AddedRisk Factors
•adverse legal developments relating to advertising, targeting, or measurement tools;
NFLXNetflix
Netflix, Inc. (“Netflix”, the “Company”, “registrant”, “we”, or “us”) is one of the world’s leading entertainment services offering TV series, films, games and live programming across a wide variety of genres and languages. 10-K, Item 1
- Employees
- 16,000
- Headquarters
- Los Gatos, CA
- Next results
- around Jan 19, 2027
10-K 0001065280-26-000034 (2026-01-23) vs 10-K 0001065280-25-000044 (2025-01-27)
| Section | Compared text | Words now | Changed |
|---|---|---|---|
| Risk Factors | Item 1A | 11,006 | 10.4% |
| MD&A | Item 7 | 4,943 | 27.0% |
| Legal Proceedings | Item 3, via Note 9 – Commitments and Contingencies | 1,170 | 20.0% |
| Accounting Policies | 10-K text, Note 1 – Organization and Summary of Significant Accounting Policies | 3,379 | 14.5% |
The redline: what was cut and what was added
In each section, the paragraph that changed most, marked against last year's 10-K:
cut words struck through, new words highlighted and underlined.
Accounting Policies 153 words changed in this paragraph; it is 35% similar to last year's version.
In December 2023, 2025, the Financial FASB issued ASU 2025-10, Government Grants (Topic 832): Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, for Government Grants Received by Business Entities, which requires public entities, establishes authoritative guidance on an annual basis, to provide the recognition, measurement, presentation, and disclosure of government grants. Under ASU 2025-10, government grants are recognized when it is probable that the entity will both comply with the conditions of the grant and the grant will be received. The ASU provides specific categories accounting models for grants related to assets and grants related to income, including options to recognize government grants as deferred income or as a reduction of the asset’s cost basis. The ASU also requires enhanced disclosures regarding the nature of government grants, significant terms and conditions, accounting policies applied, and amounts recognized in the rate reconciliation, as well as disclosure of income taxes paid disaggregated by jurisdiction. financial statements. ASU 2023-09 2025-10 is effective for fiscal years beginning after December 15, 2024, 2028, including interim periods within those fiscal years, with early adoption permitted. The Company is currently evaluating the impact of adopting ASU 2023-09. 2025-10.
Source: 10-K text, Note 1 – Organization and Summary of Significant Accounting Policies, 10-K 0001065280-26-000034 vs 10-K text, Note 1 – Organization and Summary of Significant Accounting Policies, 10-K 0001065280-25-000044
Legal Proceedings 123 words changed in this paragraph; it is 46% similar to last year's version.
Similar to other U.S. companies doing business in Brazil, the Company is involved in a number of matters with Brazilian the local tax authorities regarding as they pertain to non-income tax assessments. Although the Company believes it has meritorious defenses to these matters, there There is inherent complexity and uncertainty with respect to regarding these matters, and the final outcome outcomes may be materially different from our expectations. During the year ended December 31, 2025, developments in another taxpayer’s judicial proceedings influenced our evaluation of the Company’s most significant non-income tax matter in Brazil and we now believe that it is probable that a loss will be incurred. The cumulative loss recognized as an operating expense in the third quarter of the current potential exposure year related to non-income tax assessments with respect to the various issues with Brazilian tax authorities regarding non-income tax assessments is estimated to be was approximately $ 400 million, which is expected 619 million. We continue to increase over time. accrue incremental non-income taxes that the Company believes are probable of being assessed.
Source: Item 3, via Note 9 – Commitments and Contingencies, 10-K 0001065280-26-000034 vs Item 3, via Note 8 – Commitments and Contingencies, 10-K 0001065280-25-000044
Risk Factors 118 words changed in this paragraph; it is 82% similar to last year's version.
