Document_And_Entity_Informatio
Document And Entity Information | 9 Months Ended |
Sep. 30, 2014 | |
Document And Entity Information [Abstract] | ' |
Entity Registrant Name | 'NETFLIX INC |
Entity Central Index Key | '0001065280 |
Current Fiscal Year End Date | '--12-31 |
Entity Filer Category | 'Large Accelerated Filer |
Document Type | '10-Q |
Document Period End Date | 30-Sep-14 |
Document Fiscal Year Focus | '2014 |
Document Fiscal Period Focus | 'Q3 |
Amendment Flag | 'false |
Entity Common Stock, Shares Outstanding | 60,246,379 |
Consolidated_Statements_Of_Ope
Consolidated Statements Of Operations (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, except Per Share data, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 |
Income Statement [Abstract] | ' | ' | ' | ' |
Revenues | $1,409,432 | $1,105,999 | $4,019,928 | $3,199,332 |
Cost of revenues | 954,394 | 798,900 | 2,738,428 | 2,296,526 |
Marketing | 145,654 | 108,228 | 403,515 | 341,925 |
Technology and development | 120,953 | 95,540 | 346,445 | 280,641 |
General and administrative | 78,024 | 46,211 | 193,938 | 134,181 |
Operating income | 110,407 | 57,120 | 337,602 | 146,059 |
Other income (expense): | ' | ' | ' | ' |
Interest expense | -13,486 | -7,436 | -36,866 | -21,704 |
Interest and other income (expense) | 616 | -193 | 3,117 | -2,156 |
Loss on extinguishment of debt | 0 | 0 | 0 | -25,129 |
Income before income taxes | 97,537 | 49,491 | 303,853 | 97,070 |
Provision for income taxes | 38,242 | 17,669 | 120,425 | 33,088 |
Net income | $59,295 | $31,822 | $183,428 | $63,982 |
Earnings per share: | ' | ' | ' | ' |
Basic (in dollars per share) | $0.99 | $0.54 | $3.06 | $1.11 |
Diluted (in dollars per share) | $0.96 | $0.52 | $2.97 | $1.06 |
Weighted-average common shares outstanding: | ' | ' | ' | ' |
Basic (in shares) | 60,171 | 59,108 | 59,996 | 57,769 |
Diluted (in shares) | 61,820 | 60,990 | 61,669 | 60,578 |
Consolidated_Statements_of_Com
Consolidated Statements of Comprehensive Income (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 |
Statement of Comprehensive Income [Abstract] | ' | ' | ' | ' |
Net income | $59,295 | $31,822 | $183,428 | $63,982 |
Other comprehensive income (loss): | ' | ' | ' | ' |
Foreign currency translation adjustments | -4,354 | 2,409 | -1,975 | 150 |
Change in unrealized gains (losses) on available-for-sale securities, net of tax of $(313), $515, $28, and $(936), respectively | -503 | 825 | 45 | -1,499 |
Total other comprehensive income (loss) | -4,857 | 3,234 | -1,930 | -1,349 |
Comprehensive income | $54,438 | $35,056 | $181,498 | $62,633 |
Consolidated_Statements_of_Com1
Consolidated Statements of Comprehensive Income (Parenthetical) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 |
Statement of Comprehensive Income [Abstract] | ' | ' | ' | ' |
Change in unrealized gains (losses) on available for sale securities, tax | ($313) | $515 | $28 | ($936) |
Consolidated_Statements_Of_Cas
Consolidated Statements Of Cash Flows (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 |
Cash flows from operating activities: | ' | ' | ' | ' |
Net income | $59,295 | $31,822 | $183,428 | $63,982 |
Adjustments to reconcile net income to net cash (used in) provided by operating activities: | ' | ' | ' | ' |
Additions to streaming content library | -1,202,484 | -878,314 | -2,765,197 | -2,063,709 |
Change in streaming content liabilities | 346,752 | 310,191 | 467,355 | 327,175 |
Amortization of streaming content library | 686,154 | 553,394 | 1,925,926 | 1,549,384 |
Amortization of DVD content library | 18,269 | 17,546 | 51,313 | 53,492 |
Depreciation and amortization of property, equipment and intangibles | 14,357 | 11,452 | 39,716 | 35,529 |
Stock-based compensation expense | 29,878 | 18,477 | 84,988 | 54,178 |
Excess tax benefits from stock-based compensation | -21,060 | -20,492 | -68,420 | -52,475 |
Other non-cash items | 3,360 | 1,994 | 8,807 | 4,932 |
Loss on extinguishment of debt | 0 | 0 | 0 | 25,129 |
Deferred taxes | -7,892 | -2,424 | -37,564 | -11,212 |
Changes in operating assets and liabilities: | ' | ' | ' | ' |
Other current assets | 12,960 | 9,920 | 27,341 | 37,955 |
Accounts payable | 13,003 | -5,877 | 32,729 | 6,004 |
Accrued expenses | -6,980 | -11,451 | 51,586 | -5,089 |
Deferred revenue | 11,626 | 9,252 | 37,189 | 26,351 |
Other non-current assets and liabilities | 5,323 | -10,797 | 15,747 | 4,760 |
Net cash (used in) provided by operating activities | -37,439 | 34,693 | 54,944 | 56,386 |
Cash flows from investing activities: | ' | ' | ' | ' |
Acquisition of DVD content library | -15,530 | -15,471 | -51,425 | -50,687 |
Purchases of property and equipment | -21,032 | -10,828 | -54,235 | -31,034 |
Other assets | 341 | -1,329 | 1,765 | 3,808 |
Purchases of short-term investments | -123,883 | -116,116 | -355,337 | -497,789 |
Proceeds from sale of short-term investments | 107,568 | 81,185 | 340,278 | 196,392 |
Proceeds from maturities of short-term investments | 32,125 | 48,890 | 127,229 | 58,720 |
Net cash (used in) provided by investing activities | -20,411 | -13,669 | 8,275 | -320,590 |
Cash flows from financing activities: | ' | ' | ' | ' |
Proceeds from issuance of common stock | 9,877 | 25,561 | 56,794 | 93,553 |
Proceeds from issuance of debt | 0 | 0 | 400,000 | 500,000 |
Issuance costs | 0 | 0 | -7,080 | -9,414 |
Redemption of debt | 0 | 0 | 0 | -219,362 |
Excess tax benefits from stock-based compensation | 21,060 | 20,492 | 68,420 | 52,475 |
Principal payments of lease financing obligations | -275 | -258 | -813 | -916 |
Net cash provided by financing activities | 30,662 | 45,795 | 517,321 | 416,336 |
Effect of exchange rate changes on cash and cash equivalents | -3,839 | 1,559 | -2,288 | -3,367 |
Net (decrease) increase in cash and cash equivalents | -31,027 | 68,378 | 578,252 | 148,765 |
Cash and cash equivalents, beginning of period | 1,214,244 | 370,678 | 604,965 | 290,291 |
Cash and cash equivalents, end of period | $1,183,217 | $439,056 | $1,183,217 | $439,056 |
Consolidated_Balance_Sheets
Consolidated Balance Sheets (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Current assets: | ' | ' |
Cash and cash equivalents | $1,183,217 | $604,965 |
Short-term investments | 483,602 | 595,440 |
Current content library, net | 2,006,981 | 1,706,421 |
Other current assets | 149,682 | 151,937 |
Total current assets | 3,823,482 | 3,058,763 |
Non-current content library, net | 2,631,882 | 2,091,071 |
Property and equipment, net | 144,147 | 133,605 |
Other non-current assets | 178,818 | 129,124 |
Total assets | 6,778,329 | 5,412,563 |
Current liabilities: | ' | ' |
Current content liabilities | 2,074,766 | 1,775,983 |
Accounts payable | 150,374 | 108,435 |
Accrued expenses | 70,559 | 54,018 |
Deferred revenue | 252,956 | 215,767 |
Total current liabilities | 2,548,655 | 2,154,203 |
Non-current content liabilities | 1,510,403 | 1,345,590 |
Long-term debt | 900,000 | 500,000 |
Other non-current liabilities | 94,397 | 79,209 |
Total liabilities | 5,053,455 | 4,079,002 |
Commitments and contingencies (Note 10) | ' | ' |
Stockholders’ equity: | ' | ' |
Common stock, $0.001 par value; 160,000,000 shares authorized at September 30, 2014 and December 31, 2013; 60,246,379 and 59,607,001 issued and outstanding at September 30, 2014 and December 31, 2013, respectively | 60 | 60 |
Additional paid-in capital | 987,256 | 777,441 |
Accumulated other comprehensive income | 1,645 | 3,575 |
Retained earnings | 735,913 | 552,485 |
Total stockholders’ equity | 1,724,874 | 1,333,561 |
Total liabilities and stockholders’ equity | $6,778,329 | $5,412,563 |
Consolidated_Balance_Sheets_Pa
Consolidated Balance Sheets (Parenthetical) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
Statement of Financial Position [Abstract] | ' | ' |
Common stock, par value | $0.00 | $0.00 |
Common stock, shares authorized | 160,000,000 | 160,000,000 |
Common stock, shares issued | 60,246,379 | 59,607,001 |
Common stock, shares outstanding | 60,246,379 | 59,607,001 |
Basis_of_Presentation_and_Summ
Basis of Presentation and Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2014 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ' |
Basis of Presentation and Summary of Significant Accounting Policies | ' |
Basis of Presentation and Summary of Significant Accounting Policies | |
