Netflix Inc.

Business description

Netflix (NFLX) is the world's largest subscription-based streaming service, offering TV episodes, movies, games, and live events to ~302M paid members in 190+ countries. The company is transitioning from pure subscriber growth to a revenue monetization optimization strategy (ads, pricing power, paid sharing).

Key financials

• Price: $73.53 (07/14/2026)
• 12-Mo Target: $115.00 (CFRA Buy, 4-STARS)
• Market Cap: ~$308.95B
• Trailing P/E: 23.75
• 2026E Revenue: $50.7B-$51.7B (+12%-14% growth)
• 2026E EPS: $3.75
• 2027E EPS: $4.00
• Operating Margin Target: 31.5% (2026)
• Free Cash Flow 2026E: ~$12.5B

Competitive moat

Strong global brand, massive content library, and best-in-class recommendation technology. Scaling advantage in content amortization and production across 190+ countries. Localized live events proven as powerful member acquisition tool (WBC Japan drove largest sign-up day ever).

Recent developments

• Q2 2026 Results (07/16/2026): Revenue $12.56B (+13% Y/Y), operating income $4.19B (+11%), diluted EPS $0.80. Revenue in-line with guidance, OM 33.4% slightly ahead. Net income impact normalized ($3.4B vs $5.3B in Q1 which included $2.8B WB termination fee).
• FY2026 Guidance Narrowed: Revenue forecast narrowed to $51.0-$51.4B (13-14% growth, ~12% F/X neutral). Operating margin 31.5% reaffirmed. Ads revenue on track for ~$3B (roughly 2x 2025).
• Share Repurchase Acceleration: $4.7B in Q2 repurchases (largest quarter ever). Board authorized additional $25B buyback program. $27.1B remaining on authorizations.
• Live Events Expansion: Expanded NFL agreement — Week 1 matchup, Thanksgiving Eve, Christmas Gameday, plus final week Q1 2027. MLB Home Run Derby and Field of Dreams game in Q3. Fury vs Joshua fight later 2026.
• Content & Programming: View hours grew +2% in H1'26. Video podcasts over-indexing daytime mobile viewing (incremental engagement). Cloud TV games: FIFA World Cup and Unhinged biggest debuts. GenAI used in ~300 titles in 2026.
• Engagement Disclosure Change: What We Watched report moving from semi-annual to annual (starting 2027). Separating from earnings to focus on primary financial metrics.
• Q1 2026 Results: Revenue $12.25B (+16% Y/Y), operating income $3.96B (+18%), diluted EPS $1.23 (vs $0.66). Ahead of guidance on slightly higher subscription revenue. Net income boosted by $2.8B Warner Bros. termination fee.
• Full-Year Guidance Maintained: Revenue $50.7B-$51.7B, operating margin 31.5%. Ads revenue on track to reach ~$3B (2x 2025).
• Content Amortization Front-Loaded (⚠️): Q2 expected to have the "highest year-over-year content amortization growth rate" before decelerating in 2H. Content amortization could reach $4.5B-$4.7B in Q2, pushing operating margin below 30% temporarily.
• Live Events Scaling: World Baseball Classic in Japan delivered 31.4M viewers — Netflix's most-watched program ever in Japan, sparking largest single sign-up day in company history. BTS The Comeback Live: 18.4M global viewers. Upcoming: Fury vs Joshua heavyweight fight.
• Leadership Change: Reed Hastings (Founder, Chairman) not standing for re-election. Co-CEOs Ted Sarandos and Greg Peters remain. Jay Hoag appointed Board Chairman.
• Ads Tier Growth: Ads plan represents over 60% of Q1 sign-ups in ads countries. Working with 4,000+ advertisers (up 70% Y/Y).
• GenAI Acquisition: Acquired InterPositive (Ben Affleck's filmmaking AI startup) for AI-powered creator tools.
• Share Repurchase: Resumed program with $1.3B in Q1 repurchases, $6.8B remaining on authorization.

⚠️ H-Score signals

• TBI multi factor score: 67 — Previously recorded as 72. Updated per latest H-Score CSV (20.07.2026).

| Component | Score | | :