In connection with licensing streaming content, we typically enter into multi-year commitments with studios and other content providers. We also enter into multi-year commitments for content that we produce, either directly or through third parties, including elements associated with these productions such as non-cancelable commitments under talent agreements. The payment terms of these agreements are not tied to member usage or the size of our membership base (“fixed cost”) but may be determined by costs of production or tied to such factors as titles licensed and/or theatrical exhibition receipts. Such commitments, to the extent estimable under accounting standards, are included in the Contractual Obligations section of Part II, Item 7, "Management's “Management's Discussion and Analysis of Financial Condition and Results of Operations" Operations” and Note 8, 9, Commitments and Contingencies in the accompanying notes to our consolidated financial statements included in Part II, Item 8, "Financial “Financial Statements and Supplementary Data" Data” of this Annual Report on Form 10-K. Given the multiple-year duration and largely fixed cost nature of content commitments, if business performance does not meet our expectations, our margins may be adversely impacted. Further, we may be unable to react to any reduction in our cash flows from operations, including those caused by a downturn in the economy, by reducing our streaming content obligations in the near-term. Payment terms for certain content commitments, such as content we directly produce, will typically require more up-front cash payments than other content licenses or arrangements whereby we do not fund the production of such content. To the extent revenue growth does not meet our expectations, our liquidity and results of operations could be adversely affected as a result of content commitments and accelerated payment requirements of certain agreements. In addition, the long-term and largely fixed cost nature of our content commitments may limit our flexibility in planning for, or reacting to changes in our business and the market segments in which we operate. If we license and/or produce content that is not favorably received by consumers in a territory, or is unable to be shown in a territory, acquisition and retention may be adversely impacted and given the long-term and fixed cost nature of our content commitments, we may not be able to adjust our content offerings quickly and our results of operations may be adversely impacted.
Source: Item 1A, 10-K 0001065280-26-000034 vs Item 1A, 10-K 0001065280-25-000044
MD&A 109 words changed in this paragraph; it is 31% similar to last year's version.
Source: Item 7, 10-K 0001065280-26-000034 vs Item 7, 10-K 0001065280-25-000044
Every change, by type
Sentences and paragraphs of NFLX's Risk Factors and MD&A, 10-K 2026-01-23 against 10-K 2025-01-27. Each links to the text at sec.gov.
Quiet changes are sentences kept from last year with one to four words changed, at least one of them a hedge, a modal or a qualifier
(may, could, will, not, significant, material…). A year or date rolling forward is not counted.
The full word list
adverse, adversely, all, although, anticipate, anticipates, any, approximately, believe, believes, can, cannot, certain, could, expect, expects, generally, however, if, intend, intends, largely, likely, many, material, materially, may, might, most, must, never, no, not, possible, primarily, probable, should, significant, significantly, some, substantial, substantially, unlikely, will, would
AddedRisk Factors
require ongoing monitoring and updating as technologies change and efforts to overcome security measures become more sophisticated, and may limit the functionality of or otherwise negatively impact our service offering and systems. Any significant disruption to our service or access to our systems could result in a loss of members, damage our reputation, and adversely affect our business and results of operations. Further, a penetration of our systems or a third-party’s systems or other misappropriation or misuse of personal information could subject us to business, regulatory, litigation and reputation risk, which could have a negative effect on our business, financial condition and results of operations.
AddedRisk Factors
In connection with our transaction with WBD to acquire WBD’s streaming and studios businesses, including its film and television studios, HBO Max and HBO (such transaction, the “WBD transaction”), we expect to incur and/or assume a substantial amount of additional indebtedness, which will materially increase the amount of our outstanding indebtedness and could subject us to additional risks. We have obtained commitments from financing sources to provide up to a $42.2 billion senior unsecured bridge term loan facility, and we have entered into a $5 billion senior unsecured revolving credit facility and a $20 billion senior unsecured delayed draw term loan facility. We may draw on such facilities or issue or obtain other debt financing to finance a portion of the cash consideration for the WBD transaction. In addition, upon completion of the WBD transaction, we expect to assume additional outstanding debt of WBD. The terms of the indebtedness we may incur or assume in connection with the WBD transaction could vary materially and may include secured debt and/or debt with restrictive covenants that are more burdensome than those in our existing debt arrangements. To the extent these covenants remain in effect after closing, they could reduce the combined company’s operating and financial flexibility, and the substantial indebtedness to be incurred or assumed in connection with the WBD transaction could further exacerbate the risks described above.
