Netflix, Inc. stock research
FY2025 Q2
Netflix (NFLX) Gross Margin — Quarter Ended Jun 30, 2025
Revenue and gross profit both increased versus the prior quarter and versus the same quarter last year, while cost of revenue was stable compared to the prior quarter and slightly higher versus a year ago. Gross margin improved sequentially and year-over-year, reflecting a larger proportion of revenue flowing through to gross profit.
Gross margin takeaway
Quarter ended Jun 30, 2025 · FY2025 Q2
Revenue and gross profit both increased versus the prior quarter and versus the same quarter last year, while cost of revenue was stable compared to the prior quarter and slightly higher versus a year ago. Gross margin improved sequentially and year-over-year, reflecting a larger proportion of revenue flowing through to gross profit.
- Gross profit grew faster than revenue, making gross margin expansion the strongest observable driver. The relationship between cost of revenue and revenue shifted favorably compared with both prior periods.
- Gross margin was higher than both the immediately preceding quarter and the same quarter one year earlier. The improvement was driven by gross profit increasing more than proportionally relative to revenue, while cost of revenue was essentially flat versus the prior quarter.
Gross margin snapshot
The selected quarter's reported revenue, gross profit, direct costs, and margin comparisons.
Gross margin
51.9%
Gross profit
$5.8B
Revenue
$11.1B
Cost of revenue
$5.3B
Quarter-over-quarter change
+1.9 pts
Year-over-year change
+6.1 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, 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% |
| Jun 30, 2025 | $11.1B | $5.8B | $5.3B | 51.9% |
Quarterly comparisons
Compare the selected margin with the preceding quarter and the same fiscal quarter one year earlier.
Previous-quarter change
Mar 31, 2025
+1.9 pts
Year-over-year change
Jun 30, 2024
+6.1 pts
What the margin says
Filing-constrained interpretation of margin direction, comparisons, and what to monitor next.
Gross profit grew faster than revenue, making gross margin expansion the strongest observable driver. The relationship between cost of revenue and revenue shifted favorably compared with both prior periods.
Gross margin was higher than both the immediately preceding quarter and the same quarter one year earlier. The improvement was driven by gross profit increasing more than proportionally relative to revenue, while cost of revenue was essentially flat versus the prior quarter.
Monitor whether the relationship between cost of revenue and revenue remains stable or shifts, as it has been a key factor in gross margin changes.