NETFLIX INC, 10-Q filed on 10/22/2020
Quarterly Report
v3.20.2
Cover Page
 9 Months Ended
Sep. 30, 2020
shares
Cover [Abstract]  
Document Type 10-Q
Document Quarterly Report true
Document Period End Date Sep. 30, 2020
Document Transition Report false
Entity File Number 001-35727
Entity Registrant Name Netflix, Inc.
Entity Incorporation, State or Country Code DE
Entity Tax Identification Number 77-0467272
Entity Address, Address Line One 100 Winchester Circle,
Entity Address, City or Town Los Gatos,
Entity Address, State or Province CA
Entity Address, Postal Zip Code 95032
City Area Code 408
Local Phone Number 540-3700
Title of each class Common stock, par value $0.001 per share
Trading Symbol NFLX
Security Exchange Name NASDAQ
Entity Current Reporting Status Yes
Entity Interactive Data Current Yes
Entity Filer Category Large Accelerated Filer
Entity Small Business false
Entity Emerging Growth Company false
Entity Shell Company false
Entity Common Stock, Shares Outstanding 441,795,008
Entity Central Index Key 0001065280
Current Fiscal Year End Date --12-31
Document Fiscal Year Focus 2020
Document Fiscal Period Focus Q3
Amendment Flag false
v3.20.2
Consolidated Statements of Operations - USD ($)
shares in Thousands, $ in Thousands
 3 Months Ended 9 Months Ended
Sep. 30, 2020
Sep. 30, 2019
Sep. 30, 2020
Sep. 30, 2019
Income Statement [Abstract]        
Revenues $ 6,435,637 $ 5,244,905 $ 18,351,614 $ 14,689,013
Cost of revenues 3,867,751 3,097,919 11,111,159 8,974,190
Marketing 527,597 553,797 1,465,797 1,773,525
Technology and development 453,802 379,776 1,342,664 1,135,773
General and administrative 271,624 233,174 800,947 659,783
Operating income 1,314,863 980,239 3,631,047 2,145,742
Other income (expense):        
Interest expense (197,079) (160,660) (570,313) (448,222)
Interest and other income (expense) (256,324) 192,744 (367,802) 215,378
Income before income taxes 861,460 1,012,323 2,692,932 1,912,898
Provision for income taxes 71,484 347,079 473,693 632,952
Net income $ 789,976 $ 665,244 $ 2,219,239 $ 1,279,946
Earnings per share:        
Basic (in dollars per share) $ 1.79 $ 1.52 $ 5.04 $ 2.93
Diluted (in dollars per share) $ 1.74 $ 1.47 $ 4.89 $ 2.83
Weighted-average common shares outstanding:        
Basic (in shares) 441,526 438,090 440,486 437,547
Diluted (in shares) 455,088 451,552 453,846 451,896
v3.20.2
Consolidated Statements of Comprehensive Income - USD ($)
$ in Thousands
 3 Months Ended 9 Months Ended
Sep. 30, 2020
Sep. 30, 2019
Sep. 30, 2020
Sep. 30, 2019
Statement of Comprehensive Income [Abstract]        
Net income $ 789,976 $ 665,244 $ 2,219,239 $ 1,279,946
Other comprehensive income (loss):        
Foreign currency translation adjustments 32,925 (20,894) 22,374 (21,664)
Comprehensive income $ 822,901 $ 644,350 $ 2,241,613 $ 1,258,282
v3.20.2
Consolidated Statements of Cash Flows - USD ($)
$ in Thousands
 3 Months Ended 9 Months Ended
Sep. 30, 2020
Sep. 30, 2019
Sep. 30, 2020
Sep. 30, 2019
Cash flows from operating activities:        
Net income $ 789,976 $ 665,244 $ 2,219,239 $ 1,279,946
Adjustments to reconcile net income to net cash provided by (used in) operating activities:        
Additions to content assets (2,653,886) (3,648,292) (8,458,943) (9,971,141)
Change in content liabilities (379,458) (95,548) (228,945) (122,660)
Amortization of content assets 2,733,743 2,279,977 7,824,287 6,636,578
Depreciation and amortization of property, equipment and intangibles 28,589 26,704 83,767 75,761
Stock-based compensation expense 106,357 100,262 307,586 305,310
Other non-cash items 83,851 57,934 219,600 164,337
Foreign currency remeasurement loss (gain) on debt 249,194 (171,360) 275,295 (167,676)
Deferred taxes (40,277) 52,105 229,650 94,251
Changes in operating assets and liabilities:        
Other current assets (22,974) 145 (147,261) (56,162)
Accounts payable 111,677 (7,643) (149,503) (134,784)
Accrued expenses and other liabilities 266,027 260,872 374,768 391,814
Deferred revenue 10,941 22,729 115,457 154,607
Other non-current assets and liabilities (19,999) (44,923) (100,248) (75,528)
Net cash provided by (used in) operating activities 1,263,761 (501,794) 2,564,749 (1,425,347)
Cash flows from investing activities:        
Purchases of property and equipment (109,811) (45,333) (349,567) (145,298)
Change in other assets (8,840) (4,021) (9,388) (34,195)
Net cash used in investing activities (118,651) (49,354) (358,955) (179,493)
Cash flows from financing activities:        
Proceeds from issuance of debt 0 0 1,009,464 2,243,196
Debt issuance costs 0 0 (7,559) (18,192)
Proceeds from issuance of common stock 68,665 11,989 201,419 56,857
Net cash provided by financing activities 68,665 11,989 1,203,324 2,281,861
Effect of exchange rate changes on cash, cash equivalents and restricted cash 28,459 (29,325) (30,624) (29,341)
Net increase (decrease) in cash, cash equivalents and restricted cash 1,242,234 (568,484) 3,378,494 647,680
Cash, cash equivalents and restricted cash at beginning of period 7,180,046 5,028,205 5,043,786 3,812,041
Cash, cash equivalents and restricted cash at end of period $ 8,422,280 $ 4,459,721 $ 8,422,280 $ 4,459,721
v3.20.2
Consolidated Balance Sheets - USD ($)
$ in Thousands
Sep. 30, 2020
Dec. 31, 2019
Current assets:    
Cash and cash equivalents $ 8,392,391 $ 5,018,437
Other current assets 1,434,089 1,160,067
Total current assets 9,826,480 6,178,504
Content assets, net 25,067,633 24,504,567
Property and equipment, net 828,118 565,221
Other non-current assets 2,900,312 2,727,420
Total assets 38,622,543 33,975,712
Current liabilities:    
Current content liabilities 4,599,654 4,413,561
Accounts payable 541,298 674,347
Accrued expenses and other liabilities 1,259,124 843,043
Deferred revenue 1,040,202 924,745
Short-term debt 499,517 0
Total current liabilities 7,939,795 6,855,696
Non-current content liabilities 2,926,574 3,334,323
Long-term debt 15,547,616 14,759,260
Other non-current liabilities 1,875,235 1,444,276
Total liabilities 28,289,220 26,393,555
Commitments and contingencies
Stockholders’ equity:    
Common stock, $0.001 par value; 4,990,000,000 shares authorized at September 30, 2020 and December 31, 2019; 441,795,008 and 438,806,649 issued and outstanding at September 30, 2020 and December 31, 2019, respectively 3,303,482 2,793,929
Accumulated other comprehensive loss (1,147) (23,521)
Retained earnings 7,030,988 4,811,749
Total stockholders’ equity 10,333,323 7,582,157
Total liabilities and stockholders’ equity $ 38,622,543 $ 33,975,712
v3.20.2
Consolidated Balance Sheets (Parenthetical) - $ / shares
Sep. 30, 2020
Dec. 31, 2019
Statement of Financial Position [Abstract]    
Common stock, par value (dollars per share) $ 0.001 $ 0.001
Common stock, shares authorized (shares) 4,990,000,000 4,990,000,000
Common stock, shares issued (shares) 441,795,008 438,806,649
Common stock, shares outstanding (shares) 441,795,008 438,806,649
v3.20.2
Consolidated Statements of Stockholders' Equity - USD ($)
$ in Thousands
Total
Common Stock and Additional Paid-in Capital
Accumulated Other Comprehensive Loss
Retained Earnings
Cumulative Effect, Period of Adoption, Adjustment
Retained Earnings
Increase (Decrease) in Stockholders' Equity [Roll Forward]          
Adoption of ASU 2016-02, Leases (Topic 842) $ 5,238,765 $ 2,315,988 $ (19,582) $ 2,942,359 $ 2,474
Beginning Balance at Dec. 31, 2018 5,238,765 2,315,988 (19,582) 2,942,359 2,474
Increase (Decrease) in Stockholders' Equity [Roll Forward]          
Issuance of common stock upon exercise of options   56,674      
Stock-based compensation expense   305,310      
Other comprehensive income (loss)     (21,664)    
Net income 1,279,946     1,279,946  
Adoption of ASU 2016-02, Leases (Topic 842) 6,861,505 2,677,972 (41,246) 4,224,779 2,474
Ending Balance at Sep. 30, 2019 $ 6,861,505 2,677,972 (41,246) 4,224,779  
Increase (Decrease) in Stockholders' Equity [Roll Forward]          
Accounting Standards Update [Extensible List] us-gaap:AccountingStandardsUpdate201602Member        
Beginning Balance at Dec. 31, 2018 $ 5,238,765 2,315,988 (19,582) 2,942,359 2,474
Increase (Decrease) in Stockholders' Equity [Roll Forward]          
Net income       2,219,239  
Adoption of ASU 2016-02, Leases (Topic 842) 5,238,765 2,315,988 (19,582) 2,942,359 $ 2,474
Ending Balance at Dec. 31, 2019 7,582,157 2,793,929 (23,521) 4,811,749  
Increase (Decrease) in Stockholders' Equity [Roll Forward]          
Adoption of ASU 2016-02, Leases (Topic 842) 6,105,548 2,566,365 (20,352) 3,559,535  
Beginning Balance at Jun. 30, 2019 6,105,548 2,566,365 (20,352) 3,559,535  
Increase (Decrease) in Stockholders' Equity [Roll Forward]          
Issuance of common stock upon exercise of options   11,345      
Stock-based compensation expense   100,262      
Other comprehensive income (loss)     (20,894)    
Net income 665,244     665,244  
Adoption of ASU 2016-02, Leases (Topic 842) 6,861,505 2,677,972 (41,246) 4,224,779  
Ending Balance at Sep. 30, 2019 6,861,505 2,677,972 (41,246) 4,224,779  
Increase (Decrease) in Stockholders' Equity [Roll Forward]          
Adoption of ASU 2016-02, Leases (Topic 842) 6,861,505 2,677,972 (41,246) 4,224,779  
Adoption of ASU 2016-02, Leases (Topic 842) 7,582,157 2,793,929 (23,521) 4,811,749  
Beginning Balance at Dec. 31, 2019 7,582,157 2,793,929 (23,521) 4,811,749  
Increase (Decrease) in Stockholders' Equity [Roll Forward]          
Issuance of common stock upon exercise of options   201,967      
Stock-based compensation expense   307,586      
Other comprehensive income (loss)     22,374    
Net income 2,219,239        
Adoption of ASU 2016-02, Leases (Topic 842) 10,333,323 3,303,482 (1,147) 7,030,988  
Ending Balance at Sep. 30, 2020 10,333,323 3,303,482 (1,147) 7,030,988  
Increase (Decrease) in Stockholders' Equity [Roll Forward]          
Adoption of ASU 2016-02, Leases (Topic 842) 9,334,753 3,127,813 (34,072) 6,241,012  
Beginning Balance at Jun. 30, 2020 9,334,753 3,127,813 (34,072) 6,241,012  
Increase (Decrease) in Stockholders' Equity [Roll Forward]          
Issuance of common stock upon exercise of options   69,312      
Stock-based compensation expense   106,357      
Other comprehensive income (loss)     32,925    
Net income 789,976     789,976  
Adoption of ASU 2016-02, Leases (Topic 842) 10,333,323 3,303,482 (1,147) 7,030,988  
Ending Balance at Sep. 30, 2020 10,333,323 3,303,482 (1,147) 7,030,988  
Increase (Decrease) in Stockholders' Equity [Roll Forward]          
Adoption of ASU 2016-02, Leases (Topic 842) $ 10,333,323 $ 3,303,482 $ (1,147) $ 7,030,988  
v3.20.2
Basis of Presentation and Summary of Significant Accounting Policies
 9 Months Ended
Sep. 30, 2020
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Basis of Presentation and Summary of Significant Accounting Policies Basis of Presentation and Summary of Significant Accounting Policies
The accompanying interim consolidated financial statements of Netflix, Inc. and its wholly owned subsidiaries (the “Company”) have been prepared in conformity with accounting principles generally accepted in the United States (“U.S.”) and are consistent in all material respects with those applied in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019 filed with the Securities and Exchange Commission (the “SEC”) on January 29, 2020. The preparation of consolidated financial statements in conformity with U.S. generally accepted accounting principles (“GAAP”) requires management to make estimates and judgments that affect the amounts reported in the consolidated financial statements and accompanying notes. Significant items subject to such estimates and assumptions include the content asset amortization policy and the recognition and measurement of income tax assets and liabilities. The Company bases its estimates on historical experience and on various other assumptions that the Company believes to be reasonable under the circumstances. On a regular basis, the Company evaluates the assumptions, judgments and estimates. Actual results may differ from these estimates.
The interim financial information is unaudited, but reflects all normal recurring adjustments that are, in the opinion of management, necessary to fairly present the information set forth herein. The interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements and related notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019. Interim results are not necessarily indicative of the results for a full year.
There have been no material changes in the Company’s significant accounting policies as compared to the significant accounting policies described in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019.

