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NFLX · Forward model · APAC · Bull case

What has to happen in APAC

Model as of

This page changes APAC 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 $87.23 all other verticals held in this portfolio case
Final-quarter revenue $2.64B 13% of company revenue
Explicit segment contribution $11.84B EBITDA less segment capex, before corporate items

The story is margin, not acceleration. Q3 is guided to a 33.2% operating margin against 28.2% a year earlier - roughly 500bp of expansion - and the full year to 31.5% against 29.5%, which management says implies 20%+ operating income growth. Content amortisation is guided to rise about 10%, well below revenue, and Sarandos frames that as deliberate discipline rather than underinvestment. What this case does NOT reach is a return to mid-teens revenue growth, and it does not assume the record buyback re-rates the multiple by itself.

APAC

Basis quarter$1.51B
Final quarter$2.64B
Implied CAGR+12%
Final revenue mix13%

Asia-Pacific. $1,510M in the basis quarter, +16% year over year reported and +18% F/X neutral - the only region where the currency effect runs against the print. Sequentially flat in Q2 at +0.1% after four strong quarters, with Japanese and Korean title strength and a low-cost first-month test in Japan the visible levers. The least penetrated of the four regions, so it carries the highest terminal rate. Driver is sequential growth on the disclosed regional line.

Last four quarters
2025 Q3 $1.37B Reported
2025 Q4 $1.42B Reported
2026 Q1 $1.51B Reported
2026 Q2 $1.51B Reported
Memberships across Asia-Pacific marketsAdvertising in the ads-enabled APAC marketsMobile and low-price plan tiers
Sequential growth +3.2%/qtr decaying toward +1.5% Treats the flat Q2 as timing: F/X-neutral growth of 18% was the highest of the four regions.
APAC

Latest: $2.64B (2031Q2E)

Period Value
2024Q2 $1.05B
2024Q3 $1.13B
2024Q4 $1.21B
2025Q1 $1.26B
2025Q2 $1.30B
2025Q3 $1.37B
2025Q4 $1.42B
2026Q1 $1.51B
2026Q2 $1.51B
2026Q3E $1.56B
2026Q4E $1.62B
2027Q1E $1.67B
2027Q2E $1.73B
2027Q3E $1.78B
2027Q4E $1.84B
2028Q1E $1.89B
2028Q2E $1.94B
2028Q3E $2.00B
2028Q4E $2.05B
2029Q1E $2.11B
2029Q2E $2.16B
2029Q3E $2.22B
2029Q4E $2.28B
2030Q1E $2.34B
2030Q2E $2.39B
2030Q3E $2.45B
2030Q4E $2.51B
2031Q1E $2.57B
2031Q2E $2.64B

Assumptions & reasoning

  • Capex intensity means purchases of property and equipment plus cash content spend in EXCESS of content amortisation. Content amortisation remains an operating expense here, as Netflix reports it, and is not double counted as capital spending.
  • Terminal margin is two points under the company terminal on the grounds that this is the lowest-ARM region. No regional margin is disclosed, so the haircut is deliberately small and flagged as judgement.
  • This is the only region where F/X-neutral growth (+18%) exceeds reported growth (+16%), the reverse of LATAM. A stronger dollar would flatter this line's underlying performance rather than the print.
  • Netflix stopped publishing quarterly paid memberships and ARM after 2024 Q4 and cut the What We Watched engagement report to annual from 2027, so neither subscribers nor view hours can drive this line.
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