Is the business good?
How good a business is NFLX?
Netflix earns 32% on the capital it employs against a 9.0% cost of capital, so the business is worth more the bigger it gets.
32%
Return on invested capital · cost of capital 9.0% · 23 points above what the capital costs: growth creates value
- Operating margin
- 30%
Operating margin · Entertainment median 12% · 12 months to Q2 2026
- Cash conversion
- 0.82×
Cash conversion · 0.83× a year ago · some of the reported profit has not turned into cash yet
- Share count, year on year
- −2.0%
Share count, year on year · bought back, each share owns more of the company
| Year | Operating margin |
|---|---|
| FY2020 | 18% |
| FY2021 | 21% |
| FY2022 | 18% |
| FY2023 | 21% |
| FY2024 | 27% |
| FY2025 | 29% |
Details›
- Gross margin12 months to Q2 2026
- 49%
- Operating margin12 months to Q2 2026
- 30%
- Net margin12 months to Q2 2026
- 28%
- Free cash flow margin
- 23%
- R&D as % of revenue
- 7.7%
- Revenue, trailing twelve months
- $48.4B
- Free cash flow, trailing twelve months
- $11.2B
- Net income, trailing twelve months
- $13.6B
- Return on invested capitaloperating profit after tax ÷ debt + equity − cash
- 32%
Margins, capital and share counts from the statements as filed with the SEC; cash conversion from the cash flow statement.