Recently adopted accounting pronouncements
In June 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2016-13, Financial Instruments - Credit Losses (Topic 326), in order to improve financial reporting of expected credit losses on financial instruments and other commitments to extend credit. ASU 2016-13 requires that an entity measure and recognize expected credit losses for financial assets held at amortized cost and replaces the incurred loss impairment methodology in prior GAAP with a methodology that requires consideration of a broader range of information to estimate credit losses. The Company adopted ASU 2016-13 in the first quarter of 2020 and the impact of the adoption was not material to the Company's consolidated financial statements as credit losses are not expected to be significant based on historical collection trends, the financial condition of payment partners, and external market factors. The Company will continue to actively monitor the impact of the coronavirus (COVID-19) pandemic on expected credit losses.
v3.20.2
Revenue Recognition
 9 Months Ended
Sep. 30, 2020
Revenue from Contract with Customer [Abstract]  
Revenue Recognition Revenue Recognition
The Company's primary source of revenues is from monthly membership fees. Members are billed in advance of the start of their monthly membership and revenues are recognized ratably over each monthly membership period. Revenues are presented net of the taxes that are collected from members and remitted to governmental authorities. The Company is the principal in all its relationships where partners, including consumer electronics (“CE”) manufacturers, multichannel video programming distributors (“MVPDs”), mobile operators and internet service providers (“ISPs”), provide access to the service as the Company retains control over service delivery to its members. Typically, payments made to the partners, such as for marketing, are expensed, but in the case where the price that the member pays is established by the partners and there is no standalone price for the Netflix service (for instance, in a bundle), these payments are recognized as a reduction of revenues.
The following tables summarize streaming revenue, paid net membership additions, and paid memberships at end of period by region for the three and nine months ended September 30, 2020 and September 30, 2019, respectively:

United States and Canada (UCAN)
 
 
As of/ Three Months Ended
 
As of/ Nine Months Ended
 
 
September 30, 2020
 
September 30, 2019
 
September 30, 2020
 
September 30, 2019
 
 
(in thousands)
Revenues
 
$
2,933,445

 
$
2,621,250

 
$
8,475,891

 
$
7,379,300

Paid net membership additions
 
177

 
613

 
5,419

 
2,357

Paid memberships at end of period (1)
 
73,081

 
67,114

 
73,081

 
67,114


Europe, Middle East, and Africa (EMEA)
 
 
As of/ Three Months Ended
 
As of/ Nine Months Ended
 
 
September 30, 2020
 
September 30, 2019
 
September 30, 2020
 
September 30, 2019
 
 
(in thousands)
Revenues
 
$
2,019,083

 
$
1,428,040

 
$
5,635,094

 
$
3,980,506

Paid net membership additions
 
759

 
3,126

 
10,464

 
9,537

Paid memberships at end of period (1)
 
62,242

 
47,355

 
62,242

 
47,355


Latin America (LATAM)
 
 
As of/ Three Months Ended
 
As of/ Nine Months Ended
 
 
September 30, 2020
 
September 30, 2019
 
September 30, 2020
 
September 30, 2019
 
 
(in thousands)
Revenues
 
$
789,384

 
$
741,434

 
$
2,368,205

 
$
2,049,042

Paid net membership additions
 
256

 
1,490

 
4,907

 
3,303

Paid memberships at end of period (1)
 
36,324

 
29,380

 
36,324

 
29,380


Asia-Pacific (APAC)
 
 
As of/ Three Months Ended
 
As of/ Nine Months Ended
 
 
September 30, 2020
 
September 30, 2019
 
September 30, 2020
 
September 30, 2019
 
 
(in thousands)
Revenues
 
$
634,891

 
$
382,304

 
$
1,687,691

 
$
1,051,400

Paid net membership additions
 
1,012

 
1,543

 
7,271

 
3,878

Paid memberships at end of period (1)
 
23,504

 
14,485

 
23,504

 
14,485

(1) A paid membership (also referred to as a paid subscription) is defined as a membership that has the right to receive Netflix service following sign-up and a method of payment being provided, and that is not part of a free trial or other promotional offering by the Company to certain new and rejoining members. A membership is canceled and ceases to be reflected in the above metrics as of the effective cancellation date. Voluntary cancellations generally become effective at the end of the prepaid membership period. Involuntary cancellations, as a result of a failed method of payment, becomes effective immediately. Memberships are assigned to territories based on the geographic location used at time of sign-up as determined by the Company’s internal systems, which utilize industry standard geo-location technology.

Total U.S. revenues, inclusive of DVD revenues not reported in the tables above, were $2.8 billion and $8.0 billion, respectively, for the three and nine months ended September 30, 2020, and $2.5 billion and $7.0 billion, respectively, for the three and nine months ended September 30, 2019. DVD revenues were $59 million and $185 million, respectively, for the three and nine months ended September 30, 2020, and $72 million and $229 million, respectively, for the three and nine months ended September 30, 2019.
Deferred revenue consists of membership fees billed that have not been recognized, as well as gift cards and other prepaid memberships that have not been fully redeemed. As of September 30, 2020, total deferred revenue was $1,040 million, the vast majority of which was related to membership fees billed that are expected to be recognized as revenue within the next month. The remaining deferred revenue balance, which is related to gift cards and other prepaid memberships, will be recognized as revenue over the period of service after redemption, which is expected to occur over the next 12 months. The $115 million increase in deferred revenue as compared to the balance of $925 million for the year ended December 31, 2019 is a result of the increase in membership fees billed due to increased memberships.
v3.20.2
Earnings Per Share
 9 Months Ended
Sep. 30, 2020
Earnings Per Share [Abstract]  
Earnings Per Share Earnings Per Share

Basic earnings per share is computed using the weighted-average number of outstanding shares of common stock during the period. Diluted earnings per share is computed using the weighted-average number of outstanding shares of common stock and, when dilutive, potential common shares outstanding during the period. Potential common shares consist of incremental shares issuable upon the assumed exercise of stock options. The computation of earnings per share is as follows:
 
Three Months Ended
 
Nine Months Ended
 
September 30,
2020
 
September 30,
2019
 
September 30,
2020
 
September 30,
2019
 
(in thousands, except per share data)
Basic earnings per share:
 
 
 
 
 
 
 
Net income
$
789,976

 
$
665,244

 
$
2,219,239

 
$
1,279,946

Shares used in computation:
 
 
 
 
 
 
 
Weighted-average common shares outstanding
441,526

 
438,090

 
440,486

 
437,547

Basic earnings per share
$
1.79

 
$
1.52

 
$
5.04

 
$
2.93

 
 
 
 
 
 
 
 
Diluted earnings per share:
 
 
 
 
 
 
 
Net income
$
789,976

 
$
665,244

 
$
2,219,239

 
$
1,279,946

Shares used in computation:
 
 
 
 
 
 
 
Weighted-average common shares outstanding
441,526

 
438,090

 
440,486

 
437,547

Employee stock options
13,562

 
13,462

 
13,360

 
14,349

Weighted-average number of shares
455,088

 
451,552

 
453,846

 
451,896

Diluted earnings per share
$
1.74

 
$
1.47

 
$
4.89

 
$
2.83



Employee stock options with exercise prices greater than the average market price of the common stock were excluded from the diluted calculation as their inclusion would have been anti-dilutive. The following table summarizes the potential common shares excluded from the diluted calculation:
 
Three Months Ended
 
Nine Months Ended
 
September 30,
2020
 
September 30,
2019
 
September 30,
2020
 
September 30,
2019
 
(in thousands)
Employee stock options
124

 
2,402

 
560

 
1,268
v3.20.2
Cash, Cash Equivalents and Restricted Cash
 9 Months Ended
Sep. 30, 2020
Short-Term Investments And Fair Value Measurement [Abstract]  
Cash, Cash Equivalents and Restricted Cash Cash, Cash Equivalents and Restricted Cash

The following tables summarize the Company's cash, cash equivalents, and restricted cash as of September 30, 2020 and December 31, 2019:

 
As of September 30, 2020
 
Cash and cash equivalents
 
Other Current Assets
 
Non-current Assets
 
Total
 
(in thousands)
Cash
$
2,968,826

 
$
2,761

 
$
26,875

 
$
2,998,462

Level 1 securities:
 
 
 
 
 
 
 
Money market funds
5,123,565

 
—

 
253

 
5,123,818

Level 2 securities:
 
 
 
 
 
 
 
Foreign Time Deposits
300,000

 
—

 
—

 
300,000

 
 
 
 
 
 
 
 
 
$
8,392,391

 
$
2,761

 
$
27,128

 
$
8,422,280


 
As of December 31, 2019
 
Cash and cash equivalents
 
Other Current Assets
 
Non-current Assets
 
Total
 
(in thousands)
Cash
$
3,103,525

 
$
1,863

 
$
22,161

 
$
3,127,549

Level 1 securities:
 
 
 
 
 
 
 
Money market funds
1,614,912

 
—

 
1,325

 
1,616,237

Level 2 securities:
 
 
 
 
 
 
 
Foreign Time Deposits
300,000

 
—

 
—

 
300,000

 
 
 
 
 
 
 
 
 
$
5,018,437

 
$
1,863

 
$
23,486

 
$
5,043,786


Other current assets include restricted cash for self insurance. Non-current assets include restricted cash related to workers compensation deposits and letter of credit agreements. The fair value of cash equivalents included in the Level 2 category is based on observable inputs, such as quoted prices for similar assets at the measurement date; quoted prices in markets that are not active; or other inputs that are observable, either directly or indirectly.
See Note 6 to the consolidated financial statements for further information regarding the fair value of the Company’s senior notes.
There were no material gross realized gains or losses in the three and nine months ended September 30, 2020 and 2019, respectively.
v3.20.2
Balance Sheet Components
 9 Months Ended
Sep. 30, 2020
Balance Sheet Components Disclosure [Abstract]  
Balance Sheet Components Balance Sheet Components

Content Assets, Net
Content assets consisted of the following:
 
As of
 
September 30,
2020
 
December 31,
2019
 
(in thousands)
Licensed content, net
$
14,297,143

 
$
14,703,352

 
 
