← NFLX forward model

NFLX · Forward model · UCAN · Ads flywheel case

What has to happen in UCAN

Model as of

This page changes UCAN inside the complete NFLX model. Every other vertical, corporate programme and valuation assumption stays in the selected portfolio case.

NFLX forward model
Horizon
Consolidated fair value $78.12 all other verticals held in this portfolio case
Final-quarter revenue $8.07B 42% of company revenue
Explicit segment contribution $38.11B EBITDA less segment capex, before corporate items

Advertising roughly doubles to approximately $3B in 2026 and keeps closing the gap between ad-tier and standard-tier revenue per member, a gap Greg Peters calls near-term underrealized revenue growth. This case pays for that as the four regional lines holding a faster sequential rate for longer, with a small extra tilt to UCAN where the US upfront sits. It explicitly does NOT create an advertising vertical, invent an ads ARM series, or assume a 2027 ads number: Netflix has published neither an ads revenue line nor a 2027 target, and it does not reach the bull case's margin.

UCAN

Basis quarter$5.43B
Final quarter$8.07B
Implied CAGR+8%
Final revenue mix42%

United States and Canada. $5,432M in the basis quarter, 43% of company revenue, +10% year over year - the slowest print in the nine-quarter history. The most penetrated region and the one where price, not membership count, is now the lever: the letter says Q2 carries only a partial-quarter effect from the recent US price change, so H2 still has pricing to collect. With no quarterly membership or ARM series after 2024 Q4, the driver is sequential growth on the disclosed regional line.

Last four quarters
2025 Q3 $5.07B Reported
2025 Q4 $5.34B Reported
2026 Q1 $5.25B Reported
2026 Q2 $5.43B Reported
Standard, standard-with-ads and premium membershipsAdvertising sold against the ads planExtra member add-ons
Sequential growth +2.1%/qtr decaying toward +1.0% Q2/Q1 was +3.6% on a price change. 2.1% is the slower step that lands the four regions on the $12.86B Q3 guide.
UCAN

Latest: $8.07B (2031Q2E)

Period Value
2024Q2 $4.30B
2024Q3 $4.32B
2024Q4 $4.52B
2025Q1 $4.62B
2025Q2 $4.93B
2025Q3 $5.07B
2025Q4 $5.34B
2026Q1 $5.25B
2026Q2 $5.43B
2026Q3E $5.57B
2026Q4E $5.70B
2027Q1E $5.84B
2027Q2E $5.97B
2027Q3E $6.10B
2027Q4E $6.23B
2028Q1E $6.36B
2028Q2E $6.49B
2028Q3E $6.62B
2028Q4E $6.75B
2029Q1E $6.88B
2029Q2E $7.01B
2029Q3E $7.14B
2029Q4E $7.27B
2030Q1E $7.40B
2030Q2E $7.53B
2030Q3E $7.67B
2030Q4E $7.80B
2031Q1E $7.94B
2031Q2E $8.07B

Assumptions & reasoning

  • Capex intensity means purchases of property and equipment plus cash content spend in EXCESS of content amortisation. Content amortisation stays inside operating expense, exactly as Netflix reports it; subtracting it again as capex would double count the largest cost in the business.
  • EBITDA margin is pre-corporate-overhead. 38.2% here less 4.0% corporate overhead is the consolidated 34.2%, which is the reported 33.4% operating margin plus property D&A of $100.5M. Netflix discloses no operating profit by region, so this is the company figure applied to the region.
  • Advertising is guided to roughly $3B for 2026 and is already inside this number. It is not broken out here because Netflix discloses no ads revenue line, no regional ads split and no quarterly ads series.
  • Terminal margin 41% is the company terminal, carried by the most mature region. Management moved full-year margin from 29.5% to a guided 31.5%; the 0.08 glide keeps roughly that 200bp-a-year pace and then slows.
NFLX model map

Explore another vertical