UNITED STATES SECURITIES AND EXCHANGE COMMISSION
`Washington, D.C. 20549
`
` _____________________________________________________________________
`
`(Mark One)
`
`☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
`
`FORM 10-K
`
` _____________________________________________________________________
`
`For the fiscal year ended December 31, 2022
`
`OR
`
`☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
`
`For the transition period from
`
` to
`
`Commission File Number: 001-35727
`_____________________________________________________________________
`
`Netflix, Inc.
`
`(Exact name of registrant as specified in its charter)
` _____________________________________________________________________
`
`Delaware
`(State or other jurisdiction of incorporation or organization)
`
`77-0467272
`(I.R.S. Employer Identification No.)
`
`121 Albright Way, Los Gatos, California 95032
`(Address and zip code of principal executive offices)
`(408) 540-3700
`(Registrant’s telephone number, including area code)
` _____________________________________________________________________
`Securities registered pursuant to Section 12(b) of the Act:
`
`Title of each class
`Common stock, par value $0.001 per share
`
`Trading Symbol(s)
`NFLX
`
`Name of each exchange on which registered
`NASDAQ Global Select Market
`
`Securities registered pursuant to Section 12(g) of the Act: None
` _____________________________________________________________________
`
`Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☒ No ☐
`Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☒
`
`Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12
`months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
`
`Indicate by check mark whether the registrant has submitted electronically, every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of
`this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐
`
`Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company.
`See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
`
`Large accelerated filer
`
`Non-accelerated filer
`
`☒
`☐
`
`Accelerated filer
`Smaller reporting company
`Emerging growth company
`
`☐
`☐
`☐
`
`If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial
`accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
`
`Indicate by check mark whether the registrant has filed a report on and attestation to its management's assessment of the effectiveness of its internal control over financial reporting
`under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☒
`
`Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☒
`
`As of June 30, 2022 the aggregate market value of voting stock held by non-affiliates of the registrant, based upon the closing sales price for the registrant’s common stock, as
`reported in the NASDAQ Global Select Market System, was $76,550,886,077. Shares of common stock beneficially owned by each executive officer and director of the registrant and by
`each person known by the registrant to beneficially own 10% or more of the outstanding common stock have been excluded in that such persons may be deemed to be affiliates. This
`determination of affiliate status is not necessarily a conclusive determination for any other purpose.
`
`As of December 31, 2022, there were 445,346,776 shares of the registrant’s common stock, par value $0.001, outstanding.
`
`Parts of the registrant’s Proxy Statement for the registrant’s 2023 Annual Meeting of Stockholders are incorporated by reference into Part III of this Annual Report on Form 10-K.
`
`DOCUMENTS INCORPORATED BY REFERENCE
`
`(cid:21)(cid:19)28
`
`Page 1 of 3 (IPR2023-00757)
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`

`

`Table of Contents
`
`
`
`PART I
`Item 1.
`Item 1A.
`Item 1B.
`Item 2.
`Item 3.
`Item 4.
`
`PART II
`
`Item 5.
`Item 6.
`Item 7.
`Item 7A.
`Item 8.
`Item 9.
`Item 9A.
`Item 9B.
`Item 9C.
`PART III
`Item 10.
`Item 11.
`Item 12.
`Item 13.
`Item 14.
`PART IV
`Item 15.
`Item 16.
`
`
`
`NETFLIX, INC.
`TABLE OF CONTENTS
`
`
`
`
`Business
`Risk Factors
`Unresolved Staff Comments
`Properties
`Legal Proceedings
`Mine Safety Disclosures
`
`
`
`Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
`[Reserved]
`Management’s Discussion and Analysis of Financial Condition and Results of Operations
`Quantitative and Qualitative Disclosures About Market Risk
`Financial Statements and Supplementary Data
`Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
`Controls and Procedures
`Other Information
`Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
`
`
`Directors, Executive Officers and Corporate Governance
`Executive Compensation
`Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
`Certain Relationships and Related Transactions, and Director Independence
`Principal Accountant Fees and Services
`
`
`Exhibits, Financial Statement Schedules
`Form 10-K Summary
`
`Page
`
`
`
`1
`4
`16
`17
`17
`17
`
`18
`19
`20
`29
`29
`29
`30
`32
`32
`
`33
`33
`33
`33
`33
`
`34
`34
`
`
`
`
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`
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`Page 2 of 3 (IPR2023-00757)
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`