 
 
Produced content, net


 


Released, less amortization
5,186,247

 
4,382,685

In production
4,696,990

 
4,750,664

In development and pre-production
887,253

 
667,866

 
10,770,490

 
9,801,215

 
 
 
 
Total
$
25,067,633

 
$
24,504,567

 
 
 
 


As of September 30, 2020, approximately $5,743 million, $3,675 million, and $2,264 million of the $14,297 million unamortized cost of the licensed content is expected to be amortized in each of the next three years.  As of September 30, 2020, approximately $1,894 million, $1,465 million, and $1,025 million of the $5,186 million unamortized cost of the produced content that has been released is expected to be amortized in each of the next three years.
As of September 30, 2020, the amount of accrued participations and residuals was not material.
The following table represents the amortization of content assets:
 
Three Months Ended
 
September 30,
2020
 
September 30,
2019
 
(in thousands)
Licensed content
$
1,885,259

 
$
1,810,757

Produced content
848,484

 
469,220

Total
$
2,733,743

 
$
2,279,977



 
Nine Months Ended
 
September 30,
2020
 
September 30,
2019
 
(in thousands)
Licensed content
$
5,628,499

 
$
5,382,225

Produced content
2,195,788

 
1,254,353

Total
$
7,824,287

 
$
6,636,578


Property and Equipment, Net
Property and equipment and accumulated depreciation consisted of the following:
 
 
As of
 
 
 
 
September 30,
2020
 
December 31,
2019
 
Estimated Useful Lives
 
 
(in thousands)
 
 
Land
 
$
13,560

 
$
6,125

 
 
Buildings
 
41,894

 
33,141

 
30 years
Leasehold improvements
 
387,172

 
354,999

 
Over life of lease
Furniture and fixtures
 
95,240

 
87,465

 
3-15 years
Information technology
 
264,358

 
243,565

 
3 years
Corporate aircraft
 
110,621

 
108,995

 
8 years
Machinery and equipment
 
44,111

 
46,415

 
3-5 years
Capital work-in-progress
 
345,347

 
100,521

 
 
Property and equipment, gross
 
1,302,303

 
981,226

 
 
Less: Accumulated depreciation
 
(474,185
)
 
(416,005
)
 
 
Property and equipment, net
 
$
828,118

 
$
565,221

 
 



Leases
The Company has entered into operating leases primarily for real estate. These operating leases are included in "Other non-current assets" on the Company's Consolidated Balance Sheets, and represent the Company’s right to use the underlying asset for the lease term. The Company’s obligations to make lease payments are included in "Accrued expenses and other liabilities" and "Other non-current liabilities" on the Company's Consolidated Balance Sheets.  As of September 30, 2020, total right-of-use assets were approximately $1,939 million and total operating lease liabilities were approximately $2,090 million, of which $237 million and $1,853 million were classified in "Accrued expenses and other liabilities" and "Other non-current liabilities", respectively. As of December 31, 2019, total right-of-use assets were approximately $1,532 million and total operating lease liabilities were approximately $1,613 million, of which $190 million and $1,423 million were classified in "Accrued expenses and other liabilities" and "Other non-current liabilities", respectively. The Company has entered into various short-term operating leases, primarily for marketing billboards, with an initial term of twelve months or less. These leases are not recorded on the Company's Consolidated Balance Sheets. All operating lease expense is recognized on a straight-line basis over the lease term. Because the rate implicit in each lease is not readily determinable, the Company uses its incremental borrowing rate to determine the present value of the lease payments.
Information related to the Company's right-of-use assets and related lease liabilities were as follows:
 
Three Months Ended
 
September 30, 2020
 
September 30, 2019
 
(in thousands)
Cash paid for operating lease liabilities
$
70,917

 
$
51,767

Right-of-use assets obtained in exchange for new operating lease obligations
175,901

 
77,549



 
Nine Months Ended
 
September 30, 2020
 
September 30, 2019
 
(in thousands)
Cash paid for operating lease liabilities
$
187,880

 
$
130,740

Right-of-use assets obtained in exchange for new operating lease obligations (1)
592,331

 
1,150,443

(1) In the nine months ended September 30, 2019, the balance includes $743 million for operating leases existing on January 1, 2019. The $592 million in additions in the nine months ended September 30, 2020 primarily relate to the additions of corporate office space.

Other Current Assets
Other current assets consisted of the following:
 
 
As of
 
 
September 30,
2020
 
December 31,
2019
 
 
(in thousands)
Trade receivables
 
$
604,789

 
$
454,399

Prepaid expenses
 
209,218

 
180,999

Other
 
620,082

 
524,669

Total other current assets
 
$
1,434,089

 
$
1,160,067
v3.20.2
Debt
 9 Months Ended
Sep. 30, 2020
Debt Disclosure [Abstract]  
Debt Debt
As of September 30, 2020, the Company had aggregate outstanding notes of $16,047 million, net of $111 million of issuance costs, with varying maturities (the "Notes"). Of the outstanding balance, $500 million, net of issuance costs, is classified as short-term debt on the Consolidated Balance Sheets. As of December 31, 2019, the Company had aggregate outstanding long-term notes of $14,759 million, net of $114 million of issuance costs. Each of the Notes were issued at par and are senior unsecured obligations of the Company. Interest is payable semi-annually at fixed rates. A portion of the outstanding notes is denominated in foreign currency (comprised of €5,170 million) and is remeasured into U.S. dollars at each balance sheet date (with remeasurement loss totaling $249 million and $275 million, respectively, for the three and nine months ended September 30, 2020).
The following table provides a summary of the Company's outstanding debt and the fair values based on quoted market prices in less active markets as of September 30, 2020 and December 31, 2019:
 
 
Principal Amount at Par
 
 
 
 
Level 2 Fair Value as of
 
 
September 30, 2020
 
December 31, 2019
Issuance Date
 
Maturity
 
September 30, 2020
 
December 31, 2019
 
 
(in millions)
 
 
 
 
(in millions)
5.375% Senior Notes
 
$
500

 
$
500

February 2013
 
February 2021
 
$
507

 
$
518

5.500% Senior Notes
 
700

 
700

February 2015
 
February 2022
 
736

 
744

5.750% Senior Notes
 
400

 
400

February 2014
 
March 2024
 
445

 
444

5.875% Senior Notes
 
800

 
800

February 2015
 
February 2025
 
906

 
896

3.000% Senior Notes (1)
 
551

 
—

April 2020
 
June 2025
 
575

 
—

3.625% Senior Notes
 
500

 
—

April 2020
 
June 2025
 
523

 
—

4.375% Senior Notes
 
1,000

 
1,000

October 2016
 
November 2026
 
1,092

 
1,026

3.625% Senior Notes (1)
 
1,523

 
1,459

May 2017
 
May 2027
 
1,651

 
1,565

4.875% Senior Notes
 
1,600

 
1,600

October 2017
 
April 2028
 
1,800

 
1,670

5.875% Senior Notes
 
1,900

 
1,900

April 2018
 
November 2028
 
2,269

 
2,111

4.625% Senior Notes (1)
 
1,289

 
1,234

October 2018
 
May 2029
 
1,495

 
1,378

6.375% Senior Notes
 
800

 
800

October 2018
 
May 2029
 
989

 
916

3.875% Senior Notes (1)
 
1,406

 
1,346

April 2019
 
November 2029
 
1,556

 
1,429

5.375% Senior Notes
 
900

 
900

April 2019
 
November 2029
 
1,062

 
960

3.625% Senior Notes (1)
 
1,289

 
1,234

October 2019
 
June 2030
 
1,402

 
1,273

4.875% Senior Notes
 
1,000

 
1,000

October 2019
 
June 2030
 
1,142

 
1,019

 
 
$
16,158

 
$
14,873

 
 
 
 
$
18,150

 
$
15,949


(1) The following Senior Notes have a principal amount denominated in euro: 3.000% Senior Notes for €470 million, 3.625% Senior Notes for €1,300 million, 4.625% Senior Notes for €1,100 million, 3.875% Senior Notes for €1,200 million, and 3.625% Senior Notes for €1,100 million.
The expected timing of principal and interest payments for these Notes are as follows:
 
As of 
 
September 30,
2020
 
December 31, 2019
 
(in thousands)
Less than one year
$
1,258,639

 
$
736,969

Due after one year and through three years
2,136,439

 
2,581,471

Due after three years and through five years
3,612,818

 
1,705,201

Due after five years
14,875,099

 
15,699,800

Total debt obligations
$
21,882,995

 
$
20,723,441



Each of the Notes are repayable in whole or in part upon the occurrence of a change of control, at the option of the holders, at a purchase price in cash equal to 101% of the principal plus accrued interest. The Company may redeem the Notes prior to maturity in whole or in part at an amount equal to the principal amount thereof plus accrued and unpaid interest and an applicable premium. The Notes include, among other terms and conditions, limitations on the Company's ability to create, incur or allow certain liens; enter into sale and lease-back transactions; create, assume, incur or guarantee additional indebtedness of certain of the Company's subsidiaries; and consolidate or merge with, or convey, transfer or lease all or substantially all of the Company's and its subsidiaries assets, to another person. As of September 30, 2020 and December 31, 2019, the Company was in compliance with all related covenants.
Revolving Credit Facility
As of September 30, 2020, the Company has a $750 million unsecured revolving credit facility ("Revolving Credit Agreement") which matures on March 29, 2024. Revolving loans may be borrowed, repaid and reborrowed until March 29, 2024, at which time all amounts borrowed must be repaid. The Company may use the proceeds of future borrowings under the Revolving Credit Agreement for working capital and general corporate purposes. As of September 30, 2020, no amounts have been borrowed under the Revolving Credit Agreement.
The borrowings under the Revolving Credit Agreement bear interest, at the Company’s option, of either (i) a floating rate equal to a base rate (the “Alternate Base Rate”) or (ii) a rate equal to an adjusted London interbank offered rate (the “Adjusted LIBO Rate”), plus a margin of 0.75%. The Alternate Base Rate is defined as the greatest of (A) the rate of interest published by the Wall Street Journal, from time to time, as the prime rate, (B) the federal funds rate, plus 0.500% and (C) the Adjusted LIBO Rate for a one-month interest period, plus 1.00%. The Adjusted LIBO Rate is defined as the London interbank offered rate for deposits in U.S. dollars, for the relevant interest period, adjusted for statutory reserve requirements, but in no event shall the Adjusted LIBO Rate be less than 0.00% per annum. Regulatory authorities that oversee financial markets have announced that after the end of 2021, they would no longer compel banks currently reporting information used to set the LIBO Rate to continue to make rate submissions. As a result, it is possible that beginning in 2022, the LIBO Rate will no longer be available as a reference rate. Under the terms of the Company's Revolving Credit Agreement, in the event of the discontinuance of the LIBO Rate, a mutually agreed-upon alternate benchmark rate will be established to replace the LIBO Rate. The Company and Lenders shall in good faith establish an alternate benchmark rate which places the Lenders and the Company in the same economic position that existed immediately prior to the discontinuation of the LIBO Rate. The Company does not anticipate that the discontinuance of the LIBO Rate will materially impact its liquidity or financial position.
The Company is also obligated to pay a commitment fee on the undrawn amounts of the Revolving Credit Agreement at an annual rate of 0.10%. The Revolving Credit Agreement requires the Company to comply with certain covenants, including covenants that limit or restrict the ability of the Company’s subsidiaries to incur debt and limit or restrict the ability of the Company and its subsidiaries to grant liens and enter into sale and leaseback transactions; and, in the case of the Company or a guarantor, merge, consolidate, liquidate, dissolve or sell, transfer, lease or otherwise dispose of all or substantially all of the assets of the Company and its subsidiaries, taken as a whole. As of September 30, 2020 and December 31, 2019, the Company was in compliance with all related covenants.
v3.20.2
Commitments and Contingencies
 9 Months Ended
Sep. 30, 2020
Commitments and Contingencies Disclosure [Abstract]  
Commitments and Contingencies Commitments and Contingencies