The accompanying consolidated interim financial statements of Netflix, Inc. and its wholly owned subsidiaries (the “Company”) have been prepared in conformity with accounting principles generally accepted in the United States (“U.S.”) and are consistent in all material respects with those applied in the Company’s Annual Report on Form 10-K for the year ended December 31, 2013 filed with the Securities and Exchange Commission (the “SEC”) on February 3, 2014. The preparation of consolidated financial statements in conformity with U.S. generally accepted accounting principles (“GAAP”) requires management to make estimates and judgments that affect the amounts reported in the consolidated financial statements and accompanying notes. Significant items subject to such estimates and assumptions include the amortization policy for the streaming content library; the recognition and measurement of income tax assets and liabilities; and the valuation of stock-based compensation. The Company bases its estimates on historical experience and on various other assumptions that the Company believes to be reasonable under the circumstances. On a regular basis, the Company evaluates the assumptions, judgments and estimates. Actual results may differ from these estimates. | |
The interim financial information is unaudited, but reflects all normal recurring adjustments that are, in the opinion of management, necessary to fairly present the information set forth herein. The interim financial statements should be read in conjunction with the audited financial statements and related notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2013. Interim results are not necessarily indicative of the results for a full year. | |
The Company is organized into three operating segments: Domestic streaming, International streaming and Domestic DVD. A majority of the Company’s revenues are generated in the United States, and substantially all of the Company’s long-lived tangible assets are held in the United States. The Company’s revenues are derived from monthly membership fees. | |
There have been no material changes in the Company’s significant accounting policies as compared to the significant accounting policies described in the Company’s Annual Report on Form 10-K for the year ended December 31, 2013. | |
In May 2014, the Financial Accounting Standards Board issued Accounting Standards Update ("ASU") 2014-09, Revenue from Contracts with Customers (Topic 606) which amended the existing accounting standards for revenue recognition. ASU 2014-09 establishes principles for recognizing revenue upon the transfer of promised goods or services to customers, in an amount that reflects the expected consideration received in exchange for those goods or services. It is effective for annual reporting periods beginning after December 15, 2016. Early adoption is not permitted. The amendments may be applied retrospectively to each prior period presented or retrospectively with the cumulative effect recognized as of the date of initial application. The Company is currently in the process of evaluating the impact of adoption of the ASU on its consolidated financial statements, but does not expect the impact to be material. |
Reclassifications
Reclassifications | 9 Months Ended |
Sep. 30, 2014 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ' |
Reclassifications | ' |
Reclassifications | |
Certain prior year amounts have been reclassified to conform to the current year presentation in the consolidated financial statements. | |
Costs of revenues in the amount of $7.9 million and $25.1 million for the three and nine months ended September 30, 2013, respectively, related to free-trial periods that were previously allocated to “Marketing” on the Consolidated Statements of Operations have been reallocated to “Cost of revenues”. There was no impact in any period presented to contribution profit or net income or to the Consolidated Balance Sheets or Consolidated Statements of Cash Flows. |
Earnings_Per_Share
Earnings Per Share | 9 Months Ended | |||||||||||||||
Sep. 30, 2014 | ||||||||||||||||
Earnings Per Share [Abstract] | ' | |||||||||||||||
Earnings Per Share | ' | |||||||||||||||
Earnings Per Share | ||||||||||||||||
Basic earnings per share is computed using the weighted-average number of outstanding shares of common stock during the period. Diluted earnings per share is computed using the weighted-average number of outstanding shares of common stock and, when dilutive, potential common shares outstanding during the period. Potential common shares consist of shares issuable upon the assumed conversion of the Company’s Senior Convertible Notes (prior to the conversion of such notes in April 2013) and incremental shares issuable upon the assumed exercise of stock options. The computation of earnings per share is as follows: | ||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||
September 30, | September 30, | September 30, | September 30, | |||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||
(in thousands, except per share data) | ||||||||||||||||
Basic earnings per share: | ||||||||||||||||
Net income | $ | 59,295 | $ | 31,822 | $ | 183,428 | $ | 63,982 | ||||||||
Shares used in computation: | ||||||||||||||||
Weighted-average common shares outstanding | 60,171 | 59,108 | 59,996 | 57,769 | ||||||||||||
Basic earnings per share | $ | 0.99 | $ | 0.54 | $ | 3.06 | $ | 1.11 | ||||||||
Diluted earnings per share: | ||||||||||||||||
Net income | $ | 59,295 | $ | 31,822 | $ | 183,428 | $ | 63,982 | ||||||||
Senior Convertible Notes interest expense, net of tax | — | — | — | 49 | ||||||||||||
Numerator for diluted earnings per share | $ | 59,295 | $ | 31,822 | $ | 183,428 | $ | 64,031 | ||||||||
Shares used in computation: | ||||||||||||||||
Weighted-average common shares outstanding | 60,171 | 59,108 | 59,996 | 57,769 | ||||||||||||
Senior Convertible Notes shares | — | — | — | 956 | ||||||||||||
Employee stock options | 1,649 | 1,882 | 1,673 | 1,853 | ||||||||||||
Weighted-average number of shares | 61,820 | 60,990 | 61,669 | 60,578 | ||||||||||||
Diluted earnings per share | $ | 0.96 | $ | 0.52 | $ | 2.97 | $ | 1.06 | ||||||||
Employee stock options with exercise prices greater than the average market price of the common stock were excluded from the diluted calculation as their inclusion would have been anti-dilutive. The following table summarizes the potential common shares excluded from the diluted calculation: | ||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||
September 30, | September 30, | September 30, | September 30, | |||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||
(in thousands) | ||||||||||||||||
Employee stock options | 53 | 12 | 64 | 260 | ||||||||||||
Shortterm_Investments
Short-term Investments | 9 Months Ended | |||||||||||||||
Sep. 30, 2014 | ||||||||||||||||
Short-Term Investments And Fair Value Measurement [Abstract] | ' | |||||||||||||||
Short-term Investments | ' | |||||||||||||||
Short-term Investments | ||||||||||||||||
The Company’s investment policy is consistent with the definition of available-for-sale securities. The Company does not buy and hold securities principally for the purpose of selling them in the near future. The Company’s policy is focused on the preservation of capital, liquidity and return. From time to time, the Company may sell certain securities but the objectives are generally not to generate profits on short-term differences in price. The following tables summarize, by major security type, the Company’s assets that are measured at fair value on a recurring basis and are categorized using the fair value hierarchy: | ||||||||||||||||
As of September 30, 2014 | ||||||||||||||||
Amortized | Gross | Gross | Estimated | |||||||||||||
Cost | Unrealized | Unrealized | Fair Value | |||||||||||||
Gains | Losses | |||||||||||||||
(in thousands) | ||||||||||||||||
Cash | $ | 1,065,988 | $ | — | $ | — | $ | 1,065,988 | ||||||||
Level 1 securities: | ||||||||||||||||
Money market funds | 122,936 | — | — | 122,936 | ||||||||||||
Level 2 securities: | ||||||||||||||||
Corporate debt securities | 292,410 | 718 | (99 | ) | 293,029 | |||||||||||
