28 basic and $19.83 diluted, reflecting higher profitability and share repurchases, with approximately 9.86 million shares repurchased during FY2024. The company’s net margin improved significantly, indicating effective cost controls and revenue scaling.

Balance Sheet Analysis

At the end of FY2024, Netflix’s total assets increased by 10.1% to $53.6 billion from $48.7 billion in FY2023. Cash and cash equivalents stood at approximately $7.81 billion, up 9.8%, providing ample liquidity for ongoing investments. Content assets, net, totaled $32.45 billion, with licensed content valued at $12.4 billion and produced content at over $10.1 billion in unamortized costs. Long-term assets also include property and equipment valued at $1.59 billion. Total liabilities reached $28.9 billion, with long-term debt at $13.8 billion, and short-term debt of $1.78 billion, all on compliant covenant terms. Stockholders’ equity increased to approximately $24.7 billion, driven by retained earnings of $31.3 billion and share repurchases. The balance sheet demonstrates a strong financial position with high liquidity, manageable leverage, and significant content investments supporting future growth.

Cash Flow Analysis

Operating cash flows remained stable at around $7.36 billion, supported by net income of $8.7 billion and strong cash collections from memberships. Investing activities resulted in cash outflows of approximately $2.18 billion, mainly due to content acquisitions and investments in content production infrastructure. Capital expenditures were approximately $439.5 million, focused on technology, content, and operational facilities. Financing activities included debt repayments of $400 million and share repurchases totaling nearly $6.21 billion, with total cash used in financing of about $4.07 billion. The company’s free cash flow remains robust, and liquidity positions support strategic content investments and shareholder returns, reinforcing its financial stability and growth trajectory.

Ratios & DuPont Analysis

Net profit margin improved to approximately 22.3% from 16.0% in FY2023, reflecting higher net income relative to revenue. Return on assets (ROA) is estimated at 16.2%, and return on equity (ROE) is approximately 35.3%, driven by high net income and efficient asset utilization. Asset turnover ratio indicates that the company generates about 0.73 times revenue per dollar of assets. Equity multiplier remains high at 2.2, indicating leveraged but manageable capital structure. These ratios suggest that Netflix efficiently leverages its assets and equity base to generate strong profitability, supported by solid operating margins and effective financial management.

Risk Factors

Netflix faces various risks including intensifying competition from other streaming platforms, regulatory challenges across international markets, content licensing and intellectual property risks, macroeconomic factors affecting consumer discretionary spending, and technological risks related to cybersecurity and platform stability. Additionally, content cost inflation and subscriber retention pressures pose ongoing challenges. Macro risks such as inflation, currency fluctuations, and geopolitical tensions could impact profitability and strategic plans. The company actively manages these risks through diversified content investments, hedging strategies, and compliance initiatives.

Notes & Additional Commentary

During FY2024, Netflix successfully executed share repurchases, reducing outstanding shares by nearly 9.86 million, enhancing EPS. Content amortization benefited from tax incentives, lowering overall content costs. No material legal or regulatory issues impacted financials. The company’s strategic international expansion and content localization efforts continue to drive subscriber growth. Unusual items include foreign currency remeasurement gains of $122 million on euro-denominated debt, which positively impacted net income. The company’s disciplined capital allocation and investment focus underpin its long-term growth outlook.

Investment Implications

Netflix’s FY2024 results affirm its leadership position in the streaming industry with strong revenue growth, margin expansion, and solid cash flows. The company’s international growth, original content investments, and technological innovation present attractive opportunities for short-term upside. However, increasing competition and macroeconomic uncertainties warrant cautious optimism and close monitoring of subscriber trends and content costs. Overall, Netflix remains a compelling long-term investment with robust profitability, prudent financial management, and strategic growth initiatives supporting sustained shareholder value creation.