v3.26.1
REPORTABLE SEGMENTS
 6 Months Ended
Jun. 30, 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 June 30,Six Months Ended June 30,
2026202520262025
Streaming$3,079 $2,793 $5,966 $5,449 
Studios2,328 3,801 5,453 6,115 
Global Linear Networks3,991 4,803 8,368 9,577 
Corporate1 1 2 1 
Inter-segment eliminations (682)(1,586)(2,179)(2,351)
Total revenues$8,717 $9,812 $17,610 $18,791 
Reconciliation of Revenues to Segment Adjusted EBITDA
Three months ended June 30, 2026
StreamingStudiosGlobal Linear Networks
Revenues$3,079 $2,328 $3,991 
Less:
Content expense (a)
1,569 1,442 1,400 
Personnel expense (b)
187 235 509 
Marketing expense344 307 137 
Other segment expenses (c)
467 248 499 
Segment Adjusted EBITDA$512 $96 $1,446 
Three months ended June 30, 2025
StreamingStudiosGlobal Linear Networks
Revenues$2,793 $3,801 $4,803 
Less:
Content expense (a)
1,600 2,135 2,105 
Personnel expense (b)
191 232 505 
Marketing expense294 363 115 
Other segment expenses (c)
415 208 566 
Segment Adjusted EBITDA$293 $863 $1,512 
Six months ended June 30, 2026
StreamingStudiosGlobal Linear Networks
Revenues$5,966 $5,453 $8,368 
Less:
Content expense (a)
3,100 3,045 2,992 
Personnel expense (b)
373 486 1,038 
Marketing expense629 582 266 
Other segment expenses (c)
914 469 992 
Segment Adjusted EBITDA$950 $871 $3,080 
Six months ended June 30, 2025
StreamingStudiosGlobal Linear Networks
Revenues$5,449 $6,115 $9,577 
Less:
Content expense (a)
3,104 3,474 3,937 
Personnel expense (b)
377 462 1,001 
Marketing expense514 615 219 
Other segment expenses (c)
822 442 1,115 
Segment Adjusted EBITDA$632 $1,122 $3,305 
(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 June 30,Six Months Ended June 30,
2026202520262025
Streaming$512 $293 $950 $632 
Studios96 863 871 1,122 
Global Linear Networks1,446 1,512 3,080 3,305 
Segment Adjusted EBITDA2,054 2,668 4,901 5,059 
Depreciation and amortization1,159 1,447 2,385 2,994 
Employee share-based compensation187 173 337 293 
Restructuring and other charges113 80 317 134 
Netflix Termination Fee (See Note 1)
— — 2,800 — 
Transaction and integration costs72 17 245 97 
Facility consolidation costs— 4 — 9 
Impairment and amortization of fair value step-up for content77 388 179 628 
Amortization of capitalized interest for content11 3 14 9 
Impairments and loss on dispositions23 26 37 116 
Corporate298 316 567 549 
Inter-segment eliminations (123)399 252 452 
Other income, net(50)(139)(12)(221)
(Income) loss from equity investees, net(28)(5)(23)2 
Loss (gain) on extinguishment of debt, net75 (2,958)102 (2,954)
Interest expense, net511 463 1,092 931 
(Loss) income before income taxes$(271)$2,454 $(3,391)$2,020