Government securities | 166,991 | 169 | (53 | ) | 167,107 | |||||||||||
Asset-backed securities | 370 | — | — | 370 | ||||||||||||
Certificate of deposits and commercial paper | 6,605 | — | — | 6,605 | ||||||||||||
Agency securities | 16,483 | 8 | — | 16,491 | ||||||||||||
Total (1) | $ | 1,671,783 | $ | 895 | $ | (152 | ) | $ | 1,672,526 | |||||||
As of December 31, 2013 | ||||||||||||||||
Amortized | Gross | Gross | Estimated | |||||||||||||
Cost | Unrealized | Unrealized | Fair Value | |||||||||||||
Gains | Losses | |||||||||||||||
(in thousands) | ||||||||||||||||
Cash | $ | 483,959 | $ | — | $ | — | $ | 483,959 | ||||||||
Level 1 securities: | ||||||||||||||||
Money market funds | 126,208 | — | — | 126,208 | ||||||||||||
Level 2 securities: | ||||||||||||||||
Corporate debt securities | 316,465 | 1,245 | (654 | ) | 317,056 | |||||||||||
Government securities | 143,812 | 287 | (18 | ) | 144,081 | |||||||||||
Asset and mortgage-backed securities | 93,118 | 229 | (418 | ) | 92,929 | |||||||||||
Certificate of deposits | 23,425 | — | — | 23,425 | ||||||||||||
Agency securities | 17,951 | — | (2 | ) | 17,949 | |||||||||||
Total (2) | $ | 1,204,938 | $ | 1,761 | $ | (1,092 | ) | $ | 1,205,607 | |||||||
-1 | Includes $1,183.2 million that is included in cash and cash equivalents, $483.6 million included in short-term investments and $5.7 million of restricted cash that is included in other non-current assets related primarily to workers compensation deposits. | |||||||||||||||
-2 | Includes $605.0 million that is included in cash and cash equivalents, $595.4 million included in short-term investments and $5.2 million of restricted cash that is included in other non-current assets related to workers compensation deposits. | |||||||||||||||
Fair value is a market-based measurement that is determined based on the assumptions that market participants would use in pricing an asset or liability. The hierarchy level assigned to each security in the Company’s available-for-sale portfolio and cash equivalents is based on its assessment of the transparency and reliability of the inputs used in the valuation of such instrument at the measurement date. The fair value of available-for-sale securities and cash equivalents included in the Level 1 category is based on quoted prices that are readily and regularly available in an active market. The fair value of available-for-sale securities included in the Level 2 category is based on observable inputs, such as quoted prices for similar assets at the measurement date; quoted prices in markets that are not active; or other inputs that are observable, either directly or indirectly. These values were obtained from an independent pricing service and were evaluated using pricing models that vary by asset class and may incorporate available trade, bid and other market information and price quotes from well-established independent pricing vendors and broker-dealers. The Company's procedures include controls to ensure that appropriate fair values are recorded, such as comparing prices obtained from multiple independent sources. See Note 6 to the consolidated financial statements for further information regarding the fair value of the Company’s debt instruments. | ||||||||||||||||
There were no investments in a material unrealized loss position as of September 30, 2014 or December 31, 2013. There were no material other-than-temporary impairments or credit losses related to available-for-sale securities in the three and nine months ended September 30, 2014 and 2013. In addition, there were no material gross realized gains or losses in the three and nine months ended September 30, 2014 and 2013. | ||||||||||||||||
The estimated fair value of short-term investments by contractual maturity as of September 30, 2014 is as follows: | ||||||||||||||||
(in thousands) | ||||||||||||||||
Due within one year | $ | 112,361 | ||||||||||||||
Due after one year and through 5 years | 371,241 | |||||||||||||||
Total short-term investments | $ | 483,602 | ||||||||||||||
Balance_Sheet_Components
Balance Sheet Components | 9 Months Ended | |||||||||
Sep. 30, 2014 | ||||||||||
Balance Sheet Components Disclosure [Abstract] | ' | |||||||||
Balance Sheet Components | ' | |||||||||
Balance Sheet Components | ||||||||||
Content Library | ||||||||||
Content library consisted of the following: | ||||||||||
As of | ||||||||||
September 30, | December 31, | |||||||||
2014 | 2013 | |||||||||
(in thousands) | ||||||||||
Total content library, gross | $ | 8,013,370 | $ | 6,474,688 | ||||||
Accumulated amortization | (3,374,507 | ) | (2,677,196 | ) | ||||||
Total content library, net | 4,638,863 | 3,797,492 | ||||||||
Current content library, net | 2,006,981 | 1,706,421 | ||||||||
Non-current content library, net | $ | 2,631,882 | $ | 2,091,071 | ||||||
Property and Equipment, Net | ||||||||||
Property and equipment and accumulated depreciation consisted of the following: | ||||||||||
As of | ||||||||||
September 30, | December 31, | |||||||||
2014 | 2013 | |||||||||
(in thousands) | ||||||||||
Computer equipment | 3 years | $ | 138,814 | $ | 102,867 | |||||
Operations and other equipment | 5 years | 89,144 | 96,361 | |||||||
Software | 3 years | 36,933 | 36,439 | |||||||
Furniture and fixtures | 3 years | 25,008 | 21,011 | |||||||
Building | 30 years | 40,681 | 40,681 | |||||||
Leasehold improvements | Over life of lease | 55,160 | 51,194 | |||||||
Capital work-in-progress | 10,814 | 8,643 | ||||||||
Property and equipment, gross | 396,554 | 357,196 | ||||||||
Less: Accumulated depreciation | (252,407 | ) | (223,591 | ) | ||||||
Property and equipment, net | $ | 144,147 | $ | 133,605 | ||||||
Longterm_Debt
Long-term Debt | 9 Months Ended |
Sep. 30, 2014 | |
Debt Disclosure [Abstract] | ' |
Long-term Debt | ' |
Long-term Debt | |
Senior Convertible Notes | |
In November 2011, the Company issued $200.0 million aggregate principal amount of zero coupon Senior Convertible Notes due on December 1, 2018 (the “Convertible Notes”) in a private placement offering to TCV VII, L.P., TCV VII(A), L.P. and TCV Member Fund, L.P. A general partner of these funds also serves on the Company’s Board of Directors, and as such, the issuance of the notes was considered a related party transaction. At any time following May 28, 2012, the Company could have elected to cause the conversion of the Convertible Notes into shares of the Company’s common stock when specified conditions were satisfied, including that the daily volume weighted-average price of the Company’s common stock was equal to or greater than $111.54 for at least 50 trading days during a 65 trading day period prior to the conversion date. | |
In April 2013, after all specified conditions were satisfied, the Company elected to cause the conversion of all outstanding Convertible Notes with an aggregate principal amount of $200.0 million in accordance with the terms of the Indenture governing such notes. Pursuant to this conversion, the Company issued 2.3 million shares of common stock to the holders of the Convertible Notes at a conversion ratio of 11.6553. The fair market value of one share of common stock on the date of conversion was $216.99 per share. | |
5.375% Senior Notes | |
In February 2013, the Company issued $500.0 million aggregate principal amount of 5.375% Senior Notes due 2021 (the "5.375% Notes"). The 5.375% Notes were issued at par and are senior unsecured obligations of the Company. Interest is payable semi-annually at a rate of 5.375% per annum on February 1 and August 1 of each year, commencing on August 1, 2013. The 5.375% Notes are repayable in whole or in part upon the occurrence of a change of control, at the option of the holders, at a purchase price in cash equal to 101% of the principal plus accrued interest. The Company may redeem the 5.375% Notes prior to maturity in whole or in part at an amount equal to the principal amount thereof plus accrued and unpaid interest plus a make-whole payment equivalent to the present value of the remaining interest payments through maturity. | |
