Netflix, Inc. stock research
FY2024 Q3
Netflix (NFLX) Gross Margin — Quarter Ended Sep 30, 2024
Revenue rose compared to both the prior quarter and the same quarter a year ago. Gross profit also increased over both periods, while cost of revenue was lower than the prior quarter. As a result, gross margin improved sequentially and compared to the year-ago quarter.
Gross margin takeaway
Quarter ended Sep 30, 2024 · FY2024 Q3
Revenue rose compared to both the prior quarter and the same quarter a year ago. Gross profit also increased over both periods, while cost of revenue was lower than the prior quarter. As a result, gross margin improved sequentially and compared to the year-ago quarter.
- The strongest observable driver of the margin improvement is the combination of higher revenue and a lower cost of revenue relative to the prior quarter, which expanded gross profit proportionally more than revenue.
- Compared to the immediately preceding quarter, revenue and gross profit were higher, cost of revenue was lower, and gross margin improved. Relative to the same quarter one year earlier, revenue, gross profit, and gross margin were all higher, while cost of revenue was also higher.
Gross margin snapshot
The selected quarter's reported revenue, gross profit, direct costs, and margin comparisons.
Gross margin
47.9%
Gross profit
$4.7B
Revenue
$9.8B
Cost of revenue
$5.1B
Quarter-over-quarter change
+2.0 pts
Year-over-year change
+5.6 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 |
|---|---|---|---|---|
| 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% |
| Sep 30, 2024 | $9.8B | $4.7B | $5.1B | 47.9% |
Quarterly comparisons
Compare the selected margin with the preceding quarter and the same fiscal quarter one year earlier.
Previous-quarter change
Jun 30, 2024
+2.0 pts
Year-over-year change
Sep 30, 2023
+5.6 pts
What the margin says
Filing-constrained interpretation of margin direction, comparisons, and what to monitor next.
The strongest observable driver of the margin improvement is the combination of higher revenue and a lower cost of revenue relative to the prior quarter, which expanded gross profit proportionally more than revenue.
Compared to the immediately preceding quarter, revenue and gross profit were higher, cost of revenue was lower, and gross margin improved. Relative to the same quarter one year earlier, revenue, gross profit, and gross margin were all higher, while cost of revenue was also higher.
Monitor the trend in cost of revenue, which declined from the prior quarter but increased compared to the same quarter last year.