AddedRisk Factors
The WBD transaction may not be completed on the currently contemplated timeline or terms, or at all.
AddedRisk Factors
Consummation of the WBD transaction is conditioned on, among other things, obtaining necessary governmental and regulatory approvals. If any of the conditions to the WBD transaction are not satisfied, it could delay or prevent the WBD transaction from occurring, which could result in Netflix’s obligation to pay a $5.8 billion termination fee in certain specified circumstances. Further, as a condition to their approval of the WBD transaction, regulatory agencies may impose requirements, limitations or costs or require divestitures or place restrictions on the conduct of WBD's streaming and studios businesses after the closing. These requirements, limitations, costs, divestitures or restrictions could jeopardize or delay the consummation of the WBD transaction, may result in a material adverse effect on WBD's streaming and studios businesses or may reduce the anticipated benefits of the WBD transaction.
AddedRisk Factors
The WBD transaction may cause our financial results to differ from expectations, we may not achieve the anticipated benefits of the WBD transaction, and the WBD transaction may disrupt our current plans or operations.
AddedRisk Factors
The success of the WBD transaction will depend, in part, on our ability to successfully integrate the acquired businesses and realize the anticipated benefits, including synergies. Difficulties in integrating the acquired businesses may result in the failure to realize anticipated synergies in the expected timeframes, in operational challenges, and in the diversion of management’s attention from ongoing business opportunities, challenges and risks, as well as in unforeseen expenses associated with the WBD transaction, which may have an adverse impact on our financial results.
RemovedRisk Factors
RemovedRisk Factors
RemovedRisk Factors
RemovedRisk Factors
RemovedRisk Factors
RewordedRisk Factors
RewordedRisk Factors
Competitors include other entertainment video providers, such as linear television, and streaming entertainment providers (including those that provide pirated content), video gaming providers, open content platform providers, which provide access to user-generated and professionally produced content, as well as user-generated content, some of which are by professional content creators, and more broadly against other sources of entertainment, such as social media, that our members could choose in their moments of free time.
RewordedRisk Factors
Any actual or perceived failure to comply with the GDPR, the California Consumer Privacy Act/CPRA, other data privacy laws or regulations, or related contractual or other obligations, or any perceived privacy rights violation, have and could in the future lead to investigations, claims, and proceedings by governmental entities and private parties, which to date have not been material but may result in significant damages for contract breach, and other significant costs, penalties, and other liabilities, as well as harm to our reputation and market position.
RewordedRisk Factors
If we are unable to maintain our fraud and chargeback rate at acceptable levels, card networks may impose fines, our card approval rate may be impacted and we may be subject to additional card authentication requirements.
RewordedRisk Factors
If actual viewing patterns differ from these estimates, the pattern and/or period of amortization would be changed and could affect the timing or recognition of content amortization.
RewordedRisk Factors
In addition, the use or adoption of new and emerging technologies may increase our exposure to intellectual property claims, and the availability of copyright and other intellectual property protection for AI-generated material is uncertain. claims.
RewordedRisk Factors
Likewise, if our recommendation and merchandising technology does not enable us to predict and recommend titles that our members will enjoy, enjoy or our competitors' technology provides a better experience to consumers, our ability to attract and retain members may be adversely affected.
RewordedRisk Factors
To the extent our content content, including any advertisements that may appear on our service, is perceived as low quality, offensive or otherwise not compelling to consumers, our ability to establish and maintain a positive reputation may be adversely impacted.
RewordedRisk Factors
To the extent our content content, including any advertisements, is deemed controversial or offensive by government regulators, we may face direct or indirect retaliatory action or behavior, including being
RewordedRisk Factors
To the extent revenue growth does not meet our expectations, our liquidity and results of operations could be adversely affected as a result of content commitments and accelerated payment requirements of certain agreements.
RewordedRisk Factors
Such commitments, to the extent estimable under accounting standards, are included in the Contractual Obligations section of Part II, Item 7, "Management's “Management's Discussion and Analysis of Financial Condition and Results of Operations" Operations” and Note 8, 9, Commitments and Contingencies in the accompanying notes to our consolidated financial statements included in Part II, Item 8, "Financial “Financial Statements and Supplementary Data" Data” of this Annual Report on Form 10-K.