The 5.375% Notes include, among other terms and conditions, limitations on the Company's ability to create, incur or allow certain liens; enter into sale and lease-back transactions; create, assume, incur or guarantee additional indebtedness of the Company's subsidiaries; and consolidate or merge with, or convey, transfer or lease all or substantially all of the Company's and its subsidiaries assets, to another person. At September 30, 2014 and December 31, 2013, the Company was in compliance with these covenants. | |
In the first quarter of 2013, the Company used $224.5 million of the net proceeds of the 5.375% Notes to redeem the outstanding $200.0 million aggregate principal amount of 8.50% Senior Notes due 2017 (the “8.50% Notes”) and pursuant to the make-whole provision in the Indenture governing the 8.50% Notes, paid a $19.4 million premium and $5.1 million of accrued and unpaid interest. The Company recognized a loss on extinguishment of debt of $25.1 million related to redemption of the 8.50% Notes which included the write off of unamortized debt issuance costs of $4.2 million. | |
Based on quoted market prices in less active markets (a Level 2 input for this financial instrument), the fair value of the 5.375% Notes as of September 30, 2014 and December 31, 2013 was $510.0 million and $506.3 million, respectively. | |
5.750% Senior Notes | |
In February 2014, the Company issued $400.0 million aggregate principal amount of 5.750% Senior Notes due 2024 (the "5.750% Notes"). The 5.750% Notes were issued at par and are senior unsecured obligations of the Company. Interest is payable semi-annually at a rate of 5.750% per annum on March 1 and September 1 of each year, commencing on September 1, 2014. The 5.750% Notes are repayable in whole or in part upon the occurrence of a change of control, at the option of the holders, at a purchase price in cash equal to 101% of the principal plus accrued interest. The Company may redeem the 5.750% Notes prior to maturity in whole or in part at an amount equal to the principal amount thereof plus accrued and unpaid interest plus a make-whole payment equivalent to the present value of the remaining interest payments through maturity. | |
The 5.750% Notes include, among other terms and conditions, limitations on the Company's ability to create, incur or allow certain liens; enter into sale and lease-back transactions; create, assume, incur or guarantee additional indebtedness of the Company's subsidiaries; and consolidate or merge with, or convey, transfer or lease all or substantially all of the Company's and its subsidiaries assets, to another person. At September 30, 2014, the Company was in compliance with these covenants. | |
Based on quoted market prices in less active markets (a Level 2 input for this financial instrument), the fair value of the 5.750% Notes as of September 30, 2014 was $412.0 million. |
Stockholders_Equity
Stockholders' Equity | 9 Months Ended | |||||||||||||||
Sep. 30, 2014 | ||||||||||||||||
Stockholders' Equity and Stock-based Compensation Disclosure [Abstract] | ' | |||||||||||||||
Stockholders' Equity | ' | |||||||||||||||
Stockholders’ Equity | ||||||||||||||||
Stock Option Plan | ||||||||||||||||
In June 2011, the Company adopted the 2011 Stock Plan. The 2011 Stock Plan provides for the grant of incentive stock options to employees and for the grant of non-statutory stock options, stock appreciation rights, restricted stock and restricted stock units to employees, directors and consultants. As of September 30, 2014, 3.0 million shares were reserved for future grants under the 2011 Stock Plan. | ||||||||||||||||
A summary of the activities related to the Company’s stock option plans is as follows: | ||||||||||||||||
Options Outstanding | ||||||||||||||||
Shares | Number of | Weighted- | Weighted-Average Remaining | Aggregate | ||||||||||||
Available | Shares | Average | Contractual Term | Intrinsic Value | ||||||||||||
for Grant | Exercise Price | (in Years) | (in Thousands) | |||||||||||||
Balances as of December 31, 2013 | 3,406,317 | 3,526,898 | $ | 95.25 | ||||||||||||
Granted | (391,239 | ) | 391,239 | 409.7 | ||||||||||||
Exercised | (639,378 | ) | 88.82 | |||||||||||||
Balances as of September 30, 2014 | 3,015,078 | 3,278,759 | 134.02 | 5.97 | $ | 1,041,797 | ||||||||||
Vested and exercisable at September 30, 2014 | 3,278,759 | 134.02 | 5.97 | $ | 1,041,797 | |||||||||||
The aggregate intrinsic value in the table above represents the total pre-tax intrinsic value (the difference between the Company’s closing stock price on the last trading day of the third quarter of 2014 and the exercise price, multiplied by the number of in-the-money options) that would have been received by the option holders had all option holders exercised their options on the last trading day of the third quarter of 2014. This amount changes based on the fair market value of the Company’s common stock. The total intrinsic value of options exercised for the three months ended September 30, 2014 and 2013 was $60.3 million and $64.5 million, respectively. The total intrinsic value of options exercised for the nine months ended September 30, 2014 and 2013 was $208.0 million and $182.8 million, respectively. | ||||||||||||||||
Cash received from option exercises for the three months ended September 30, 2014 and 2013 was $9.9 million and $25.6 million, respectively. Cash received from option exercises for the nine months ended September 30, 2014 and 2013 was $56.8 million and $93.6 million, respectively. | ||||||||||||||||
Stock-Based Compensation | ||||||||||||||||
The following table summarizes the assumptions used to value stock option grants using the lattice-binomial model: | ||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||
September 30, | September 30, | September 30, | September 30, | |||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||
Dividend yield | — | % | — | % | — | % | — | % | ||||||||
Expected volatility | 43 | % | 51 | % | 43% - 48% | 51% - 54% | ||||||||||
Risk-free interest rate | 2.52 | % | 2.55 | % | 2.52% - 2.83% | 1.87% - 2.55% | ||||||||||
Suboptimal exercise factor | 2.68 - 4.57 | 2.43 - 3.79 | 2.66 - 4.57 | 2.33 - 3.79 | ||||||||||||
The Company bifurcates its option grants into two employee groupings (executive and non-executive) and considers several factors, including the historical option exercise behavior, in determining the suboptimal exercise factor. | ||||||||||||||||
The weighted-average fair value of employee stock options granted during the three months ended September 30, 2014 and 2013 was $236.96 and $136.78 per share, respectively. The weighted-average fair value of employee stock options granted during the nine months ended September 30, 2014 and 2013 was $217.23 and $100.08 per share, respectively. | ||||||||||||||||
Stock-based compensation expense related to stock option plans was $29.9 million and $18.5 million for the three months ended September 30, 2014 and 2013, respectively. Stock-based compensation expense related to stock option plans was $85.0 million and $54.2 million for the nine months ended September 30, 2014 and 2013, respectively. The total income tax benefit recognized in the income statement related to stock option plans was $11.4 million and $7.1 million for the three months ended September 30, 2014 and 2013, respectively. The total income tax benefit recognized in the income statement related to stock option plans was $32.5 million and $20.8 million for the nine months ended September 30, 2014 and 2013, respectively. |
Accumulated_Other_Comprehensiv
Accumulated Other Comprehensive Income | 9 Months Ended | |||||||||||
Sep. 30, 2014 | ||||||||||||
Equity [Abstract] | ' | |||||||||||
Accumulated Other Comprehensive Income | ' | |||||||||||
Accumulated Other Comprehensive Income | ||||||||||||
The following tables summarize the changes in accumulated balances of other comprehensive income, net of tax, for the three and nine months ended September 30, 2014: | ||||||||||||
Foreign currency | Change in unrealized gains on available-for-sale securities | Total | ||||||||||
(in thousands) | ||||||||||||
Balance as of June 30, 2014 | $ | 5,532 | $ | 970 | $ | 6,502 | ||||||
Other comprehensive income before reclassifications | (4,354 | ) | (191 | ) | (4,545 | ) | ||||||
Amounts reclassified from accumulated other comprehensive income | — | (312 | ) | (312 | ) | |||||||