Content
As of September 30, 2020, the Company had $19.1 billion of obligations comprised of $4.6 billion included in "Current content liabilities" and $2.9 billion of "Non-current content liabilities" on the Consolidated Balance Sheets and $11.6 billion of obligations that are not reflected on the Consolidated Balance Sheets as they did not yet meet the criteria for asset recognition.
As of December 31, 2019, the Company had $19.5 billion of obligations comprised of $4.4 billion included in "Current content liabilities" and $3.3 billion of "Non-current content liabilities" on the Consolidated Balance Sheets and $11.8 billion of obligations that are not reflected on the Consolidated Balance Sheets as they did not yet meet the criteria for asset recognition.
The expected timing of payments for these content obligations is as follows:
 
As of 
 
September 30,
2020
 
December 31,
2019
 
(in thousands)
Less than one year
$
8,668,296

 
$
8,477,367

Due after one year and through three years
8,004,624

 
8,352,731

Due after three years and through five years
1,956,565

 
2,041,340

Due after five years
442,769

 
618,644

Total content obligations
$
19,072,254

 
$
19,490,082


Content obligations include amounts related to the acquisition, licensing and production of content. Obligations that are in non-U.S. dollar currencies are translated to the U.S. dollar at period end rates. An obligation for the production of content includes non-cancelable commitments under creative talent and employment agreements as well as other production related commitments. An obligation for the acquisition and licensing of content is incurred at the time the Company enters into an agreement to obtain future titles. Once a title becomes available, a content liability is recorded on the Consolidated Balance Sheets. Certain agreements include the obligation to license rights for unknown future titles, the ultimate quantity and/or fees for which are not yet determinable as of the reporting date. Traditional film output deals, or certain TV series license agreements where the number of seasons to be aired is unknown, are examples of such license agreements. The Company does not include any estimated obligation for these future titles beyond the known minimum amount. However, the unknown obligations are expected to be significant.
Legal Proceedings
From time to time, in the normal course of its operations, the Company is subject to litigation matters and claims, including claims relating to employee relations, business practices and patent infringement. Litigation can be expensive and disruptive to normal business operations. Moreover, the results of complex legal proceedings are difficult to predict and the Company's view of these matters may change in the future as the litigation and events related thereto unfold. The Company expenses legal fees as incurred. The Company records a provision for contingent losses when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated. An unfavorable outcome to any legal matter, if material, could have an adverse effect on the Company's operations or its financial position, liquidity or results of operations.
The Company is involved in litigation matters not listed herein but does not consider the matters to be material either individually or in the aggregate at this time. The Company's view of the matters not listed may change in the future as the litigation and events related thereto unfold.
Indemnification
In the ordinary course of business, the Company has entered into contractual arrangements under which it has agreed to provide indemnification of varying scope and terms to business partners and other parties with respect to certain matters, including, but not limited to, losses arising out of the Company’s breach of such agreements and out of intellectual property infringement claims made by third parties. In these circumstances, payment may be conditional on the other party making a claim pursuant to the procedures specified in the particular contract.
The Company's obligations under these agreements may be limited in terms of time or amount, and in some instances, the Company may have recourse against third parties for certain payments. In addition, the Company has entered into indemnification agreements with its directors and certain of its officers that will require it, among other things, to indemnify them against certain liabilities that may arise by reason of their status or service as directors or officers. The terms of such obligations vary.
It is not possible to make a reasonable estimate of the maximum potential amount of future payments under these or similar agreements due to the conditional nature of the Company’s obligations and the unique facts and circumstances involved in each particular agreement. No amount has been accrued in the accompanying consolidated financial statements with respect to these indemnification obligations.
v3.20.2
Stockholders' Equity
 9 Months Ended
Sep. 30, 2020
Stockholders' Equity and Stock-based Compensation Disclosure [Abstract]  
Stockholders' Equity Stockholders’ Equity
Stock Option Plan
On June 4, 2020, the Company's stockholders approved the 2020 Stock Plan, which was adopted by the Company’s Board of Directors on March 4, 2020 subject to stockholder approval. The 2020 Stock Plan is the successor to the 2011 Stock Plan. The 2020 Stock Plan provides for the grant of incentive stock options to employees and for the grant of non-statutory stock options, stock appreciation rights, restricted stock and restricted stock units to employees, directors and consultants. The 2020 Stock plan authorized 17,500,000 new shares to be available for award grants. As of the date the 2020 Stock Plan was adopted by the Company's Board of Directors, 5,530,106 shares were available to be granted under the 2011 Stock Plan. These shares are available for award grants under the 2020 Stock Plan.
A summary of the activities related to the Company’s stock option plans is as follows:
 
 
 
Options Outstanding
 
Shares
Available
for Grant
 
Number of
Shares
 
Weighted-
Average
Exercise Price
(per share)
Balances as of December 31, 2019
6,111,561

 
20,859,326

 
$
124.28

New Shares Authorized
17,500,000

 
—

 
—

Granted
(1,498,232
)
 
1,498,232

 
412.45

Exercised
—

 
(2,988,359
)
 
67.58

Expired
—

 
(188
)
 
13.38

Balances as of September 30, 2020
22,113,329

 
19,369,011

 
$
155.32

Vested and exercisable as of September 30, 2020
 
 
19,369,011

 
$
155.32



The aggregate intrinsic value of the Company's outstanding stock options as of September 30, 2020 was $6,684 million and represents the total pretax intrinsic value (the difference between the Company’s closing stock price on the last trading day of the third quarter of 2020 and the exercise price, multiplied by the number of in-the-money options) that would have been received by the option holders had all option holders exercised their options on the last trading day of the third quarter of 2020. This amount changes based on the fair market value of the Company’s common stock. The weighted-average remaining contractual term of the Company's outstanding stock options as of September 30, 2020 included in the table above was 5.47 years.
A summary of the amounts related to option exercises, is as follows:
 
Three Months Ended
 
Nine Months Ended
 
September 30,
2020
 
September 30,
2019
 
September 30,
2020
 
September 30,
2019
 
(in thousands)
Total intrinsic value of options exercised
$
321,859

 
$
119,439

 
$
1,067,241

 
$
513,213

Cash received from options exercised
68,665

 
11,989

 
201,419

 
56,857


Stock-based Compensation
Stock options granted are exercisable for the full ten year contractual term regardless of employment status. The following table summarizes the assumptions used to value option grants using the lattice-binomial model and the valuation data:
 
Three Months Ended
 
Nine Months Ended
 
September 30,
2020
 
September 30,
2019
 
September 30,
2020
 
September 30,
2019
Dividend yield
—
%
 
—
%
 
—
%
 
—
%
Expected volatility
45
%
 
38
%
 
37% - 45%

 
38% - 41%

Risk-free interest rate
0.67
%
 
1.92
%
 
0.67% - 1.71%

 
1.92% - 2.74%

Suboptimal exercise factor
3.62

 
3.19

 
3.34 - 3.62

 
3.07 - 3.19

Weighted-average fair value (per share)
$
264

 
$
154

 
$
205

 
$
165

Total stock-based compensation expense (in thousands)
$
106,357

 
$
100,262

 
$
307,586

 
$
305,310

Total income tax impact on provision (in thousands)
$
24,292

 
$
22,679

 
$
68,435

 
$
69,152



The Company considers several factors in determining the suboptimal exercise factor, including the historical and estimated option exercise behavior.
The Company calculates expected volatility based solely on implied volatility. The Company believes that implied volatility of publicly traded options in its common stock is more reflective of market conditions, and given consistently high trade volumes of the options, can reasonably be expected to be a better indicator of expected volatility than historical volatility of its common stock.
In valuing shares issued under the Company’s employee stock option plans, the Company bases the risk-free interest rate on U.S. Treasury zero-coupon issues with terms similar to the contractual term of the options. The Company does not anticipate paying any cash dividends in the foreseeable future and therefore uses an expected dividend yield of zero in the option valuation model. The Company does not use a post-vesting termination rate as options are fully vested upon grant date.
v3.20.2
Income Taxes
 9 Months Ended
Sep. 30, 2020
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
 
 
Three Months Ended
 
Nine Months Ended
 
 
September 30,
2020
 
September 30,
2019
 
September 30, 2020
 
September 30, 2019
 
 
(in thousands, except percentages)
Provision for income taxes
 
$
71,484

 
$
347,079

 
$
473,693

 
$
632,952

Effective tax rate
 
8
%
 
34
%
 
18
%
 
33
%

        
On June 29, 2020, California enacted legislative changes that impose an annual cap of $5 million on the amount of business incentive tax credits the Company can utilize in California effective for tax years 2020 through 2022.
As of September 30, 2020, the Company had a California research and development ("R&D") credit carryforward of $239 million which can be carried forward indefinitely. In the second quarter of 2020 we evaluated the Company’s ability to realize the California R&D credit, the Company considered all available positive and negative evidence, including operating results, ongoing tax planning, and forecasts of future taxable income and determined it is more likely than not that the pre-2020 credits and a portion of the current year R&D credit would not be realized. In the nine months ended September 30, 2020, the Company has recorded a valuation allowance of $239 million. The Company will monitor its business strategies, weighing positive and negative evidence in assessing its realization of this asset in the future and in the event there is a need to release the valuation allowance, a tax benefit will be recorded.
The effective tax rates for the three and nine months ended September 30, 2020 differed from the Federal statutory rate primarily due to the recognition of excess tax benefits of stock-based compensation, partially offset by the establishment of a valuation allowance on the California R&D credit in the second quarter of 2020. The effective tax rates for the three and nine months ended September 30, 2019 differed from the Federal statutory rate primarily due to changes from the global corporate structure simplification, state taxes, foreign taxes, non-deductible expenses, and the international provisions of U.S. tax reform that became effective in 2018, partially offset by the recognition of excess tax benefits of stock-based compensation, and Federal and California R&D credits.
The decrease in effective tax rates for the three and nine months ended September 30, 2020, as compared to the same period in 2019 was primarily due to the United States Treasury issuance of final regulations that made certain aspects related to the Tax Cuts and Jobs Act of 2017 no longer applicable to the Company and the recognition of excess tax benefits of stock-based compensation, partially offset by the establishment of a valuation allowance on the California R&D credit in the second quarter of 2020. For the three and nine months ended September 30, 2020, the Company recognized a discrete tax benefit related to the excess tax benefits from stock-based compensation of $66 million and $223 million, respectively, compared to the three and nine months ended September 30, 2019 of $27 million and $114 million, respectively.
Gross unrecognized tax benefits were $85 million and $67 million as of September 30, 2020 and December 31, 2019, respectively. The gross unrecognized tax benefits, if recognized by the Company, will result in a reduction of approximately $49 million to the provision for income taxes thereby favorably impacting the Company’s effective tax rate. As of September 30, 2020, gross unrecognized tax benefits of $24 million were classified as “Other non-current liabilities” and $30 million as a reduction to deferred tax assets which was classified as "Other non-current assets" in the Consolidated Balance Sheets. The Company includes interest and penalties related to unrecognized tax benefits within the "Provision for income taxes" on the Consolidated Statements of Operations and “Other non-current liabilities” in the Consolidated Balance Sheets. Interest and penalties included in the Company’s “Provision for income taxes” were not material in any of the periods presented.
Deferred tax assets of $429 million and $658 million were classified as “Other non-current assets” on the Consolidated Balance Sheets as of September 30, 2020 and December 31, 2019, respectively. In evaluating its ability to realize the net deferred tax assets, the Company considered all available positive and negative evidence, including its past operating results and the forecast of future market growth, forecasted earnings, future taxable income, and prudent and feasible tax planning strategies. The Company has a valuation allowance of $371 million and
$135 million as of September 30, 2020 and December 31, 2019, respectively. The valuation allowance is related to the California R&D credits and certain foreign tax credits that the Company does not expect to realize.
The Company files U.S. Federal, state and foreign tax returns. The Company is currently under examination by the IRS for 2016 through 2018 and is subject to examination for 2019. The 2011 through 2019 state tax returns are subject to examination by various state tax authorities. The Company is also currently under examination in the U.K. for 2018 and 2019. The Company has no other significant foreign jurisdiction audits underway. The years 2014 through 2019 remain subject to examination by foreign tax authorities.
Given the potential outcome of the current examinations as well as the impact of the current examinations on the potential expiration of the statute of limitations, it is reasonably possible that the balance of unrecognized tax benefits could significantly change within the next twelve months. At this time, an estimate of the range of reasonably possible adjustments to the balance of unrecognized tax benefits cannot be made.
v3.20.2
Segment and Geographic Information
 9 Months Ended
Sep. 30, 2020
Segment Reporting [Abstract]  
Segment and Geographic Information Segment and Geographic Information