RewordedRisk Factors
Members cancel our service for many reasons, including a perception that they do not use the service sufficiently, that they need to cut household expenses, dissatisfaction with content, including any advertisements that may appear on our service, a preference for competitive services and customer service issues that they believe are not satisfactorily resolved.
Quiet changesRisk Factors
If we fail to maintain a positive reputation concerning our service and the content we offer, including any advertisements, we may not be able to attract or retain members, we may face regulatory scrutiny and our operating results may be adversely affected.
Quiet changesRisk Factors
Moreover, we may incur additional indebtedness in the future and incur other obligations, including any additional streaming content obligations.
Quiet changesRisk Factors
AddedMD&A
(1) During the year ended December 31, 2025, we discontinued the reporting of membership numbers, including average paying memberships and average monthly revenue per paying membership, focusing instead on revenue and operating margin as the primary financial metrics that we believe best represent our business performance.
AddedMD&A
(3) See the “Non-GAAP Constant Currency Information” section below for additional details on our use of constant currency revenue.
AddedMD&A
On April 12, 2024, we entered into a five-year, $3 billion unsecured revolving credit facility that matures on April 12, 2029 (the “Revolving Credit Agreement”). In May 2025, we established a $3 billion commercial paper program (the “Commercial Paper Program”) under which we may issue short-term unsecured commercial paper notes. On December 4, 2025, we entered into a bridge commitment letter pursuant to which the commitment parties agreed to provide, subject to customary conditions, a $59 billion senior unsecured bridge term loan facility to finance the purchase price for the WBD transaction, to pay fees, costs and expenses incurred in connection with the WBD transaction and, at our option, to refinance certain indebtedness (the “Bridge Facility Commitments”). On December 19, 2025, we replaced a portion of the Bridge Facility Commitments with a $5 billion unsecured revolving credit facility and a $20 billion unsecured delayed draw term loan facility (collectively, the “Transaction Credit Facilities”), which reduced the outstanding Bridge Facility Commitments to $34 billion.
AddedMD&A
As of December 31, 2025, no amounts have been borrowed under the Revolving Credit Agreement, Commercial Paper Program, Bridge Facility Commitments, or the Transaction Credit Facilities.
AddedMD&A
On January 19, 2026, in connection with the Amended and Restated Merger Agreement (as defined below), the Company entered into a bridge facility incremental commitments agreement (the "Incremental Commitments Agreement"). The Incremental Commitments Agreement increased the existing commitments under the Company's Bridge Facility Commitments from $34 billion to $42.2 billion of senior unsecured bridge term loan commitments for the purpose of financing the purchase price under the Amended and Restated Merger Agreement, paying certain other fees, costs and expenses incurred in connection with the WBD transaction and, at the Company's option, refinancing certain indebtedness.
AddedMD&A
See Note 7 Debt and Note 14 Subsequent Event for further information on the financing arrangements the Company has entered into in connection with the WBD transaction.
AddedMD&A
We currently anticipate that cash flows from operations, available funds and access to financing sources, including under our Revolving Credit Facility, Commercial Paper Program, the Bridge Facility Commitments and the Transaction Credit Facilities, will continue to be sufficient to meet our cash needs for the next twelve months and beyond.
AddedMD&A
On December 4, 2025, we entered into a definitive agreement and plan of merger with WBD to acquire WBD's streaming and studios businesses, including its film and television studios, HBO Max and HBO, which was amended and restated by the parties thereto on January 19, 2026 (as so amended and restated, the “Amended and Restated Merger Agreement”). WBD is a leading global media and entertainment company and will separate its Global Linear Networks business, Discovery Global, into a new publicly-traded company prior to the closing of the WBD transaction. Under the terms of the Amended and Restated Merger Agreement, each WBD stockholder will receive $27.75 in cash (as may be adjusted in accordance with the terms of the Amended and Restated Merger Agreement) for each share of WBD common stock outstanding as of immediately prior to the closing of the WBD transaction, for a total equity value of approximately $72.0 billion and an enterprise value of approximately $82.7 billion (in each case, as of December 4, 2025). The total equity value and enterprise value of the WBD transaction may fluctuate based on WBD's capitalization as of the closing of the WBD transaction. We expect the WBD transaction to close in 12-18 months from December 4, 2025, subject to receipt of required regulatory approvals, approval of WBD stockholders, the consummation of the separation and distribution of Discovery Global and other customary closing conditions. See Note 6 Acquisitions and Note 9 Commitments and Contingencies for further information.