Net increase in other comprehensive income | (4,354 | ) | (503 | ) | (4,857 | ) | ||||||
Balance as of September 30, 2014 | $ | 1,178 | $ | 467 | $ | 1,645 | ||||||
Foreign currency | Change in unrealized gains on available-for-sale securities | Total | ||||||||||
(in thousands) | ||||||||||||
Balance as of December 31, 2013 | $ | 3,153 | $ | 422 | $ | 3,575 | ||||||
Other comprehensive income before reclassifications | (1,975 | ) | 607 | (1,368 | ) | |||||||
Amounts reclassified from accumulated other comprehensive income | — | (562 | ) | (562 | ) | |||||||
Net increase in other comprehensive income | (1,975 | ) | 45 | (1,930 | ) | |||||||
Balance as of September 30, 2014 | $ | 1,178 | $ | 467 | $ | 1,645 | ||||||
All amounts reclassified from accumulated other comprehensive income were related to realized gains on available-for-sale securities. These reclassifications impacted "Interest and other income (expense)" on the Consolidated Statements of Operations. |
Income_Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2014 | |
Income Tax Disclosure [Abstract] | ' |
Income Taxes | ' |
Income Taxes | |
The effective tax rates for the three months ended September 30, 2014 and 2013 were 39% and 36%, respectively. The effective tax rates for the nine months ended September 30, 2014 and 2013 were 40% and 34%, respectively. The effective tax rates for the three and nine months ended September 30, 2014 differed from the federal statutory rate primarily due to state taxes and foreign taxes, partially offset by the California R&D credit. The effective tax rates for the three and nine months ended September 30, 2013 differed from the federal statutory rate primarily due to state taxes and foreign taxes, offset by the Federal and California R&D credits and a discrete benefit recorded for the 2012 Federal R&D credit. On January 2, 2013, the American Taxpayer Relief Act of 2012 (H.R. 8) was signed into law which retroactively extended the Federal R&D credit from January 1, 2012 through December 31, 2013. As a result, the Company recognized the retroactive benefit of the 2012 Federal R&D credit of approximately $3.1 million as a discrete item in the first quarter of 2013, the period in which the legislation was enacted. | |
The increase in the Company's effective tax rates for the three months ended September 30, 2014 as compared to the three months ended September 30, 2013 was primarily attributable to the expiration of the Federal R&D tax credit on December 31, 2013. The increase in the Company's effective tax rates for the nine months ended September 30, 2014 as compared to the nine months ended September 30, 2013 was primarily attributable to the expiration of the Federal R&D tax credit on December 31, 2013 and from the discrete item recorded in the first quarter of 2013 related to the retroactive benefit of the 2012 Federal R&D credit. | |
Gross unrecognized tax benefits were $83.1 million and $68.2 million as of September 30, 2014 and December 31, 2013, respectively. The gross unrecognized tax benefits, if recognized by the Company, will result in a reduction of approximately $68.6 million to the provision for income taxes thereby favorably impacting the Company’s effective tax rate. The Company’s unrecognized tax benefits are classified as “Other non-current liabilities” on the Consolidated Balance Sheets. The Company includes interest and penalties related to unrecognized tax benefits within the "Provision for income taxes" on the Consolidated Statements of Operations. As of September 30, 2014, the total amount of gross interest and penalties accrued was $4.6 million, and is classified as “Other non-current liabilities” on the Consolidated Balance Sheets. | |
Deferred tax assets include $14.9 million and $21.5 million classified as “Other current assets” and $113.2 million and $69.1 million classified as “Other non-current assets” on the Consolidated Balance Sheets as of September 30, 2014 and December 31, 2013, respectively. In evaluating its ability to realize the net deferred tax assets, the Company considered all available positive and negative evidence, including its past operating results and the forecast of future market growth, forecasted earnings, future taxable income, and prudent and feasible tax planning strategies. As of September 30, 2014 and December 31, 2013, it was considered more likely than not that substantially all deferred tax assets would be realized, and no significant valuation allowance was recorded. | |
Income tax benefits attributable to the exercise of employee stock options of $21.0 million and $19.7 million, during the three months ended September 30, 2014 and 2013, respectively, were recorded directly to "Additional paid-in capital" on the Consolidated Balance Sheets. Income tax benefits attributable to the exercise of employee stock options of $68.1 million and $51.1 million, during the nine months ended September 30, 2014 and 2013, respectively, were recorded directly to "Additional paid-in capital" on the Consolidated Balance Sheets. | |
The Company files U.S. federal, state and foreign tax returns. The Company is currently under examination by the IRS for the years 2008 through 2011. The IRS has completed its Field Exam of the 2008 and 2009 federal tax returns and has issued a Revenue Agent Report with a proposed assessment primarily related to the Company's R&D Credits claimed in those years. The Company has filed a protest against the proposed assessment and is currently in the midst of the IRS Appeals process. The IRS Field Exam of the 2010 and 2011 federal tax returns is in process. The 2012 and 2013 federal tax returns remain subject to examination by the IRS. | |
The Company is also currently under examination by the state of California for the years 2006 and 2007. California has completed its Field Exam of the 2006 and 2007 California tax returns and has issued a Notice of Proposed Assessment primarily related to the Company's R&D Credits claimed in those years. The Company has filed a protest against the proposed assessment and is currently awaiting the commencement of the Protest process with the Franchise Tax Board. The years 1997 through 2005, as well as 2008 through 2012, remain subject to examination by the state of California. | |
The Company is currently not under examination in any foreign jurisdiction. The years 2011 through 2013 remain subject to examination by foreign jurisdictions. | |
Given the potential outcome of the current examinations, as well as the impact of the current examination on the potential expiration of the statute of limitations, it is reasonably possible that the balance of unrecognized tax benefits could significantly change within the next twelve months. However, at this time, an estimate of the range of reasonably possible adjustments to the balance of unrecognized tax benefits cannot be made. |
Commitments_and_Contingencies
Commitments and Contingencies | 9 Months Ended | |||||||
Sep. 30, 2014 | ||||||||
Commitments and Contingencies Disclosure [Abstract] | ' | |||||||
Commitments and Contingencies | ' | |||||||
Commitments and Contingencies | ||||||||
Streaming Content | ||||||||
At September 30, 2014, the Company had $8.9 billion of obligations comprised of $2.1 billion included in "Current content liabilities" and $1.5 billion of "Non-current content liabilities" on the Consolidated Balance Sheets and $5.3 billion of obligations that are not reflected on the Consolidated Balance Sheets. | ||||||||
At December 31, 2013, the Company had $7.3 billion of obligations comprised of $1.8 billion included in "Current content liabilities" and $1.3 billion of "Non-current content liabilities" on the Consolidated Balance Sheets and $4.2 billion of obligations that are not reflected on the Consolidated Balance Sheets. | ||||||||
The expected timing of payments for these streaming content obligations is as follows: | ||||||||
As of | ||||||||
September 30, | December 31, | |||||||
2014 | 2013 | |||||||
(in thousands) | ||||||||
Less than one year | $ | 3,574,129 | $ | 2,972,325 | ||||
Due after one year and through 3 years | 4,176,621 | 3,266,907 | ||||||
Due after 3 years and through 5 years | 1,071,238 | 929,645 | ||||||
Due after 5 years | 35,239 | 83,284 | ||||||
