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NFLX · Forward model · LATAM · Bear case

What has to happen in LATAM

Model as of

This page changes LATAM 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 $44.55 all other verticals held in this portfolio case
Final-quarter revenue $1.97B 13% of company revenue
Explicit segment contribution $8.75B EBITDA less segment capex, before corporate items

Growth decelerates faster than price can offset. Reported growth has fallen from +17.6% in Q4 2025 to +16.2% in Q1 2026 to +13.4% in Q2, with Q3 guided to +11.7%, and UCAN - 43% of revenue - is already at +10%. This case assumes the price lever gets harder each cycle and that the FY2026 exit rate is the ceiling rather than a trough, with margin expansion stalling short of the guided glide. What it does NOT assume is a revenue decline, a margin reversal, or falling engagement: view hours grew about 2% in H1 2026 against 1.5% in 2025.

LATAM

Basis quarter$1.58B
Final quarter$1.97B
Implied CAGR+4%
Final revenue mix13%

Latin America. $1,584M in the basis quarter, +21% year over year reported and +16% F/X neutral - the fastest reported grower and the strongest sequential step at +5.8%. Currency has flipped from a heavy headwind (2024 Q2: +12% reported revenue against +24% F/X-neutral ARM growth, the only constant-currency figure Netflix disclosed for the region) to a tailwind, which is the single largest reason to treat the printed rate as unrepeatable. Driver is sequential growth on the disclosed regional line.

Last four quarters
2025 Q3 $1.37B Reported
2025 Q4 $1.42B Reported
2026 Q1 $1.50B Reported
2026 Q2 $1.58B Reported
Memberships across Latin American marketsAdvertising in the ads-enabled LATAM marketsExtra member and mobile-tier plans
Sequential growth +3.0%/qtr decaying toward +1.3% Below the +5.8% print because roughly five points of the 21% year-over-year is currency, not volume or price.
LATAM

Latest: $1.97B (2031Q2E)

Period Value
2024Q2 $1.20B
2024Q3 $1.24B
2024Q4 $1.23B
2025Q1 $1.26B
2025Q2 $1.31B
2025Q3 $1.37B
2025Q4 $1.42B
2026Q1 $1.50B
2026Q2 $1.58B
2026Q3E $1.62B
2026Q4E $1.66B
2027Q1E $1.69B
2027Q2E $1.72B
2027Q3E $1.74B
2027Q4E $1.77B
2028Q1E $1.79B
2028Q2E $1.81B
2028Q3E $1.83B
2028Q4E $1.85B
2029Q1E $1.86B
2029Q2E $1.88B
2029Q3E $1.89B
2029Q4E $1.91B
2030Q1E $1.92B
2030Q2E $1.93B
2030Q3E $1.94B
2030Q4E $1.95B
2031Q1E $1.96B
2031Q2E $1.97B

Assumptions & reasoning

  • Capex intensity means purchases of property and equipment plus cash content spend in EXCESS of content amortisation, which was $4,928M against $4,311M of amortisation in Q2 - a 1.14x ratio against the ~1.1x full-year guide.
  • Terminal margin sits two points under the company terminal because this is the lowest-price region. That two-point haircut is judgement, not disclosure: Netflix publishes no operating profit by region at all.
  • The currency effect here reversed direction inside two years: 2024 Q2 printed +12% reported revenue against +24% F/X-neutral ARM growth, 2026 Q2 prints +21% reported against +16% F/X neutral. Currency is doing work in both directions.
  • Advertising in the ads-enabled LATAM markets is inside this number and is not separable. The only published ads figure is a company-wide approximately $3B for 2026.
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