Netflix, Inc. stock research
FY2024 Q4
Netflix (NFLX) Gross Margin — Quarter Ended Dec 31, 2024
Revenue was higher than the prior quarter and higher than the same quarter last year. Gross profit was lower than the prior quarter but higher than a year ago; cost of revenue was higher than both comparison periods, and gross margin weakened sequentially relative to the prior quarter but improved from a year earlier.
Gross margin takeaway
Quarter ended Dec 31, 2024 · FY2024 Q4
Revenue was higher than the prior quarter and higher than the same quarter last year. Gross profit was lower than the prior quarter but higher than a year ago; cost of revenue was higher than both comparison periods, and gross margin weakened sequentially relative to the prior quarter but improved from a year earlier.
- The relationship among revenue, cost of revenue, and gross profit shows that cost of revenue grew faster than revenue from the prior quarter, putting downward pressure on gross profit and gross margin. Compared with a year ago, revenue growth outpaced cost growth, leading to a higher gross profit and an improved gross margin.
- Sequentially, gross margin weakened as cost of revenue increased at a faster rate than revenue. Compared to the prior year, gross margin improved, indicating a favorable trend in cost efficiency over the longer term.
Gross margin snapshot
The selected quarter's reported revenue, gross profit, direct costs, and margin comparisons.
Gross margin
43.7%
Gross profit
$4.5B
Revenue
$10.2B
Cost of revenue
$5.8B
Quarter-over-quarter change
-4.2 pts
Year-over-year change
+3.8 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 |
|---|---|---|---|---|
| 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% |
| Dec 31, 2024 | $10.2B | $4.5B | $5.8B | 43.7% |
Quarterly comparisons
Compare the selected margin with the preceding quarter and the same fiscal quarter one year earlier.
Previous-quarter change
Sep 30, 2024
-4.2 pts
Year-over-year change
Dec 31, 2023
+3.8 pts
What the margin says
Filing-constrained interpretation of margin direction, comparisons, and what to monitor next.
The relationship among revenue, cost of revenue, and gross profit shows that cost of revenue grew faster than revenue from the prior quarter, putting downward pressure on gross profit and gross margin. Compared with a year ago, revenue growth outpaced cost growth, leading to a higher gross profit and an improved gross margin.
Sequentially, gross margin weakened as cost of revenue increased at a faster rate than revenue. Compared to the prior year, gross margin improved, indicating a favorable trend in cost efficiency over the longer term.
Monitor the trajectory of cost of revenue relative to revenue in upcoming quarters to see if the sequential weakening in gross margin persists or reverses.