Total streaming content obligations | $ | 8,857,227 | $ | 7,252,161 | ||||
A streaming content obligation is incurred at the time the Company enters into an agreement to obtain future titles. Once a title becomes available, a content liability is generally recorded on the Consolidated Balance Sheets. Certain agreements include the obligation to license rights for unknown future titles, the ultimate quantity and / or fees for which are not yet determinable as of the reporting date. Because the amount is not reasonably estimable, the Company does not include any estimated obligation for these future titles beyond the known minimum amount. However, the unknown obligations are expected to be significant and the expected timing of payments could range from less than one year to more than five years. | ||||||||
The Company has entered into certain licenses with performing rights organizations ("PROs"), and is currently involved in negotiations with other PROs, that hold certain rights to music and other entertainment works "publicly performed" in connection with streaming content into various territories. Accruals for estimated license fees are recorded and then adjusted based on any change in estimates. These amounts are included in the streaming content obligations. The results of these negotiations are uncertain and may be materially different from management's estimates. | ||||||||
Legal Proceedings | ||||||||
From time to time, in the normal course of its operations, the Company is subject to litigation matters and claims, including claims relating to employee relations, business practices and patent infringement. Litigation can be expensive and disruptive to normal business operations. Moreover, the results of complex legal proceedings are difficult to predict and the Company's view of these matters may change in the future as the litigation and events related thereto unfold. The Company expenses legal fees as incurred. The Company records a provision for contingent losses when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated. An unfavorable outcome to any legal matter, if material, could have an adverse effect on the Company's operations or its financial position, liquidity or results of operations. | ||||||||
On January 13, 2012, the first of three purported shareholder class action lawsuits was filed in the United States District Court for the Northern District of California against the Company and certain of its officers and directors. Two additional purported shareholder class action lawsuits were filed in the same court on January 27, 2012 and February 29, 2012 alleging substantially similar claims. These lawsuits were consolidated into In re Netflix, Inc., Securities Litigation, Case No. 3:12-cv-00225-SC, and the Court selected lead plaintiffs. On June 26, 2012, lead plaintiffs filed a consolidated complaint which alleged violations of the federal securities laws. The Court dismissed the consolidated complaint with leave to amend on February 13, 2013. Lead plaintiffs filed a first amended consolidated complaint on March 22, 2013. The Court dismissed the first amended consolidated complaint with prejudice on August 20, 2013, and judgment was entered on September 27, 2013. Lead plaintiffs filed a motion to alter or amend the judgment and requested leave to file a second amended complaint on October 25, 2013. On January 17, 2014, the Court denied that motion. On February 18, 2014, lead plaintiffs appealed that decision to the United States Court of Appeals for the Ninth Circuit. Management has determined a potential loss is reasonably possible however, based on its current knowledge, management does not believe that the amount of such possible loss or a range of potential loss is reasonably estimable | ||||||||
On November 23, 2011, the first of six purported shareholder derivative suits was filed in the Superior Court of California, Santa Clara County, against the Company and certain of its officers and directors. Five additional purported shareholder derivative suits were subsequently filed: two in the Superior Court of California, Santa Clara County on February 9, 2012 and May 2, 2012; and three in the United States District Court for the Northern District of California on February 13, 2012, February 24, 2012 and April 2, 2012. The purported shareholder derivative suits filed in the Northern District of California have been voluntarily dismissed. On July 5, 2012, the purported shareholder derivative suits filed in Santa Clara County were consolidated into In re Netflix, Inc. Shareholder Derivative Litigation, Case No. 1-12-cv-218399, and lead counsel was appointed. A consolidated complaint was filed on December 4, 2012, with plaintiffs seeking compensatory damages and other relief. The consolidated complaint alleges, among other things, that certain of the Company's current and former officers and directors breached their fiduciary duties, issued false and misleading statements primarily regarding the Company's streaming business, violated accounting rules concerning segment reporting, violated provisions of the California Corporations Code, and wasted corporate assets. The consolidated complaint further alleges that the defendants caused the Company to buy back stock at artificially inflated prices to the detriment of the Company and its shareholders while contemporaneously selling personally held Company stock. The Company filed a demurrer to the consolidated complaint and a motion to stay the derivative litigation in favor of the related federal securities class action on February 4, 2013. On June 21, 2013, the Court granted the motion to stay the derivative litigation pending resolution of the related federal securities class action. Management has determined a potential loss is reasonably possible however, based on its current knowledge, management does not believe that the amount of such possible loss or a range of potential loss is reasonably estimable. | ||||||||
The Company is involved in other litigation matters not listed above but does not consider the matters to be material either individually or in the aggregate at this time. The Company's view of the matters not listed may change in the future as the litigation and events related thereto unfold. | ||||||||
Indemnification | ||||||||
In the ordinary course of business, the Company has entered into contractual arrangements under which it has agreed to provide indemnification of varying scope and terms to business partners and other parties with respect to certain matters, including, but not limited to, losses arising out of the Company’s breach of such agreements and out of intellectual property infringement claims made by third parties. In these circumstances, payment may be conditional on the other party making a claim pursuant to the procedures specified in the particular contract. | ||||||||
The Company's obligations under these agreements may be limited in terms of time or amount, and in some instances, the Company may have recourse against third parties for certain payments. In addition, the Company has entered into indemnification agreements with its directors and certain of its officers that will require it, among other things, to indemnify them against certain liabilities that may arise by reason of their status or service as directors or officers. The terms of such obligations vary. | ||||||||
It is not possible to make a reasonable estimate of the maximum potential amount of future payments under these or similar agreements due to the conditional nature of the Company’s obligations and the unique facts and circumstances involved in each particular agreement. No amount has been accrued in the accompanying consolidated financial statements with respect to these indemnification obligations. |
Segment_Information
Segment Information | 9 Months Ended | |||||||||||||||
Sep. 30, 2014 | ||||||||||||||||
Segment Reporting [Abstract] | ' | |||||||||||||||
Segment Information | ' | |||||||||||||||
Segment Information | ||||||||||||||||