The Company operates as one operating segment. The Company's chief operating decision maker ("CODM") is its co-chief executive officers, who review financial information presented on a consolidated basis for the purposes of making operating decisions, assessing financial performance and allocating resources.
On July 13, 2020, Ted Sarandos was appointed as co-Chief Executive Officer of the Company and serves as Chief Content Officer and co-Chief Executive Officer with Reed Hastings, the Company’s co-Chief Executive Officer, President, and Chairman of the Board. The Company determined that both Mr. Sarandos and Mr. Hastings are its CODM and that there have been no changes to the Company's one operating segment as the Company's financial results continue to be evaluated on a consolidated basis by its CODM.
Total U.S. revenues were $2.8 billion and $8.0 billion, respectively, for the three and nine months ended September 30, 2020, and $2.5 billion and $7.0 billion, respectively, for the three and nine months ended September 30, 2019. See Note 2 Revenue Recognition for additional information about streaming revenue by region.
The Company's long-lived tangible assets, as well as the Company's operating lease right-of-use assets recognized on the Consolidated Balance Sheets as of September 30, 2020 and December 31, 2019, were located as follows:
 
As of
 
September 30,
2020
 
December 31, 2019
 
(in thousands)
United States
$
2,111,158

 
$
1,503,459

International
655,795

 
594,047
v3.20.2
Basis of Presentation and Summary of Significant Accounting Policies (Policies)
 9 Months Ended
Sep. 30, 2020
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Use of Estimates The preparation of consolidated financial statements in conformity with U.S. generally accepted accounting principles (“GAAP”) requires management to make estimates and judgments that affect the amounts reported in the consolidated financial statements and accompanying notes. Significant items subject to such estimates and assumptions include the content asset amortization policy and the recognition and measurement of income tax assets and liabilities. The Company bases its estimates on historical experience and on various other assumptions that the Company believes to be reasonable under the circumstances. On a regular basis, the Company evaluates the assumptions, judgments and estimates. Actual results may differ from these estimates.
Recently adopted accounting pronouncements
Recently adopted accounting pronouncements
In June 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2016-13, Financial Instruments - Credit Losses (Topic 326), in order to improve financial reporting of expected credit losses on financial instruments and other commitments to extend credit. ASU 2016-13 requires that an entity measure and recognize expected credit losses for financial assets held at amortized cost and replaces the incurred loss impairment methodology in prior GAAP with a methodology that requires consideration of a broader range of information to estimate credit losses. The Company adopted ASU 2016-13 in the first quarter of 2020 and the impact of the adoption was not material to the Company's consolidated financial statements as credit losses are not expected to be significant based on historical collection trends, the financial condition of payment partners, and external market factors. The Company will continue to actively monitor the impact of the coronavirus (COVID-19) pandemic on expected credit losses.
v3.20.2
Revenue Recognition (Tables)
 9 Months Ended
Sep. 30, 2020
Revenue from Contract with Customer [Abstract]  
Streaming Revenue, Paid net Membership Additions, and Ending Paid Memberships by Region
The following tables summarize streaming revenue, paid net membership additions, and paid memberships at end of period by region for the three and nine months ended September 30, 2020 and September 30, 2019, respectively:

United States and Canada (UCAN)
 
 
As of/ Three Months Ended
 
As of/ Nine Months Ended
 
 
September 30, 2020
 
September 30, 2019
 
September 30, 2020
 
September 30, 2019
 
 
(in thousands)
Revenues
 
$
2,933,445

 
$
2,621,250

 
$
8,475,891

 
$
7,379,300

Paid net membership additions
 
177

 
613

 
5,419

 
2,357

Paid memberships at end of period (1)
 
73,081

 
67,114

 
73,081

 
67,114


Europe, Middle East, and Africa (EMEA)
 
 
As of/ Three Months Ended
 
As of/ Nine Months Ended
 
 
September 30, 2020
 
September 30, 2019
 
September 30, 2020
 
September 30, 2019
 
 
(in thousands)
Revenues
 
$
2,019,083

 
$
1,428,040

 
$
5,635,094

 
$
3,980,506

Paid net membership additions
 
759

 
3,126

 
10,464

 
9,537

Paid memberships at end of period (1)
 
62,242

 
47,355

 
62,242

 
47,355


Latin America (LATAM)
 
 
As of/ Three Months Ended
 
As of/ Nine Months Ended
 
 
September 30, 2020
 
September 30, 2019
 
September 30, 2020
 
September 30, 2019
 
 
(in thousands)
Revenues
 
$
789,384

 
$
741,434

 
$
2,368,205

 
$
2,049,042

Paid net membership additions
 
256

 
1,490

 
4,907

 
3,303

Paid memberships at end of period (1)
 
36,324

 
29,380

 
36,324

 
29,380


Asia-Pacific (APAC)
 
 
As of/ Three Months Ended
 
As of/ Nine Months Ended
 
 
September 30, 2020
 
September 30, 2019
 
September 30, 2020
 
September 30, 2019
 
 
(in thousands)
Revenues
 
$
634,891

 
$
382,304

 
$
1,687,691

 
$
1,051,400

Paid net membership additions
 
1,012

 
1,543

 
7,271

 
3,878

Paid memberships at end of period (1)
 
23,504

 
14,485

 
23,504

 
14,485

(1) A paid membership (also referred to as a paid subscription) is defined as a membership that has the right to receive Netflix service following sign-up and a method of payment being provided, and that is not part of a free trial or other promotional offering by the Company to certain new and rejoining members. A membership is canceled and ceases to be reflected in the above metrics as of the effective cancellation date. Voluntary cancellations generally become effective at the end of the prepaid membership period. Involuntary cancellations, as a result of a failed method of payment, becomes effective immediately. Memberships are assigned to territories based on the geographic location used at time of sign-up as determined by the Company’s internal systems, which utilize industry standard geo-location technology.
v3.20.2
Earnings Per Share (Tables)
 9 Months Ended
Sep. 30, 2020
Earnings Per Share [Abstract]  
Computation of Earnings Per Share The computation of earnings per share is as follows:
 
Three Months Ended
 
Nine Months Ended
 
September 30,
2020
 
September 30,
2019
 
September 30,
2020
 
September 30,
2019
 
(in thousands, except per share data)
Basic earnings per share:
 
 
 
 
 
 
 
Net income
$
789,976

 
$
665,244

 
$
2,219,239

 
$
1,279,946

Shares used in computation:
 
 
 
 
 
 
 
Weighted-average common shares outstanding
441,526

 
438,090

 
440,486

 
437,547

Basic earnings per share
$
1.79

 
$
1.52

 
$
5.04

 
$
2.93

 
 
 
 
 
 
 
 
Diluted earnings per share:
 
 
 
 
 
 
 
Net income
$
789,976

 
$
665,244

 
$
2,219,239

 
$
1,279,946

Shares used in computation:
 
 
 
 
 
 
 
Weighted-average common shares outstanding
441,526

 
438,090

 
440,486

 
437,547

Employee stock options
13,562

 
13,462

 
13,360

 
14,349

Weighted-average number of shares
455,088

 
451,552

 
453,846

 
451,896

Diluted earnings per share
$
1.74

 
$
1.47

 
$
4.89

 
$
2.83
Summary of Potential Common Shares Excluded from the Diluted Calculation The following table summarizes the potential common shares excluded from the diluted calculation:
 
Three Months Ended
 
Nine Months Ended
 
September 30,
2020
 
September 30,
2019
 
September 30,
2020
 
September 30,
2019
 
(in thousands)
Employee stock options
124

 
2,402

 
560

 
1,268
v3.20.2
Cash, Cash Equivalents and Restricted Cash (Tables)
 9 Months Ended
Sep. 30, 2020
Short-Term Investments And Fair Value Measurement [Abstract]  
Schedule of Cash and Cash Equivalents and Restricted Cash

The following tables summarize the Company's cash, cash equivalents, and restricted cash as of September 30, 2020 and December 31, 2019:

 
As of September 30, 2020
 
Cash and cash equivalents
 
Other Current Assets
 
Non-current Assets
 
Total
 
(in thousands)
Cash
$
2,968,826

 
$
2,761

 
$
26,875

 
$
2,998,462

Level 1 securities:
 
 
 
 
 
 
 
Money market funds
5,123,565

 
—

 
253

 
5,123,818

Level 2 securities:
 
 
 
 
 
 
 
Foreign Time Deposits
300,000

 
—

 
—

 
300,000

 
 
 
 
 
 
 
 
 
$
8,392,391

 
$
2,761

 
$
27,128

 
$
8,422,280


 
As of December 31, 2019
 
Cash and cash equivalents
 
Other Current Assets
 
Non-current Assets
 
Total
 
(in thousands)
Cash
$
3,103,525

 
$
1,863

 
$
22,161

 
$
3,127,549

Level 1 securities:
 
 
 
 
 
 
 
Money market funds
1,614,912

 
—

 
1,325

 
1,616,237

Level 2 securities:
 
 
 
 
 
 
 
Foreign Time Deposits
300,000

 
—

 
—

 
300,000

 
 
 
 
 
 
 
 
 
$
5,018,437

 
$
1,863

 
$
23,486

 
$
5,043,786
v3.20.2
Balance Sheet Components (Tables)
 9 Months Ended
Sep. 30, 2020
Balance Sheet Components Disclosure [Abstract]  
Content Assets
Content assets consisted of the following:
 
As of
 
September 30,
2020
 
December 31,
2019
 
(in thousands)
Licensed content, net
$
14,297,143

 
$
14,703,352

 
 
 
 
Produced content, net


 


Released, less amortization
5,186,247

 
4,382,685

In production
4,696,990

 
4,750,664

In development and pre-production
887,253

 
667,866

 
10,770,490

 
9,801,215

 
 
 
 
Total
$
25,067,633

 
$
24,504,567

 
 
 
 
Schedule of Amortization of Streaming Content Assets
The following table represents the amortization of content assets:
 
Three Months Ended
 
September 30,
2020
 
September 30,
2019
 
(in thousands)
Licensed content
$
1,885,259

 
$
1,810,757

Produced content
848,484

 
469,220

Total
$
2,733,743

 
$
2,279,977



 
Nine Months Ended
 
September 30,
2020
 
September 30,
2019
 
(in thousands)
Licensed content
$
5,628,499

 
$
5,382,225

Produced content
2,195,788

 
1,254,353

Total
$
7,824,287

 
$
6,636,578
Property and Equipment, Net
Property and equipment and accumulated depreciation consisted of the following:
 
 
As of
 
 
 
 
September 30,
2020
 
December 31,
2019
 
Estimated Useful Lives
 
 
(in thousands)
 
 
Land
 
$
13,560

 
$
6,125

 
 
Buildings
 
41,894

 
33,141

 
30 years
Leasehold improvements
 
387,172

 
354,999

 
Over life of lease
Furniture and fixtures
 
95,240

 
87,465

 
3-15 years
Information technology
 
264,358

 
243,565

 
3 years
Corporate aircraft
 
110,621

 
108,995

 
8 years
Machinery and equipment
 
44,111

 
46,415

 
3-5 years
Capital work-in-progress
 
345,347

 
100,521

 
 
