NFLX

Netflix is firing on the metrics that matter. FY2025 revenue of $45.2B grew 15.9%, the fifth straight year of expansion (29.7→31.6→33.7→39.0→45.2B), and the regional split shows the engine is still international — APAC +21% and EMEA +17% versus UCAN +15% and a decelerating LATAM +11%. The standout is operating leverage: operating margin climbed to 29.5% from 26.7% in 2024 and 20.6% in 2023, which MD&A attributes to revenue growth outpacing cost of revenues, S&M and G&A. That carried operating income up 27.9% to $13.3B, net income up 26.1% to $11.0B, and diluted EPS up 27.8% to $2.53. ROE of 41.3% confirms this is capital-efficient growth, not growth bought with the balance sheet. (One data note: the gross-profit line is tagged FY2011/$1.16B and the resulting 2.6% gross margin is not meaningful, so I rely on the operating and net margins, which are consistent with the MD&A.)

The balance sheet and cash generation underwrite the quality. Operating cash flow rose 37.9% to $10.1B against just $688M of capex, leaving roughly $9.4B of free cash flow. Long-term debt fell 2.4% to $13.5B and the current portion dropped 44% to $999M; against $9.03B of cash, $13.3B of operating income and 1.09x liabilities/equity, leverage is comfortably serviced. Management is returning that cash aggressively — $9.13B of buybacks (+45.7%) — which shrinks the share base and supports per-share growth, while retained earnings grew 35.1% to $42.3B.