The Company has three reportable operating segments: Domestic streaming, International streaming and Domestic DVD. Segment information is presented along the same lines that the Company’s chief operating decision maker reviews the operating results in assessing performance and allocating resources. The Company’s chief operating decision maker reviews revenues and contribution profit (loss) for each of the reportable segments. Contribution profit (loss) is defined as revenues less cost of revenues and marketing expenses directly incurred by the segment. | ||||||||||||||||
The Domestic and International streaming segments derive revenues from monthly membership fees for services consisting solely of streaming content. The Domestic DVD segment derives revenues from monthly membership fees for services consisting solely of DVD-by-mail. Revenues and the related payment card fees are attributed to the operating segment based on the nature of the underlying membership (streaming or DVD) and the geographic region from which the membership originates. There are no internal revenue transactions between the Company’s reporting segments. | ||||||||||||||||
Cost of revenues are primarily attributed to the operating segment based on the amounts directly incurred by the segment to obtain content and deliver it to the specific region. Marketing expenses are primarily comprised of advertising expenses which are generally included in the segment in which the expenditures are directly incurred. | ||||||||||||||||
The Company's long-lived tangible assets were located as follows: | ||||||||||||||||
As of | ||||||||||||||||
September 30, | December 31, | |||||||||||||||
2014 | 2013 | |||||||||||||||
(in thousands) | ||||||||||||||||
United States | $ | 131,839 | $ | 126,455 | ||||||||||||
International | 12,308 | 7,150 | ||||||||||||||
The following tables represent segment information for the quarter ended September 30, 2014: | ||||||||||||||||
As of/ Three months ended September 30, 2014 | ||||||||||||||||
Domestic | International | Domestic | Consolidated | |||||||||||||
Streaming | Streaming | DVD | ||||||||||||||
(in thousands) | ||||||||||||||||
Total members at end of period (1) | 37,219 | 15,843 | 5,986 | — | ||||||||||||
Revenues | $ | 877,150 | $ | 345,685 | $ | 186,597 | $ | 1,409,432 | ||||||||
Cost of revenues | 565,251 | 291,942 | 97,201 | 954,394 | ||||||||||||
Marketing | 61,045 | 84,609 | — | 145,654 | ||||||||||||
Contribution profit (loss) | $ | 250,854 | $ | (30,866 | ) | $ | 89,396 | $ | 309,384 | |||||||
Other operating expenses | 198,977 | |||||||||||||||
Operating income | 110,407 | |||||||||||||||
Other income (expense) | (12,870 | ) | ||||||||||||||
Provision for income taxes | 38,242 | |||||||||||||||
Net income | $ | 59,295 | ||||||||||||||
As of/ Nine months ended September 30, 2014 | ||||||||||||||||
Domestic | International | Domestic | Consolidated | |||||||||||||
Streaming | Streaming | DVD | ||||||||||||||
(in thousands) | ||||||||||||||||
Total members at end of period (1) | 37,219 | 15,843 | 5,986 | — | ||||||||||||
Revenues | $ | 2,513,992 | $ | 920,264 | $ | 585,672 | $ | 4,019,928 | ||||||||
Cost of revenues | 1,628,568 | 803,906 | 305,954 | 2,738,428 | ||||||||||||
Marketing | 206,030 | 197,485 | — | 403,515 | ||||||||||||
Contribution profit (loss) | $ | 679,394 | $ | (81,127 | ) | $ | 279,718 | $ | 877,985 | |||||||
Other operating expenses | 540,383 | |||||||||||||||
Operating income | 337,602 | |||||||||||||||
Other income (expense) | (33,749 | ) | ||||||||||||||
Provision for income taxes | 120,425 | |||||||||||||||
Net income | $ | 183,428 | ||||||||||||||
The following tables represent segment information for the quarter ended September 30, 2013: | ||||||||||||||||
As of/ Three months ended September 30, 2013 | ||||||||||||||||
Domestic | International | Domestic | Consolidated | |||||||||||||
Streaming | Streaming | DVD | ||||||||||||||
(in thousands) | ||||||||||||||||
Total members at end of period (1) | 31,092 | 9,188 | 7,148 | — | ||||||||||||
Revenues | $ | 701,083 | $ | 183,051 | $ | 221,865 | $ | 1,105,999 | ||||||||
Cost of revenues | 473,965 | 209,811 | 115,124 | 798,900 | ||||||||||||
Marketing | 60,637 | 47,537 | 54 | 108,228 | ||||||||||||
Contribution profit (loss) | $ | 166,481 | $ | (74,297 | ) | $ | 106,687 | $ | 198,871 | |||||||
Other operating expenses | 141,751 | |||||||||||||||
Operating income | 57,120 | |||||||||||||||
Other income (expense) | (7,629 | ) | ||||||||||||||
Provision for income taxes | 17,669 | |||||||||||||||
Net income | $ | 31,822 | ||||||||||||||
As of/ Nine months ended September 30, 2013 | ||||||||||||||||
Domestic | International | Domestic | Consolidated | |||||||||||||
Streaming | Streaming | DVD | ||||||||||||||
(in thousands) | ||||||||||||||||
Total members at end of period (1) | 31,092 | 9,188 | 7,148 | — | ||||||||||||
Revenues | $ | 2,010,821 | $ | 490,972 | $ | 697,539 | $ | 3,199,332 | ||||||||
Cost of revenues | 1,366,897 | 561,103 | 368,526 | 2,296,526 | ||||||||||||
Marketing | 194,779 | 146,919 | 227 | 341,925 | ||||||||||||
Contribution profit (loss) | $ | 449,145 | $ | (217,050 | ) | $ | 328,786 | $ | 560,881 | |||||||
Other operating expenses | 414,822 | |||||||||||||||
Operating income | 146,059 | |||||||||||||||
Other income (expense) | (48,989 | ) | ||||||||||||||
Provision for income taxes | 33,088 | |||||||||||||||
Net income | $ | 63,982 | ||||||||||||||
The following table represents the amortization of the content library: | ||||||||||||||||
Domestic | International | Domestic | Consolidated | |||||||||||||
Streaming | Streaming | DVD | ||||||||||||||
Three months ended September 30, | (in thousands) | |||||||||||||||
2014 | $ | 433,266 | $ | 252,888 | $ | 18,269 | $ | 704,423 | ||||||||
2013 | 363,787 | 189,607 | 17,546 | 570,940 | ||||||||||||
Nine months ended September 30, | ||||||||||||||||
2014 | 1,229,477 | 696,449 | 51,313 | 1,977,239 | ||||||||||||
2013 | 1,043,976 | 505,408 | 53,492 | 1,602,876 | ||||||||||||
The following table represents total content library, net: | ||||||||||||||||
Domestic | International | Domestic | Consolidated | |||||||||||||
Streaming | Streaming | DVD | ||||||||||||||
(in thousands) | ||||||||||||||||
As of September 30, 2014 | $ | 3,334,646 | $ | 1,276,686 | $ | 27,531 | $ | 4,638,863 | ||||||||
As of December 31, 2013 | 2,973,023 | 804,690 | 19,779 | 3,797,492 | ||||||||||||
-1 | A membership (also referred to as a subscription) is defined as the right to receive either the Netflix streaming service or Netflix DVD service. Memberships are assigned to territories based on the geographic location used at time of sign up as determined by the Company's internal systems, which utilize industry standard geo-location technology. The Company offers free-trial memberships to new and certain rejoining members. For inclusion in the definition of a member in the above metrics, a method of payment is required to be provided even during the free-trial period. Total members therefore include those who are on a free-trial and have provided a method of payment. A membership is canceled and ceases to be reflected in the above metrics as of the effective cancellation date. Voluntary cancellations become effective at the end of the prepaid membership period, while involuntary cancellation of the service, as a result of a failed method of payment, becomes effective immediately. |
Basis_of_Presentation_and_Summ1
Basis of Presentation and Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2014 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ' |
Use of Estimates | ' |
The preparation of consolidated financial statements in conformity with U.S. generally accepted accounting principles (“GAAP”) requires management to make estimates and judgments that affect the amounts reported in the consolidated financial statements and accompanying notes. Significant items subject to such estimates and assumptions include the amortization policy for the streaming content library; the recognition and measurement of income tax assets and liabilities; and the valuation of stock-based compensation. The Company bases its estimates on historical experience and on various other assumptions that the Company believes to be reasonable under the circumstances. On a regular basis, the Company evaluates the assumptions, judgments and estimates. Actual results may differ from these estimates. |
Earnings_Per_Share_Tables
Earnings Per Share (Tables) | 9 Months Ended | |||||||||||||||
