Netflix, Inc. stock research
FY2025 Q1
Netflix (NFLX) Gross Margin — Quarter Ended Mar 31, 2025
Revenue increased while cost of revenue decreased, resulting in higher gross profit and an improved gross margin. The filing notes that cash and short-term investments decreased due to stock repurchases and debt repayment, partially offset by cash from operations.
Gross margin takeaway
Quarter ended Mar 31, 2025 · FY2025 Q1
Revenue increased while cost of revenue decreased, resulting in higher gross profit and an improved gross margin. The filing notes that cash and short-term investments decreased due to stock repurchases and debt repayment, partially offset by cash from operations.
- The strongest observable driver is the decline in cost of revenue relative to revenue, which expanded gross margin.
- Compared to the immediately preceding quarter, revenue increased and cost of revenue decreased, leading to a higher gross profit and margin. Versus the same quarter one year earlier, both revenue and gross profit increased, and the margin was also higher.
Gross margin snapshot
The selected quarter's reported revenue, gross profit, direct costs, and margin comparisons.
Gross margin
50.1%
Gross profit
$5.3B
Revenue
$10.5B
Cost of revenue
$5.3B
Quarter-over-quarter change
+6.4 pts
Year-over-year change
+3.2 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 |
|---|---|---|---|---|
| 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% |
| Mar 31, 2025 | $10.5B | $5.3B | $5.3B | 50.1% |
Quarterly comparisons
Compare the selected margin with the preceding quarter and the same fiscal quarter one year earlier.
Previous-quarter change
Dec 31, 2024
+6.4 pts
Year-over-year change
Mar 31, 2024
+3.2 pts
What the margin says
Filing-constrained interpretation of margin direction, comparisons, and what to monitor next.
The strongest observable driver is the decline in cost of revenue relative to revenue, which expanded gross margin.
Compared to the immediately preceding quarter, revenue increased and cost of revenue decreased, leading to a higher gross profit and margin. Versus the same quarter one year earlier, both revenue and gross profit increased, and the margin was also higher.
Monitor the trajectory of cost of revenue as it is a key factor in margin performance.