Netflix, Inc. stock research
FY2024 Q2
Netflix (NFLX) Gross Margin — Quarter Ended Jun 30, 2024
Revenue increased relative to both the prior quarter and the same quarter last year. Gross profit was stable versus the prior quarter but higher year over year, while cost of revenue grew in both periods, resulting in a gross margin that weakened sequentially but improved year over year.
Gross margin takeaway
Quarter ended Jun 30, 2024 · FY2024 Q2
Revenue increased relative to both the prior quarter and the same quarter last year. Gross profit was stable versus the prior quarter but higher year over year, while cost of revenue grew in both periods, resulting in a gross margin that weakened sequentially but improved year over year.
- The sequential decline in gross margin was driven by cost of revenue growing faster than revenue, whereas the year-over-year improvement reflected gross profit growth outpacing cost of revenue growth.
- Compared to the prior quarter, gross margin weakened as cost of revenue increased more than revenue. Compared to the same quarter last year, gross margin strengthened, with both revenue and gross profit rising.
Gross margin snapshot
The selected quarter's reported revenue, gross profit, direct costs, and margin comparisons.
Gross margin
45.9%
Gross profit
$4.4B
Revenue
$9.6B
Cost of revenue
$5.2B
Quarter-over-quarter change
-1.0 pts
Year-over-year change
+3.0 pts
Quarterly gross margin trend
A four-quarter view of the revenue and direct-cost bridge behind gross margin.
| Period | Revenue | Gross profit | Cost of revenue | Gross margin |
|---|---|---|---|---|
| Sep 30, 2023 | $8.5B | $3.6B | $4.9B | 42.3% |
| Dec 31, 2023 | $8.8B | $3.5B | $5.3B | 39.9% |
| Mar 31, 2024 | $9.4B | $4.4B | $5.0B | 46.9% |
| Jun 30, 2024 | $9.6B | $4.4B | $5.2B | 45.9% |
Quarterly comparisons
Compare the selected margin with the preceding quarter and the same fiscal quarter one year earlier.
Previous-quarter change
Mar 31, 2024
-1.0 pts
Year-over-year change
Jun 30, 2023
+3.0 pts
What the margin says
Filing-constrained interpretation of margin direction, comparisons, and what to monitor next.
The sequential decline in gross margin was driven by cost of revenue growing faster than revenue, whereas the year-over-year improvement reflected gross profit growth outpacing cost of revenue growth.
Compared to the prior quarter, gross margin weakened as cost of revenue increased more than revenue. Compared to the same quarter last year, gross margin strengthened, with both revenue and gross profit rising.
Monitor the trend in cost of revenue relative to revenue, as its faster sequential growth pressured gross margin.