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NFLX · Forward model · LATAM · Bull 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 $87.23 all other verticals held in this portfolio case
Final-quarter revenue $2.62B 13% of company revenue
Explicit segment contribution $12.07B 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.

LATAM

Basis quarter$1.58B
Final quarter$2.62B
Implied CAGR+11%
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: $2.62B (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 $1.64B
2026Q4E $1.69B
2027Q1E $1.74B
2027Q2E $1.80B
2027Q3E $1.85B
2027Q4E $1.90B
2028Q1E $1.95B
2028Q2E $2.00B
2028Q3E $2.05B
2028Q4E $2.10B
2029Q1E $2.15B
2029Q2E $2.20B
2029Q3E $2.25B
2029Q4E $2.30B
2030Q1E $2.35B
2030Q2E $2.40B
2030Q3E $2.46B
2030Q4E $2.51B
2031Q1E $2.56B
2031Q2E $2.62B

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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