Netflix, Inc. stock research
FY2026 Q1
Netflix (NFLX) Gross Margin — Quarter Ended Mar 31, 2026
Revenue and gross profit increased compared to both the previous quarter and the same quarter a year earlier. Gross margin improved from the previous quarter and was also higher than the year-ago quarter.
Gross margin takeaway
Quarter ended Mar 31, 2026 · FY2026 Q1
Revenue and gross profit increased compared to both the previous quarter and the same quarter a year earlier. Gross margin improved from the previous quarter and was also higher than the year-ago quarter.
- The strongest observable driver was the change in cost of revenue relative to revenue. Compared to the previous quarter, cost of revenue declined while revenue rose, leading to an expanded gross margin.
- Compared to the previous quarter, revenue and gross profit were higher, while cost of revenue was lower. Compared to the same quarter a year earlier, revenue and gross profit were higher, and cost of revenue was also higher, but gross margin improved as revenue grew more than cost of revenue.
Gross margin snapshot
The selected quarter's reported revenue, gross profit, direct costs, and margin comparisons.
Gross margin
51.9%
Gross profit
$6.4B
Revenue
$12.2B
Cost of revenue
$5.9B
Quarter-over-quarter change
+6.1 pts
Year-over-year change
+1.9 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, 2025 | $11.1B | $5.8B | $5.3B | 51.9% |
| Sep 30, 2025 | $11.5B | $5.3B | $6.2B | 46.4% |
| Dec 31, 2025 | $12.1B | $5.5B | $6.5B | 45.9% |
| Mar 31, 2026 | $12.2B | $6.4B | $5.9B | 51.9% |
Quarterly comparisons
Compare the selected margin with the preceding quarter and the same fiscal quarter one year earlier.
Previous-quarter change
Dec 31, 2025
+6.1 pts
Year-over-year change
Mar 31, 2025
+1.9 pts
What the margin says
Filing-constrained interpretation of margin direction, comparisons, and what to monitor next.
The strongest observable driver was the change in cost of revenue relative to revenue. Compared to the previous quarter, cost of revenue declined while revenue rose, leading to an expanded gross margin.
Compared to the previous quarter, revenue and gross profit were higher, while cost of revenue was lower. Compared to the same quarter a year earlier, revenue and gross profit were higher, and cost of revenue was also higher, but gross margin improved as revenue grew more than cost of revenue.
Monitor the trajectory of cost of revenue relative to revenue in upcoming quarters.
Peer context
Latest available gross margins for related public companies.
| Company | Gross margin |
|---|---|
| Netflix, Inc. (NFLX) | 51.9% |
| Meta Platforms, Inc. (META) | 81.9% |