Property and equipment, gross
 
1,302,303

 
981,226

 
 
Less: Accumulated depreciation
 
(474,185
)
 
(416,005
)
 
 
Property and equipment, net
 
$
828,118

 
$
565,221

 
 
Information on Right-of-Use Assets and Lease Liabilities
Information related to the Company's right-of-use assets and related lease liabilities were as follows:
 
Three Months Ended
 
September 30, 2020
 
September 30, 2019
 
(in thousands)
Cash paid for operating lease liabilities
$
70,917

 
$
51,767

Right-of-use assets obtained in exchange for new operating lease obligations
175,901

 
77,549



 
Nine Months Ended
 
September 30, 2020
 
September 30, 2019
 
(in thousands)
Cash paid for operating lease liabilities
$
187,880

 
$
130,740

Right-of-use assets obtained in exchange for new operating lease obligations (1)
592,331

 
1,150,443

(1) In the nine months ended September 30, 2019, the balance includes $743 million for operating leases existing on January 1, 2019.
Other Current Assets
Other current assets consisted of the following:
 
 
As of
 
 
September 30,
2020
 
December 31,
2019
 
 
(in thousands)
Trade receivables
 
$
604,789

 
$
454,399

Prepaid expenses
 
209,218

 
180,999

Other
 
620,082

 
524,669

Total other current assets
 
$
1,434,089

 
$
1,160,067
v3.20.2
Debt (Tables)
 9 Months Ended
Sep. 30, 2020
Debt Disclosure [Abstract]  
Summary of Long-term Debt
The following table provides a summary of the Company's outstanding debt and the fair values based on quoted market prices in less active markets as of September 30, 2020 and December 31, 2019:
 
 
Principal Amount at Par
 
 
 
 
Level 2 Fair Value as of
 
 
September 30, 2020
 
December 31, 2019
Issuance Date
 
Maturity
 
September 30, 2020
 
December 31, 2019
 
 
(in millions)
 
 
 
 
(in millions)
5.375% Senior Notes
 
$
500

 
$
500

February 2013
 
February 2021
 
$
507

 
$
518

5.500% Senior Notes
 
700

 
700

February 2015
 
February 2022
 
736

 
744

5.750% Senior Notes
 
400

 
400

February 2014
 
March 2024
 
445

 
444

5.875% Senior Notes
 
800

 
800

February 2015
 
February 2025
 
906

 
896

3.000% Senior Notes (1)
 
551

 
—

April 2020
 
June 2025
 
575

 
—

3.625% Senior Notes
 
500

 
—

April 2020
 
June 2025
 
523

 
—

4.375% Senior Notes
 
1,000

 
1,000

October 2016
 
November 2026
 
1,092

 
1,026

3.625% Senior Notes (1)
 
1,523

 
1,459

May 2017
 
May 2027
 
1,651

 
1,565

4.875% Senior Notes
 
1,600

 
1,600

October 2017
 
April 2028
 
1,800

 
1,670

5.875% Senior Notes
 
1,900

 
1,900

April 2018
 
November 2028
 
2,269

 
2,111

4.625% Senior Notes (1)
 
1,289

 
1,234

October 2018
 
May 2029
 
1,495

 
1,378

6.375% Senior Notes
 
800

 
800

October 2018
 
May 2029
 
989

 
916

3.875% Senior Notes (1)
 
1,406

 
1,346

April 2019
 
November 2029
 
1,556

 
1,429

5.375% Senior Notes
 
900

 
900

April 2019
 
November 2029
 
1,062

 
960

3.625% Senior Notes (1)
 
1,289

 
1,234

October 2019
 
June 2030
 
1,402

 
1,273

4.875% Senior Notes
 
1,000

 
1,000

October 2019
 
June 2030
 
1,142

 
1,019

 
 
$
16,158

 
$
14,873

 
 
 
 
$
18,150

 
$
15,949


(1) The following Senior Notes have a principal amount denominated in euro: 3.000% Senior Notes for €470 million, 3.625% Senior Notes for €1,300 million, 4.625% Senior Notes for €1,100 million, 3.875% Senior Notes for €1,200 million, and 3.625% Senior Notes for €1,100 million.
Schedule of Maturities of Long-term Debt
The expected timing of principal and interest payments for these Notes are as follows:
 
As of 
 
September 30,
2020
 
December 31, 2019
 
(in thousands)
Less than one year
$
1,258,639

 
$
736,969

Due after one year and through three years
2,136,439

 
2,581,471

Due after three years and through five years
3,612,818

 
1,705,201

Due after five years
14,875,099

 
15,699,800

Total debt obligations
$
21,882,995

 
$
20,723,441
v3.20.2
Commitments and Contingencies (Tables)
 9 Months Ended
Sep. 30, 2020
Commitments and Contingencies Disclosure [Abstract]  
Expected Timing of Payments for Commitments
The expected timing of payments for these content obligations is as follows:
 
As of 
 
September 30,
2020
 
December 31,
2019
 
(in thousands)
Less than one year
$
8,668,296

 
$
8,477,367

Due after one year and through three years
8,004,624

 
8,352,731

Due after three years and through five years
1,956,565

 
2,041,340

Due after five years
442,769

 
618,644

Total content obligations
$
19,072,254

 
$
19,490,082
v3.20.2
Stockholders' Equity (Tables)
 9 Months Ended
Sep. 30, 2020
Stockholders' Equity and Stock-based Compensation Disclosure [Abstract]  
Summary of Activity Related to Stock Option Plans
A summary of the activities related to the Company’s stock option plans is as follows:
 
 
 
Options Outstanding
 
Shares
Available
for Grant
 
Number of
Shares
 
Weighted-
Average
Exercise Price
(per share)
Balances as of December 31, 2019
6,111,561

 
20,859,326

 
$
124.28

New Shares Authorized
17,500,000

 
—

 
—

Granted
(1,498,232
)
 
1,498,232

 
412.45

Exercised
—

 
(2,988,359
)
 
67.58

Expired
—

 
(188
)
 
13.38

Balances as of September 30, 2020
22,113,329

 
19,369,011

 
$
155.32

Vested and exercisable as of September 30, 2020
 
 
19,369,011

 
$
155.32
Summary of Amounts Related to Option Exercises
A summary of the amounts related to option exercises, is as follows:
 
Three Months Ended
 
Nine Months Ended
 
September 30,
2020
 
September 30,
2019
 
September 30,
2020
 
September 30,
2019
 
(in thousands)
Total intrinsic value of options exercised
$
321,859

 
$
119,439

 
$
1,067,241

 
$
513,213

Cash received from options exercised
68,665

 
11,989

 
201,419

 
56,857
Summary of Assumptions Used to Value Stock Option Grants Using Lattice-Binomial Model The following table summarizes the assumptions used to value option grants using the lattice-binomial model and the valuation data:
 
Three Months Ended
 
Nine Months Ended
 
September 30,
2020
 
September 30,
2019
 
September 30,
2020
 
September 30,
2019
Dividend yield
—
%
 
—
%
 
—
%
 
—
%
Expected volatility
45
%
 
38
%
 
37% - 45%

 
38% - 41%

Risk-free interest rate
0.67
%
 
1.92
%
 
0.67% - 1.71%

 
1.92% - 2.74%

Suboptimal exercise factor
3.62

 
3.19

 
3.34 - 3.62

 
3.07 - 3.19

Weighted-average fair value (per share)
$
264

 
$
154

 
$
205

 
$
165

Total stock-based compensation expense (in thousands)
$
106,357

 
$
100,262

 
$
307,586

 
$
305,310

Total income tax impact on provision (in thousands)
$
24,292

 
$
22,679

 
$
68,435

 
$
69,152
v3.20.2
Income Taxes (Tables)
 9 Months Ended
Sep. 30, 2020
Income Tax Disclosure [Abstract]  
Schedule of Components of Income Tax Expense (Benefit)
 
 
Three Months Ended
 
Nine Months Ended
 
 
September 30,
2020
 
September 30,
2019
 
September 30, 2020
 
September 30, 2019
 
 
(in thousands, except percentages)
Provision for income taxes
 
$
71,484

 
$
347,079

 
$
473,693

 
$
632,952

Effective tax rate
 
8
%
 
34
%
 
18
%
 
33
%
v3.20.2
Segment and Geographic Information (Tables)
 9 Months Ended
Sep. 30, 2020
Segment Reporting [Abstract]  
Long-lived Assets by Geographic Areas
The Company's long-lived tangible assets, as well as the Company's operating lease right-of-use assets recognized on the Consolidated Balance Sheets as of September 30, 2020 and December 31, 2019, were located as follows:
 