RemovedMD&A
RemovedMD&A
RemovedMD&A
RewordedMD&A
Net cash provided by (used in) investing activities for the year ended December 31, 2024 decreased $2,724 2025 increased $3,223 million as compared to the year ended December 31, 2023, 2024, primarily due to there being no maturities net cash inflows of $1,747 million from maturities, sales and purchases of investments in the year ended December 31, 2024, 2025 as compared to maturities cash outflows of investments of $1,395 $1,742 million in the year ended December 31, 2023, coupled with an increase in from purchases of investments of $1,237 in the corresponding period in 2024, partially offset by a $249 million and an increase in purchases of property and equipment of $91 million. equipment.
RewordedMD&A
RewordedMD&A
Net cash used in financing activities for the year ended December 31, 2024 decreased $1,876 2025 increased $6,271 million as compared to the year ended December 31, 2023, 2024, primarily due driven by changes in cash flows related to proceeds from the issuance and repayment of debt of $1,794 million in the year ended December 31, 2024 and a $663 million increase in the proceeds from the issuance of common stock. debt.
RewordedMD&A
Net cash provided by operating activities for the year ended December 31, 2024 2025 increased $87 $2,788 million as compared to the year ended December 31, 2023, 2024, primarily driven by a $3,304 $2,270 million or 61% 26% increase in net income, an income and a $1,646 million increase in adjustments for non-cash expenses, and favorable changes in working capital, partially offset by an a $705 million increase in payments for content assets. assets and $423 million in unfavorable changes in working capital.
RewordedMD&A
Debt, net of debt issuance costs and discounts, increased $1,040 decreased $1,120 million primarily due to the issuance of $1,800 approximately $1,833 million in additional Senior Notes, repayments of debt, partially offset by the repayment upon maturity of the $400 million aggregate principal amount of our 5.750% Senior Notes and the remeasurement of our euro-denominated Euro-denominated notes in the year ended December 31, 2024. 2025.
RewordedMD&A
Cash, cash equivalents, restricted cash and short-term investments increased $2,447 decreased $518 million in the year ended December 31, 2024 2025 primarily due to cash provided by operations, issuance of debt, and proceeds from issuance of common stock, partially offset by the repurchase of stock and repayment of debt. debt, partially offset by cash provided by operations.
RewordedMD&A
The increase in interest expense for the year ended December 31, 2024 2025 as compared to the year ended December 31, 2023 2024 was due primarily driven by higher amortization of debt issuance costs, including approximately $60 million related to financing arrangements entered into in connection with the increase in debt. WBD transaction.
RewordedMD&A
Operating margin for the year ended December 31, 2024 2025 increased six by approximately three percentage points as compared to the prior comparative period, primarily due to driven by the growth in revenues growing at a faster rate as compared to outpacing the growth in cost of revenues, sales and marketing, and technology and development expenses, coupled with lower general and administrative expenses.
RewordedMD&A
RewordedMD&A
The increase in cost of revenues for the year ended December 31, 2024 2025 as compared to the year ended December 31, 2023 2024 was primarily due to a $1,104 $1,121 million increase in content amortization relating to our existing and new content. content, coupled with a $1,116 million increase in other cost of revenues, primarily driven by non-income tax assessments in Brazil.
RewordedMD&A
Sales and marketing expenses consist primarily of advertising expenses for promotional activities such as digital and television advertising, and certain payments made to marketing and advertising sales partners, including consumer electronics ("CE") manufacturers, multichannel video programming distributors ("MVPDs"), mobile operators, and ISPs. partners.
RewordedMD&A
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