NFLX
Netflix
Content / Subscription
★ Quality 73/100Price today
$78.25
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See what it is worthcharlieapp.co
What this business is made of
The business
Netflix charges monthly rent on half the world's couch.
Netflix sells video streaming subscriptions to more than 300 million households, who pay a fixed fee every month. It already has a cheaper plan with ads, whose ad revenue doubles to more than $3B in 2026. 2025 revenue of $45.2B with a gross margin of 48%.
The moat is scale: it spends ~$17B a year on content that a new rival can't match, and it knows what you watch to decide what to produce. The brand is a verb ('saw it on Netflix'). But the shelf is packed with competitors whose pockets are just as deep, so the moat protects without being impregnable.
Revenue history
From $31.6B to $51.2B in 4 years. The business grows steadily.
Where each $100 of sales goes
Revenue $45.2B · FY2025
Of every $100 in sales, $76 goes to costs and operations; $24 is left as net profit (24% margin).
Catalysts and risks
2026 guidance: revenue +12-14% and operating margin 31.5%.
Ad revenue doubles to more than $3B in 2026.
Warner Bros. Discovery acquisition canceled Feb-2026: collects $2.8B breakup fee and resumes share buybacks.
No real monopoly: Disney+, Amazon Prime Video, and HBO Max fight for the same screen time.
48% gross margin gives away that producing content is expensive, far from a software margin.
Growth cools as big markets saturate and subscription prices climb.
Charlie's note
“Paying less than 17 times free cash flow for a business that compounds at 15% and widens margins is no joke. The moat isn't a castle, but the cash register rings every month.”
Analysis · July 2026
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