As of
 
September 30,
2020
 
December 31, 2019
 
(in thousands)
United States
$
2,111,158

 
$
1,503,459

International
655,795

 
594,047
v3.20.2
Revenue Recognition - Revenue and Membership Information (Details)
membership in Thousands, $ in Thousands
 3 Months Ended 9 Months Ended
Sep. 30, 2020
USD ($)
membership
Sep. 30, 2019
USD ($)
membership
Sep. 30, 2020
USD ($)
membership
Sep. 30, 2019
USD ($)
membership
Disaggregation of Revenue [Line Items]        
Revenues | $ $ 6,435,637 $ 5,244,905 $ 18,351,614 $ 14,689,013
United States and Canada        
Disaggregation of Revenue [Line Items]        
Paid net membership additions (in memberships) 177 613 5,419 2,357
Paid memberships at end of period (in memberships) 73,081 67,114 73,081 67,114
Europe, Middle East, and Africa        
Disaggregation of Revenue [Line Items]        
Paid net membership additions (in memberships) 759 3,126 10,464 9,537
Paid memberships at end of period (in memberships) 62,242 47,355 62,242 47,355
Latin America        
Disaggregation of Revenue [Line Items]        
Paid net membership additions (in memberships) 256 1,490 4,907 3,303
Paid memberships at end of period (in memberships) 36,324 29,380 36,324 29,380
Asia-Pacific        
Disaggregation of Revenue [Line Items]        
Paid net membership additions (in memberships) 1,012 1,543 7,271 3,878
Paid memberships at end of period (in memberships) 23,504 14,485 23,504 14,485
Streaming | United States and Canada        
Disaggregation of Revenue [Line Items]        
Revenues | $ $ 2,933,445 $ 2,621,250 $ 8,475,891 $ 7,379,300
Streaming | Europe, Middle East, and Africa        
Disaggregation of Revenue [Line Items]        
Revenues | $ 2,019,083 1,428,040 5,635,094 3,980,506
Streaming | Latin America        
Disaggregation of Revenue [Line Items]        
Revenues | $ 789,384 741,434 2,368,205 2,049,042
Streaming | Asia-Pacific        
Disaggregation of Revenue [Line Items]        
Revenues | $ $ 634,891 $ 382,304 $ 1,687,691 $ 1,051,400
v3.20.2
Revenue Recognition - Additional Information (Details) - USD ($)
$ in Thousands
 3 Months Ended 9 Months Ended
Sep. 30, 2020
Sep. 30, 2019
Sep. 30, 2020
Sep. 30, 2019
Dec. 31, 2019
Disaggregation of Revenue [Line Items]          
Revenues $ 6,435,637 $ 5,244,905 $ 18,351,614 $ 14,689,013  
Deferred revenue 1,040,202   1,040,202   $ 924,745
Increase in deferred revenue 10,941 22,729 115,457 154,607  
DVD          
Disaggregation of Revenue [Line Items]          
Revenues 59,000 72,000 185,000 229,000  
United States          
Disaggregation of Revenue [Line Items]          
Revenues $ 2,800,000 $ 2,500,000 $ 8,000,000 $ 7,000,000  
v3.20.2
Earnings Per Share - Calculation of EPS (Details) - USD ($)
$ / shares in Units, shares in Thousands, $ in Thousands
 3 Months Ended 9 Months Ended
Sep. 30, 2020
Sep. 30, 2019
Sep. 30, 2020
Sep. 30, 2019
Basic earnings per share:        
Net income $ 789,976 $ 665,244 $ 2,219,239 $ 1,279,946
Weighted-average common shares outstanding (in shares) 441,526 438,090 440,486 437,547
Basic earnings per share (in dollars per share) $ 1.79 $ 1.52 $ 5.04 $ 2.93
Diluted earnings per share:        
Net income $ 789,976 $ 665,244 $ 2,219,239 $ 1,279,946
Shares used in computation:        
Weighted-average common shares outstanding (in shares) 441,526 438,090 440,486 437,547
Employee stock options (in shares) 13,562 13,462 13,360 14,349
Weighted-average number of shares (in shares) 455,088 451,552 453,846 451,896
Diluted earnings per share (in dollars per share) $ 1.74 $ 1.47 $ 4.89 $ 2.83
v3.20.2
Earnings Per Share - Antidilutive Shares (Details) - shares
shares in Thousands
 3 Months Ended 9 Months Ended
Sep. 30, 2020
Sep. 30, 2019
Sep. 30, 2020
Sep. 30, 2019
Earnings Per Share [Abstract]        
Antidilutive securities excluded from earnings per share calculations 124 2,402 560 1,268
v3.20.2
Cash, Cash Equivalents and Restricted Cash (Details) - USD ($)
$ in Thousands
Sep. 30, 2020
Jun. 30, 2020
Dec. 31, 2019
Sep. 30, 2019
Jun. 30, 2019
Dec. 31, 2018
Cash and Cash Equivalents [Line Items]            
Cash, cash equivalents, and restricted cash $ 8,422,280 $ 7,180,046 $ 5,043,786 $ 4,459,721 $ 5,028,205 $ 3,812,041
Cash and cash equivalents            
Cash and Cash Equivalents [Line Items]            
Cash, cash equivalents, and restricted cash 8,392,391   5,018,437      
Other Current Assets            
Cash and Cash Equivalents [Line Items]            
Cash, cash equivalents, and restricted cash 2,761   1,863      
Non-current Assets            
Cash and Cash Equivalents [Line Items]            
Cash, cash equivalents, and restricted cash 27,128   23,486      
Cash            
Cash and Cash Equivalents [Line Items]            
Cash, cash equivalents, and restricted cash 2,998,462   3,127,549      
Cash | Cash and cash equivalents            
Cash and Cash Equivalents [Line Items]            
Cash, cash equivalents, and restricted cash 2,968,826   3,103,525      
Cash | Other Current Assets            
Cash and Cash Equivalents [Line Items]            
Cash, cash equivalents, and restricted cash 2,761   1,863      
Cash | Non-current Assets            
Cash and Cash Equivalents [Line Items]            
Cash, cash equivalents, and restricted cash 26,875   22,161      
Level 1 Securities | Money market funds            
Cash and Cash Equivalents [Line Items]            
Cash, cash equivalents, and restricted cash 5,123,818   1,616,237      
Level 1 Securities | Money market funds | Cash and cash equivalents            
Cash and Cash Equivalents [Line Items]            
Cash, cash equivalents, and restricted cash 5,123,565   1,614,912      
Level 1 Securities | Money market funds | Other Current Assets            
Cash and Cash Equivalents [Line Items]            
Cash, cash equivalents, and restricted cash 0   0      
Level 1 Securities | Money market funds | Non-current Assets            
Cash and Cash Equivalents [Line Items]            
Cash, cash equivalents, and restricted cash 253   1,325      
Level 2 Securities | Foreign Time Deposits            
Cash and Cash Equivalents [Line Items]            
Cash, cash equivalents, and restricted cash 300,000   300,000      
Level 2 Securities | Foreign Time Deposits | Cash and cash equivalents            
Cash and Cash Equivalents [Line Items]            
Cash, cash equivalents, and restricted cash 300,000   300,000      
Level 2 Securities | Foreign Time Deposits | Other Current Assets            
Cash and Cash Equivalents [Line Items]            
Cash, cash equivalents, and restricted cash 0   0      
Level 2 Securities | Foreign Time Deposits | Non-current Assets            
Cash and Cash Equivalents [Line Items]            
Cash, cash equivalents, and restricted cash $ 0   $ 0      
v3.20.2
Balance Sheet Components - Components of Content Assets (Details) - USD ($)
$ in Thousands
 3 Months Ended 9 Months Ended
Sep. 30, 2020
Sep. 30, 2019
Sep. 30, 2020
Sep. 30, 2019
Dec. 31, 2019
Finite-Lived Intangible Assets [Line Items]          
Content assets, net $ 25,067,633   $ 25,067,633   $ 24,504,567
Amortization of content assets 2,733,743 $ 2,279,977 7,824,287 $ 6,636,578  
Licensed content, net          
Finite-Lived Intangible Assets [Line Items]          
Net content 14,297,143   14,297,143   14,703,352
Unamortized cost in year one 5,743,000   5,743,000    
Unamortized cost in year two 3,675,000   3,675,000    
Unamortized cost in year three 2,264,000   2,264,000    
Amortization of content assets 1,885,259 1,810,757 5,628,499 5,382,225  
Produced content, net          
Finite-Lived Intangible Assets [Line Items]          
Net content 5,186,247   5,186,247   4,382,685
In production 4,696,990   4,696,990   4,750,664
In development and pre-production 887,253   887,253   667,866
Content assets, net 10,770,490   10,770,490   $ 9,801,215
Unamortized cost in year one 1,894,000   1,894,000    
Unamortized cost in year two 1,465,000   1,465,000    
Unamortized cost in year three 1,025,000   1,025,000    
Amortization of content assets $ 848,484 $ 469,220 $ 2,195,788 $ 1,254,353  
v3.20.2
Balance Sheet Components - Property And Equipment (Details) - USD ($)
$ in Thousands
 9 Months Ended
Sep. 30, 2020
Dec. 31, 2019
Property, Plant and Equipment [Line Items]    
Property and equipment, gross $ 1,302,303 $ 981,226
Less: Accumulated depreciation (474,185) (416,005)
Property and equipment, net 828,118 565,221
Land    
Property, Plant and Equipment [Line Items]    
Property and equipment, gross 13,560 6,125
Buildings    
Property, Plant and Equipment [Line Items]    
Property and equipment, gross $ 41,894 33,141
Estimated Useful Lives 30 years  
Leasehold improvements    
Property, Plant and Equipment [Line Items]    
Property and equipment, gross $ 387,172 354,999
Furniture and fixtures    
Property, Plant and Equipment [Line Items]    
Property and equipment, gross $ 95,240 87,465
Furniture and fixtures | Minimum    
Property, Plant and Equipment [Line Items]    
Estimated Useful Lives 3 years  
Furniture and fixtures | Maximum    
Property, Plant and Equipment [Line Items]    
Estimated Useful Lives 15 years  
Information technology    
Property, Plant and Equipment [Line Items]    
Property and equipment, gross $ 264,358 243,565
Estimated Useful Lives 3 years  
Corporate aircraft    
Property, Plant and Equipment [Line Items]    
Property and equipment, gross $ 110,621 108,995
Estimated Useful Lives 8 years  
Machinery and equipment    
Property, Plant and Equipment [Line Items]    
Property and equipment, gross $ 44,111 46,415
Machinery and equipment | Minimum    
Property, Plant and Equipment [Line Items]    
Estimated Useful Lives 3 years  
Machinery and equipment | Maximum    
Property, Plant and Equipment [Line Items]    
Estimated Useful Lives 5 years  
Capital work-in-progress    
Property, Plant and Equipment [Line Items]    
Property and equipment, gross $ 345,347 $ 100,521
v3.20.2
Balance Sheet Components - Leases (Details) - USD ($)
$ in Thousands
 3 Months Ended 9 Months Ended
Sep. 30, 2020
Sep. 30, 2019
Sep. 30, 2020
Sep. 30, 2019
Dec. 31, 2019
Jan. 01, 2019
Lessee, Lease, Description [Line Items]            
Operating lease right-of-use assets $ 1,939,000   $ 1,939,000   $ 1,532,000  
Operating lease liabilities 2,090,000   2,090,000   1,613,000  
Current operating lease liabilities 237,000   237,000   190,000  
Non-current operating lease liabilities 1,853,000   1,853,000   $ 1,423,000  
Cash paid for operating lease liabilities 70,917 $ 51,767 187,880 $ 130,740    
Right-of-use assets obtained in exchange for new operating lease obligations $ 175,901 $ 77,549 $ 592,331 $ 1,150,443    
ASU 2016-02            
Lessee, Lease, Description [Line Items]            
Operating lease right-of-use assets           $ 743,000
v3.20.2
Balance Sheet Components - Other Current Assets (Details) - USD ($)
$ in Thousands
Sep. 30, 2020
Dec. 31, 2019
Balance Sheet Components Disclosure [Abstract]    
Trade receivables $ 604,789 $ 454,399
Prepaid expenses 209,218 180,999
Other 620,082 524,669
Total other current assets $ 1,434,089 $ 1,160,067
v3.20.2
Debt - Narrative (Details)
$ in Thousands
 3 Months Ended 9 Months Ended
Sep. 30, 2020
USD ($)
Sep. 30, 2019
USD ($)
Sep. 30, 2020
USD ($)
Sep. 30, 2019
USD ($)
Sep. 30, 2020
EUR (€)
Dec. 31, 2019
USD ($)
Debt Instrument [Line Items]            
Aggregate outstanding notes $ 16,047,000   $ 16,047,000      
Debt issuance costs 111,000   111,000     $ 114,000
Short-term debt 499,517   499,517     0
Long-term debt 15,547,616   15,547,616     14,759,260
Long-term notes denominated in foreign currency 16,158,000   16,158,000     $ 14,873,000
Foreign currency remeasurement loss (gain) on debt 249,194 $ (171,360) 275,295 $ (167,676)    
Senior Notes            
Debt Instrument [Line Items]            
Long-term notes denominated in foreign currency | €         € 5,170,000,000  
Foreign currency remeasurement loss (gain) on debt $ 249,000   $ 275,000      
