NFLX · Forward model · Ads flywheel case

The Ads flywheel case, 20 quarters out

Model as of 2026-08-27

Each segment is projected from its own operating driver, rolled up into consolidated cash flow, and discounted back to a fair value per share. The assumptions below are editable — change them and every number on this page moves with them.

Netflix reports ONE operating segment and FOUR regional revenue lines: UCAN, EMEA, LATAM and APAC. This model carries exactly those four. Every historical point is copied as reported - 2024 Q2 through 2025 Q2 from the Q2 2025 Exhibit 99.1, 2025 Q3 through 2026 Q2 from the Q2 2026 Exhibit 99.1 - and no quarter is estimated. The four lines sum to consolidated revenue within $1M of letter rounding in all nine quarters, so there is no plug line. What is deliberately NOT modelled: advertising, guided to approximately $3B for 2026 but never disclosed as a revenue line, by region or by quarter, and already inside these four numbers - a separate ads vertical would double count; any subscribers x ARPU decomposition, because Netflix stopped publishing quarterly paid memberships and ARM after 2024 Q4; and any regional profitability split, because no cost, operating income or content spend is disclosed by region. Segment EBITDA here is pre-corporate-overhead: 38.2% vertical margin less 4.0% overhead is the consolidated 34.2%, which is the reported 33.4% operating margin plus $100.5M of property D&A. Capex intensity of 6.6% is purchases of property and equipment (1.7% of revenue) PLUS cash content spend in excess of content amortisation ($4,928M less $4,311M); content amortisation itself stays inside operating expense exactly as Netflix reports it and is not subtracted twice. Tax 16.4% is Q2's effective rate - Q1's 19.3% is distorted by the WBD fee. 2026 Q1 EPS of $1.23 and net income of $5,283M contain that $2.8B termination fee and are not a run rate; the merger was terminated on 27 February 2026, so there is no acquired revenue or library to model. Shares are held flat at the 4,261.3M diluted count even though the buyback removed about 2.0% of the count year over year and $27.1B of authorisation remains - Netflix gives no share-count guidance, so per-share outcomes here are conservative. One known tension: flat per-region sequential rates land FY2026 at about $50.84B, roughly 0.3% under the low end of the guided $51.0-$51.4B, because the guidance midpoint implies a Q4 sequential step of about +5% that a constant rate does not reproduce; Q3 alone lands at $12,867M against the $12,860M guide. netCash is cash $9,099M plus short-term investments $29M less short-term debt $2,484M less long-term debt $11,826M, i.e. net debt of $5.18B. Reference price is the 2026-08-24 close from the house capture; the local profile price of $72.88 is stale.

Where each case comes from

From cash flow to fair value

The projected path

The published model's 20 quarters. The horizon and sliders above do not change this table.

Every row is projected. A year-over-year change is shown only where the quarter it compares against exists — an em dash means there is no comparable quarter, not a flat year.

Model revisions

Assumptions are marked to reality as each quarter prints. Every change is appended here, with the fair value the model produced at the time, so the model's own history stays visible.