`

`Table of Contents
`Item 7.Management’s Discussion and Analysis of Financial Condition and Results of Operations
`
`This section of this Form 10-K generally discusses 2022 and 2021 items and year-to-year comparisons between 2022 and 2021.
`Discussions of 2020 items and year-to-year comparisons between 2021 and 2020 that are not included in this Form 10-K can be found in
`"Management's Discussion and Analysis of Financial Condition and Results of Operations" in Part II, Item 7 of the Company's Annual Report on
`Form 10-K for the fiscal year ended December 31, 2021.
`
`Results of Operations
`
`The following represents our consolidated performance highlights:
`
`
`
`
`
`
`
`$
`
`$
`
`
`
`
`
`
`
`$
`
`$
`
`
`
`
`Financial Results:
`Streaming revenues
`DVD revenues
`Total revenues
`Operating income
`Operating margin
`Global Streaming Memberships:
`Paid net membership additions
`Paid memberships at end of period
`Average paying memberships
`Average monthly revenue per paying membership
`
`As of/ Year Ended December 31,
`
`
`2020
`2021
`2022
`(in thousands, except revenue per membership and percentages)
`
`
`
`
`
`
`31,469,852
`29,515,496
`24,756,675
`
`
`
`
`145,698
`
`182,348
`
`239,381
`$
`$
`
`31,615,550
`
`29,697,844
`
`24,996,056
`$
`$
`
`5,632,831
`
`6,194,509
`
`4,585,289
`18 %
`21 %
`18 %
`
`
`
`
`
`
`
`8,903
`
`18,181
`
`36,573
`
`230,747
`
`221,844
`
`203,663
`222,924
`210,784
`189,083
`
`
`
`11.76
`11.67
`10.91
`
`
`
`
`Change
`2022 vs. 2021
`
`7 %
`(20) %
`6 %
`(9) %
`
`(51) %
`4 %
`6 %
`1 %
`
`$
`
`$
`
`$
`
`$
`
`
`
`Consolidated revenues for the year ended December 31, 2022 increased 6% as compared to the year ended December 31, 2021, due to
`the 6% growth in average paying memberships and a 1% increase in average monthly revenue per paying membership. The increase in
`average monthly revenue per paying membership resulted from our price changes, partially offset by the strengthening of the U.S. dollar relative
`to certain foreign currencies.
`
`The decrease in operating margin is primarily due to revenues growing at a slower rate as compared to the 15% increase in content
`amortization. Revenue growth during the year was impacted by fluctuations in foreign exchange rates, while content amortization increased as a
`result of delays in content releases due to the COVID-19 pandemic impacting the comparable prior year period.
`
`The COVID-19 pandemic and the various responses to it created significant volatility, uncertainty and economic disruption. Recently, there
`has been a return to more normal societal interactions, including the way we operate our business. We cannot predict the future impacts of this
`ongoing and any new pandemic(s). See Part I, Item IA: "Risk Factors" in this Annual Report on Form 10-K for additional details.
`
`Streaming Revenues
`
`
`We derive revenues from monthly membership fees for services related to streaming content to our members. We offer a variety of
`streaming membership plans, the price of which varies by country and the features of the plan. As of December 31, 2022, pricing on our paid
`plans ranged from the U.S. dollar equivalent of $1 to $26 per month. We expect that from time to time the prices of our membership plans in
`each country may change and we may test other plan and price variations.
`
`The following tables summarize streaming revenue and other streaming membership information by region for the years ended
`December 31, 2022, 2021 and 2020.
`
`
`United States and Canada (UCAN)
`
`20
`
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`Page 3 of 3 (IPR2023-00757)
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