Redemption prices, percent of outstanding principal     101.00%      
v3.20.2
Debt - Summary of Long-term Debt (Details)
$ in Millions
Sep. 30, 2020
USD ($)
Sep. 30, 2020
EUR (€)
Dec. 31, 2019
USD ($)
Dec. 31, 2019
EUR (€)
Debt Instrument [Line Items]        
Principal amount at par $ 16,158   $ 14,873  
Fair value 18,150   15,949  
Senior Notes        
Debt Instrument [Line Items]        
Principal amount at par | €   € 5,170,000,000    
Senior Notes | 5.375% Senior Notes        
Debt Instrument [Line Items]        
Principal amount at par 500   500  
Fair value $ 507   $ 518  
Interest rate 5.375% 5.375% 5.375% 5.375%
Senior Notes | 5.500% Senior Notes        
Debt Instrument [Line Items]        
Principal amount at par $ 700   $ 700  
Fair value $ 736   $ 744  
Interest rate 5.50% 5.50% 5.50% 5.50%
Senior Notes | 5.750% Senior Notes        
Debt Instrument [Line Items]        
Principal amount at par $ 400   $ 400  
Fair value $ 445   $ 444  
Interest rate 5.75% 5.75% 5.75% 5.75%
Senior Notes | 5.875% Senior Notes        
Debt Instrument [Line Items]        
Principal amount at par $ 800   $ 800  
Fair value $ 906   $ 896  
Interest rate 5.875% 5.875% 5.875% 5.875%
Senior Notes | 3.000% Senior Notes        
Debt Instrument [Line Items]        
Principal amount at par $ 551 € 470,000,000 $ 0 € 470,000,000
Fair value $ 575   $ 0  
Interest rate 3.00% 3.00% 3.00% 3.00%
Senior Notes | 3.625% Senior Notes        
Debt Instrument [Line Items]        
Principal amount at par $ 500   $ 0  
Fair value $ 523   $ 0  
Interest rate 3.625% 3.625% 3.625% 3.625%
Senior Notes | 4.375% Senior Notes        
Debt Instrument [Line Items]        
Principal amount at par $ 1,000   $ 1,000  
Fair value $ 1,092   $ 1,026  
Interest rate 4.375% 4.375% 4.375% 4.375%
Senior Notes | 3.625% Senior Notes        
Debt Instrument [Line Items]        
Principal amount at par $ 1,523 € 1,300,000,000 $ 1,459 € 1,300,000,000
Fair value $ 1,651   $ 1,565  
Interest rate 3.625% 3.625% 3.625% 3.625%
Senior Notes | 4.875% Senior Notes        
Debt Instrument [Line Items]        
Principal amount at par $ 1,600   $ 1,600  
Fair value $ 1,800   $ 1,670  
Interest rate 4.875% 4.875% 4.875% 4.875%
Senior Notes | 5.875% Senior Notes        
Debt Instrument [Line Items]        
Principal amount at par $ 1,900   $ 1,900  
Fair value $ 2,269   $ 2,111  
Interest rate 5.875% 5.875% 5.875% 5.875%
Senior Notes | 4.625% Senior Notes        
Debt Instrument [Line Items]        
Principal amount at par $ 1,289 € 1,100,000,000 $ 1,234 € 1,100,000,000
Fair value $ 1,495   $ 1,378  
Interest rate 4.625% 4.625% 4.625% 4.625%
Senior Notes | 6.375% Senior Notes        
Debt Instrument [Line Items]        
Principal amount at par $ 800   $ 800  
Fair value $ 989   $ 916  
Interest rate 6.375% 6.375% 6.375% 6.375%
Senior Notes | 3.875% Senior Notes        
Debt Instrument [Line Items]        
Principal amount at par $ 1,406 € 1,200,000,000 $ 1,346 € 1,200,000,000
Fair value $ 1,556   $ 1,429  
Interest rate 3.875% 3.875% 3.875% 3.875%
Senior Notes | 5.375% Senior Notes        
Debt Instrument [Line Items]        
Principal amount at par $ 900   $ 900  
Fair value $ 1,062   $ 960  
Interest rate 5.375% 5.375% 5.375% 5.375%
Senior Notes | 3.625% Senior Notes        
Debt Instrument [Line Items]        
Principal amount at par $ 1,289 € 1,100,000,000 $ 1,234 € 1,100,000,000
Fair value $ 1,402   $ 1,273  
Interest rate 3.625% 3.625% 3.625% 3.625%
Senior Notes | 4.875% Senior Notes        
Debt Instrument [Line Items]        
Principal amount at par $ 1,000   $ 1,000  
Fair value $ 1,142   $ 1,019  
Interest rate 4.875% 4.875% 4.875% 4.875%
v3.20.2
Debt - Maturities (Details) - USD ($)
$ in Thousands
Sep. 30, 2020
Dec. 31, 2019
Debt Disclosure [Abstract]    
Less than one year $ 1,258,639 $ 736,969
Due after one year and through three years 2,136,439 2,581,471
Due after three years and through five years 3,612,818 1,705,201
Due after five years 14,875,099 15,699,800
Total $ 21,882,995 $ 20,723,441
v3.20.2
Debt - Revolving Line of Credit (Details) - Revolving Credit Facility
 9 Months Ended
Sep. 30, 2020
USD ($)
Line of Credit Facility [Line Items]  
Line of credit facility, maximum borrowing capacity $ 750,000,000
Commitment fee percentage 0.10%
LIBOR  
Line of Credit Facility [Line Items]  
Basis spread on variable rate 0.75%
Federal Funds Rate  
Line of Credit Facility [Line Items]  
Basis spread on variable rate 0.50%
One-month LIBOR  
Line of Credit Facility [Line Items]  
Basis spread on variable rate 1.00%
One-month LIBOR | Minimum  
Line of Credit Facility [Line Items]  
Basis spread on variable rate 0.00%
v3.20.2
Commitments and Contingencies - Streaming Content (Details) - USD ($)
$ in Thousands
Sep. 30, 2020
Dec. 31, 2019
Contractual Obligation [Line Items]    
Total streaming content obligations $ 19,072,254 $ 19,490,082
Current content liabilities 4,599,654 4,413,561
Non-current content liabilities 2,926,574 3,334,323
Streaming obligations not reflected on Consolidated Balance Sheets 11,600,000 11,800,000
Current content liabilities    
Contractual Obligation [Line Items]    
Current content liabilities 4,600,000 4,400,000
Non-current content liabilities    
Contractual Obligation [Line Items]    
Non-current content liabilities $ 2,900,000 $ 3,300,000
v3.20.2
Commitments and Contingencies - Expected Timing of Payments (Details) - USD ($)
$ in Thousands
Sep. 30, 2020
Dec. 31, 2019
Commitments and Contingencies Disclosure [Abstract]    
Less than one year $ 8,668,296 $ 8,477,367
Due after one year and through three years 8,004,624 8,352,731
Due after three years and through five years 1,956,565 2,041,340
Due after five years 442,769 618,644
Total content obligations $ 19,072,254 $ 19,490,082
v3.20.2
Commitments and Contingencies - Legal Proceedings (Details)
Sep. 30, 2020
USD ($)
Commitments and Contingencies Disclosure [Abstract]  
Indemnification obligations $ 0
v3.20.2
Stockholders' Equity Stockholders' Equity - Stock Option Plan Narrative (Details) - USD ($)
$ in Millions
 9 Months Ended
Sep. 30, 2020
Dec. 31, 2019
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]    
Shares available for grant (in shares) 22,113,329 6,111,561
Aggregate intrinsic value $ 6,684  
Weighted-average remaining contractual term (in years) 5 years 5 months 19 days  
2020 Stock Plan    
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]    
Shares available for grant (in shares) 17,500,000  
2011 Stock Plan    
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]    
Shares available for grant (in shares) 5,530,106  
v3.20.2
Stockholders' Equity - Activity Related to Stock Option Plans (Details)
 9 Months Ended
Sep. 30, 2020
$ / shares
shares
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward]  
Shares available for grant, beginning balance (in shares) 6,111,561
Options outstanding, number of shares, beginning balance (in shares) 20,859,326
Shares available for grant, number of shares authorized (in shares) 17,500,000
Options outstanding, number of shares granted (in shares) (1,498,232)
Options outstanding, number of shares granted (in shares) 1,498,232
Options outstanding, number of shares, exercised (in shares) (2,988,359)
Options outstanding, number of shares expired (in shares) (188)
Shares available for grant, ending balance (in shares) 22,113,329
Options outstanding, number of shares, ending balance (in shares) 19,369,011
Options vested and exercisable, number of shares, ending balance (in shares) 19,369,011
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Roll Forward]  
Options outstanding, weighted-average exercise price, beginning balance (dollars per share) | $ / shares $ 124.28
Options outstanding, weighted-average exercise price, granted (dollars per share) | $ / shares 412.45
Options outstanding, weighted-average exercise price, exercised (dollars per share) | $ / shares 67.58
Options expired, weighted-average exercise price (dollars per share) | $ / shares 13.38
Options outstanding, weighted-average exercise price, ending balance (dollars per share) | $ / shares 155.32
Options outstanding, weighted-average exercise price, vested and exercisable (dollars per share) | $ / shares $ 155.32
v3.20.2
Stockholders' Equity - Amounts Related to Option Exercises (Details) - USD ($)
$ in Thousands
 3 Months Ended 9 Months Ended
Sep. 30, 2020
Sep. 30, 2019
Sep. 30, 2020
Sep. 30, 2019
Stockholders' Equity and Stock-based Compensation Disclosure [Abstract]        
Total intrinsic value of options exercised $ 321,859 $ 119,439 $ 1,067,241 $ 513,213
Cash received from options exercised $ 68,665 $ 11,989 $ 201,419 $ 56,857
v3.20.2
Stockholders' Equity - Assumptions Used to Value Stock Options (Details)
$ / shares in Units, $ in Thousands
 3 Months Ended 9 Months Ended
Sep. 30, 2020
USD ($)
$ / shares
Sep. 30, 2019
USD ($)
$ / shares
Sep. 30, 2020
USD ($)
$ / shares
Sep. 30, 2019
USD ($)
$ / shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]        
Share-based payment award, expiration period (in years)     10 years  
Dividend yield 0.00% 0.00% 0.00% 0.00%
Expected volatility 45.00% 38.00%    
Expected volatility, minimum     37.00% 38.00%
Expected volatility, maximum     45.00% 41.00%
Risk-free interest rate 0.67% 1.92%    
Risk-free interest rate, minimum     0.67% 1.92%
Risk-free interest rate, maximum     1.71% 2.74%
Suboptimal exercise factor 3.62 3.19    
Weighted-average fair value (in dollars per share) | $ / shares $ 264 $ 154 $ 205 $ 165
Total stock-based compensation expense $ 106,357 $ 100,262 $ 307,586 $ 305,310
Total income tax impact on provision $ 24,292 $ 22,679 $ 68,435 $ 69,152
Minimum        
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]        
Suboptimal exercise factor     3.34 3.07
Maximum        
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]        
Suboptimal exercise factor     3.62 3.19
v3.20.2
Income Taxes (Details) - USD ($)
$ in Thousands
 3 Months Ended 9 Months Ended
Sep. 30, 2020
Sep. 30, 2019
Sep. 30, 2020
Sep. 30, 2019
Dec. 31, 2019
Income Tax Disclosure [Abstract]          
Provision for income taxes $ 71,484 $ 347,079 $ 473,693 $ 632,952  
Effective tax rates 8.00% 34.00% 18.00% 33.00%  
Income Tax Contingency [Line Items]          
Tax benefit from share based compensation $ 66,000 $ 27,000 $ 223,000 $ 114,000  
Unrecognized tax benefits 85,000   85,000   $ 67,000
Reduction in provision for income taxes due to impact of effective tax rate 49,000   49,000    
Deferred tax assets, valuation allowance 371,000   371,000   135,000
Other noncurrent liabilities          
Income Tax Contingency [Line Items]          
Unrecognized tax benefits 24,000   24,000    
Non-current Assets          
Income Tax Contingency [Line Items]          
Unrecognized tax benefits 30,000   30,000    
Deferred tax assets 429,000   429,000   $ 658,000
Research Tax Credit Carryforward          
Income Tax Contingency [Line Items]          
Tax credit carryforward 239,000   239,000    
Valuation allowance $ 239,000   $ 239,000    
v3.20.2
Segment and Geographic Information - Narrative (Details)
$ in Thousands
 3 Months Ended 9 Months Ended
Sep. 30, 2020
USD ($)
Sep. 30, 2019
USD ($)
Sep. 30, 2020
USD ($)
segment
Sep. 30, 2019
USD ($)
Segment Reporting Information [Line Items]        
Number of operating segments | segment     1  
Revenues $ 6,435,637 $ 5,244,905 $ 18,351,614 $ 14,689,013
United States        
Segment Reporting Information [Line Items]        
Revenues $ 2,800,000 $ 2,500,000 $ 8,000,000 $ 7,000,000
v3.20.2
Segment and Geographic Information - Long-lived Assets by Geographical Areas (Details) - USD ($)
$ in Thousands
Sep. 30, 2020
Dec. 31, 2019
United States    
Revenues from External Customers and Long-Lived Assets [Line Items]    
Long-lived tangible assets $ 2,111,158 $ 1,503,459
International    
Revenues from External Customers and Long-Lived Assets [Line Items]    
Long-lived tangible assets $ 655,795 $ 594,047