Netflix (WBO:NFLX) Gross Margin % : 47.89% (As of Sep. 2024)

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What is Netflix Gross Margin %?

Gross Margin % is calculated as gross profit divided by its revenue. Netflix's Gross Profit for the three months ended in Sep. 2024 was €4,239 Mil. Netflix's Revenue for the three months ended in Sep. 2024 was €8,852 Mil. Therefore, Netflix's Gross Margin % for the quarter that ended in Sep. 2024 was 47.89%.

The historical rank and industry rank for Netflix's Gross Margin % or its related term are showing as below:

WBO:NFLX' s Gross Margin % Range Over the Past 10 Years
Min: 29.14 Med: 37.59 Max: 45.25
Current: 45.25

During the past 13 years, the highest Gross Margin % of Netflix was 45.25%. The lowest was 29.14%. And the median was 37.59%.

WBO:NFLX's Gross Margin % is ranked better than
60.33% of 958 companies
in the Media - Diversified industry
Industry Median: 38.685 vs WBO:NFLX: 45.25

Netflix had a gross margin of 47.89% for the quarter that ended in Sep. 2024 => Durable competitive advantage

The 5-Year average Growth Rate of Gross Margin for Netflix was 2.20% per year.

Netflix Gross Margin % Historical Data

The historical data trend for Netflix's Gross Margin % can be seen below:

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

* Premium members only.

Netflix Gross Margin % Chart

Netflix Annual Data

Trend

Dec14

Dec15

Dec16

Dec17

Dec18

Dec19

Dec20

Dec21

Dec22

Dec23

Gross Margin %

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38.28

38.89

41.64

39.37

41.54

Netflix Quarterly Data
	Dec19	Mar20	Jun20	Sep20	Dec20	Mar21	Jun21	Sep21	Dec21	Mar22	Jun22	Sep22	Dec22	Mar23	Jun23	Sep23	Dec23	Mar24	Jun24	Sep24
Gross Margin %	Get a 7-Day Free Trial															42.27	39.91	46.89	45.87	47.89

Competitive Comparison of Netflix's Gross Margin %

For the Entertainment subindustry, Netflix's Gross Margin %, along with its competitors' market caps and Gross Margin % data, can be viewed below:

* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.

Netflix's Gross Margin % Distribution in the Media - Diversified Industry

For the Media - Diversified industry and Communication Services sector, Netflix's Gross Margin % distribution charts can be found below:

* The bar in red indicates where Netflix's Gross Margin % falls into.

Netflix Gross Margin % Calculation

Gross Margin is the percentage of Gross Profit out of sales or Revenue.

Netflix's Gross Margin for the fiscal year that ended in Dec. 2023 is calculated as

Gross Margin % (A: Dec. 2023 )	=	Gross Profit (A: Dec. 2023 )	/	Revenue (A: Dec. 2023 )
	=	12845.3	/	30924.263
	=	(Revenue - Cost of Goods Sold)	/	Revenue
	=	(30924.263 - 18078.992)	/	30924.263
	=	41.54 %

Netflix's Gross Margin for the quarter that ended in Sep. 2024 is calculated as

Gross Margin % (Q: Sep. 2024 )	=	Gross Profit (Q: Sep. 2024 )	/	Revenue (Q: Sep. 2024 )
	=	4239	/	8852.057
	=	(Revenue - Cost of Goods Sold)	/	Revenue
	=	(8852.057 - 4613.015)	/	8852.057
	=	47.89 %

A positive Gross Profit is only the first step for a company to make a net profit. The gross profit needs to be big enough to also cover related labor, equipment, rental, marketing/advertising, research and development and a lot of other costs in selling the products.

Netflix (WBO:NFLX) Gross Margin % Explanation

Warren Buffett believes that firms with excellent long term economics tend to have consistently higher margins.

Durable competitive advantage creates a high Gross Margin % because of the freedom to price in excess of cost. Companies can be categorized by their Gross Margin %

1. Greater than 40% = Durable competitive advantage
2. Less than 40% = Competition eroding margins
3. Less than 20% = no sustainable competitive advantage
Consistency of Gross Margin is key

Netflix had a gross margin of 47.89% for the quarter that ended in Sep. 2024 => Durable competitive advantage

Be Aware

If a company loses its competitive advantages, usually its gross margin declines well before its sales declines. Watching Gross Margin % and Operating Margin % closely helps avoid value trap situations.

Netflix Gross Margin % Related Terms

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Netflix Business Description

Industry

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Address

121 Albright Way, Los Gatos, CA, USA, 95032

Website

https://www.netflix.com

Netflix's relatively simple business model involves only one business, its streaming service. It has the biggest television entertainment subscriber base in both the United States and the collective international market, with more than 280 million subscribers globally. Netflix has exposure to nearly the entire global population outside of China. The firm has traditionally avoided live programming or sports content, instead focusing on on-demand access to episodic television, movies, and documentaries. The firm recently began introducing ad-supported subscription plans, giving the firm exposure to the advertising market in addition to the subscription fees that have historically accounted for nearly all its revenue.