v3.26.1
REPORTABLE SEGMENTS
 3 Months Ended
Mar. 31, 2026
Segment Reporting [Abstract]  
REPORTABLE SEGMENTS REPORTABLE SEGMENTS
The Company’s operating segments are determined based on: (i) financial information reviewed by its chief operating decision maker (“CODM”), the CEO, (ii) internal management and related reporting structure, and (iii) the basis upon which the CEO makes resource allocation decisions.
The accounting policies of the reportable segments are the same as the Company’s, except that certain inter-segment transactions that are eliminated for consolidation are not eliminated at the segment level. Inter-segment transactions primarily include advertising and content licenses. The Company generally records inter-segment transactions of content licenses at market value. The Company does not report assets by segment because it is not used by the CODM to allocate resources or evaluate segment performance.
The Company evaluates the operating performance of its segments based on financial measures such as revenues and Adjusted EBITDA. Adjusted EBITDA is defined as operating income excluding:
•employee share-based compensation;
•depreciation and amortization;
•restructuring and facility consolidation;
•certain impairment charges;
•gains and losses on business and asset dispositions;
•third-party transaction and integration costs;
•amortization of purchase accounting fair value step-up for content;
•amortization of capitalized interest for content; and
•other items impacting comparability.
The CODM uses this measure to assess the operating results and performance of the segments, perform analytical comparisons, identify strategies to improve performance, and allocate resources to each segment. The Company believes Adjusted EBITDA is relevant to investors because it allows them to analyze the operating performance of each segment using the same metric management uses. The Company excludes employee share-based compensation, restructuring, certain impairment charges, gains and losses on business and asset dispositions, and transaction and integration costs from the calculation of Adjusted EBITDA due to their impact on comparability between periods. Integration costs include transformative system implementations and integrations, such as Enterprise Resource Planning systems, and may take several years to complete. The Company also excludes the depreciation of fixed assets and amortization of intangible assets, amortization of purchase accounting fair value step-up for content (which is included in consolidated costs of revenues), and amortization of capitalized interest for content, as these amounts do not represent cash payments in the current reporting period.
The tables below present summarized financial information for each of the Company’s reportable segments (in millions).
Revenues
 Three Months Ended March 31,
20262025
Streaming$2,887 $2,656 
Studios3,125 2,314 
Global Linear Networks4,377 4,774 
Corporate1 — 
Inter-segment eliminations (1,497)(765)
Total revenues$8,893 $8,979 
Reconciliation of Revenues to Segment Adjusted EBITDA
Three months ended March 31, 2026
StreamingStudiosGlobal Linear Networks
Revenues$2,887 $3,125 $4,377 
Less:
Content expense (a)
1,531 1,603 1,592 
Personnel expense (b)
186 251 529 
Marketing expense285 275 129 
Other segment expenses (c)
447 221 493 
Segment Adjusted EBITDA$438 $775 $1,634 

Three months ended March 31, 2025
StreamingStudiosGlobal Linear Networks
Revenues$2,656 $2,314 $4,774 
Less:
Content expense (a)
1,504 1,339 1,832 
Personnel expense (b)
186 230 496 
Marketing expense220 252 104 
Other segment expenses (c)
407 234 549 
Segment Adjusted EBITDA$339 $259 $1,793 
(a) Content expense includes amortization, impairments, participations, residuals, development expense, and production costs, including talent costs, and is a component of costs of revenues. Content expense excludes content impairments and other development costs recorded in restructuring and other charges, amortization of purchase accounting fair value step-up for content, and amortization of capitalized interest for content as these items are excluded from the calculation of Adjusted EBITDA.
(b) Personnel expense is a component of costs of revenues and selling, general and administrative expense. Personnel expense includes marketing personnel compensation and excludes commissions (included in other segment expenses) and talent costs (included in content expense).
(c) Other segment expenses include distribution costs, other direct costs, software and hardware costs, IT services, professional and consulting fees, commissions, and certain other overhead costs. Other segment expenses exclude depreciation and amortization, amortization of purchase accounting fair value step-up for content, amortization of capitalized interest for content, employee share-based compensation, third-party transaction and integration costs, and other items impacting comparability as these items are excluded from the calculation of Adjusted EBITDA.
Reconciliation of segment adjusted EBITDA to loss before income taxes
 Three Months Ended March 31,
20262025
Streaming$438 $339 
Studios775 259 
Global Linear Networks1,634 1,793 
Segment Adjusted EBITDA2,847 2,391 
Depreciation and amortization1,226 1,547 
Employee share-based compensation150 120 
Restructuring and other charges204 54 
Netflix Termination Fee (See Note 1)
2,800 — 
Transaction and integration costs173 80 
Facility consolidation costs— 5 
Impairment and amortization of fair value step-up for content102 240 
Amortization of capitalized interest for content3 6 
Impairments and loss on dispositions14 90 
Corporate269 233 
Inter-segment eliminations 375 53 
Other expense (income), net38 (82)
Loss from equity investees, net5 7 
Loss on extinguishment of debt, net27 4 
Interest expense, net581 468 
Loss before income taxes$(3,120)$(434)