Sep. 30, 2014 | ||||||||||||||||
Earnings Per Share [Abstract] | ' | |||||||||||||||
Computation Of Net Income Per Share | ' | |||||||||||||||
The computation of earnings per share is as follows: | ||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||
September 30, | September 30, | September 30, | September 30, | |||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||
(in thousands, except per share data) | ||||||||||||||||
Basic earnings per share: | ||||||||||||||||
Net income | $ | 59,295 | $ | 31,822 | $ | 183,428 | $ | 63,982 | ||||||||
Shares used in computation: | ||||||||||||||||
Weighted-average common shares outstanding | 60,171 | 59,108 | 59,996 | 57,769 | ||||||||||||
Basic earnings per share | $ | 0.99 | $ | 0.54 | $ | 3.06 | $ | 1.11 | ||||||||
Diluted earnings per share: | ||||||||||||||||
Net income | $ | 59,295 | $ | 31,822 | $ | 183,428 | $ | 63,982 | ||||||||
Senior Convertible Notes interest expense, net of tax | — | — | — | 49 | ||||||||||||
Numerator for diluted earnings per share | $ | 59,295 | $ | 31,822 | $ | 183,428 | $ | 64,031 | ||||||||
Shares used in computation: | ||||||||||||||||
Weighted-average common shares outstanding | 60,171 | 59,108 | 59,996 | 57,769 | ||||||||||||
Senior Convertible Notes shares | — | — | — | 956 | ||||||||||||
Employee stock options | 1,649 | 1,882 | 1,673 | 1,853 | ||||||||||||
Weighted-average number of shares | 61,820 | 60,990 | 61,669 | 60,578 | ||||||||||||
Diluted earnings per share | $ | 0.96 | $ | 0.52 | $ | 2.97 | $ | 1.06 | ||||||||
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share | ' | |||||||||||||||
The following table summarizes the potential common shares excluded from the diluted calculation: | ||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||
September 30, | September 30, | September 30, | September 30, | |||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||
(in thousands) | ||||||||||||||||
Employee stock options | 53 | 12 | 64 | 260 | ||||||||||||
Shortterm_Investments_Tables
Short-term Investments (Tables) | 9 Months Ended | |||||||||||||||
Sep. 30, 2014 | ||||||||||||||||
Short-Term Investments And Fair Value Measurement [Abstract] | ' | |||||||||||||||
Available-For-Sale Securities Reported At Fair Value | ' | |||||||||||||||
The following tables summarize, by major security type, the Company’s assets that are measured at fair value on a recurring basis and are categorized using the fair value hierarchy: | ||||||||||||||||
As of September 30, 2014 | ||||||||||||||||
Amortized | Gross | Gross | Estimated | |||||||||||||
Cost | Unrealized | Unrealized | Fair Value | |||||||||||||
Gains | Losses | |||||||||||||||
(in thousands) | ||||||||||||||||
Cash | $ | 1,065,988 | $ | — | $ | — | $ | 1,065,988 | ||||||||
Level 1 securities: | ||||||||||||||||
Money market funds | 122,936 | — | — | 122,936 | ||||||||||||
Level 2 securities: | ||||||||||||||||
Corporate debt securities | 292,410 | 718 | (99 | ) | 293,029 | |||||||||||
Government securities | 166,991 | 169 | (53 | ) | 167,107 | |||||||||||
Asset-backed securities | 370 | — | — | 370 | ||||||||||||
Certificate of deposits and commercial paper | 6,605 | — | — | 6,605 | ||||||||||||
Agency securities | 16,483 | 8 | — | 16,491 | ||||||||||||
Total (1) | $ | 1,671,783 | $ | 895 | $ | (152 | ) | $ | 1,672,526 | |||||||
As of December 31, 2013 | ||||||||||||||||
Amortized | Gross | Gross | Estimated | |||||||||||||
Cost | Unrealized | Unrealized | Fair Value | |||||||||||||
Gains | Losses | |||||||||||||||
(in thousands) | ||||||||||||||||
Cash | $ | 483,959 | $ | — | $ | — | $ | 483,959 | ||||||||
Level 1 securities: | ||||||||||||||||
Money market funds | 126,208 | — | — | 126,208 | ||||||||||||
Level 2 securities: | ||||||||||||||||
Corporate debt securities | 316,465 | 1,245 | (654 | ) | 317,056 | |||||||||||
Government securities | 143,812 | 287 | (18 | ) | 144,081 | |||||||||||
Asset and mortgage-backed securities | 93,118 | 229 | (418 | ) | 92,929 | |||||||||||
Certificate of deposits | 23,425 | — | — | 23,425 | ||||||||||||
Agency securities | 17,951 | — | (2 | ) | 17,949 | |||||||||||
Total (2) | $ | 1,204,938 | $ | 1,761 | $ | (1,092 | ) | $ | 1,205,607 | |||||||
-1 | Includes $1,183.2 million that is included in cash and cash equivalents, $483.6 million included in short-term investments and $5.7 million of restricted cash that is included in other non-current assets related primarily to workers compensation deposits. | |||||||||||||||
-2 | Includes $605.0 million that is included in cash and cash equivalents, $595.4 million included in short-term investments and $5.2 million of restricted cash that is included in other non-current assets related to workers compensation deposits. | |||||||||||||||
Estimated Fair Value Of Short-Term Investments By Contractual Maturity | ' | |||||||||||||||
The estimated fair value of short-term investments by contractual maturity as of September 30, 2014 is as follows: | ||||||||||||||||
(in thousands) | ||||||||||||||||
Due within one year | $ | 112,361 | ||||||||||||||
Due after one year and through 5 years | 371,241 | |||||||||||||||
Total short-term investments | $ | 483,602 | ||||||||||||||
Balance_Sheet_Components_Table
Balance Sheet Components (Tables) | 9 Months Ended | |||||||||
Sep. 30, 2014 | ||||||||||
Balance Sheet Components Disclosure [Abstract] | ' | |||||||||
Content Library | ' | |||||||||
Content library consisted of the following: | ||||||||||
As of | ||||||||||
September 30, | December 31, | |||||||||
2014 | 2013 | |||||||||
(in thousands) | ||||||||||
Total content library, gross | $ | 8,013,370 | $ | 6,474,688 | ||||||
Accumulated amortization | (3,374,507 | ) | (2,677,196 | ) | ||||||
Total content library, net | 4,638,863 | 3,797,492 | ||||||||
Current content library, net | 2,006,981 | 1,706,421 | ||||||||
Non-current content library, net | $ | 2,631,882 | $ | 2,091,071 | ||||||
Property And Equipment, Net | ' | |||||||||
Property and equipment and accumulated depreciation consisted of the following: | ||||||||||
As of | ||||||||||
September 30, | December 31, | |||||||||
2014 | 2013 | |||||||||
(in thousands) | ||||||||||
Computer equipment | 3 years | $ | 138,814 | $ | 102,867 | |||||
Operations and other equipment | 5 years | 89,144 | 96,361 | |||||||
Software | 3 years | 36,933 | 36,439 | |||||||
Furniture and fixtures | 3 years | 25,008 | 21,011 | |||||||
Building | 30 years | 40,681 | 40,681 | |||||||
Leasehold improvements | Over life of lease | 55,160 | 51,194 | |||||||
Capital work-in-progress | 10,814 | 8,643 | ||||||||
Property and equipment, gross | 396,554 | 357,196 | ||||||||
Less: Accumulated depreciation | (252,407 | ) | (223,591 | ) | ||||||
Property and equipment, net | $ | 144,147 | $ | 133,605 | ||||||
Stockholders_Equity_Tables
Stockholders' Equity (Tables) | 9 Months Ended | |||||||||||||||
Sep. 30, 2014 | ||||||||||||||||
Stockholders' Equity and Stock-based Compensation Disclosure [Abstract] | ' | |||||||||||||||
Summary Of Activity Related To Stock Option Plans | ' | |||||||||||||||
A summary of the activities related to the Company’s stock option plans is as follows: | ||||||||||||||||
Options Outstanding | ||||||||||||||||
Shares | Number of | Weighted- | Weighted-Average Remaining | Aggregate | ||||||||||||
Available | Shares | Average | Contractual Term | Intrinsic Value | ||||||||||||
for Grant | Exercise Price | (in Years) | (in Thousands) | |||||||||||||
Balances as of December 31, 2013 | 3,406,317 | 3,526,898 | $ | 95.25 | ||||||||||||
Granted | (391,239 | ) | 391,239 | 409.7 | ||||||||||||
Exercised | (639,378 | ) | 88.82 | |||||||||||||
Balances as of September 30, 2014 | 3,015,078 | 3,278,759 | 134.02 | 5.97 | $ | 1,041,797 | ||||||||||
Vested and exercisable at September 30, 2014 | 3,278,759 | 134.02 | 5.97 | $ | 1,041,797 | |||||||||||
Summary Of Assumptions Used To Value Stock Option Grants Using Lattice-Binomial Model | ' | |||||||||||||||
The following table summarizes the assumptions used to value stock option grants using the lattice-binomial model: | ||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||
September 30, | September 30, | September 30, | September 30, | |||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||
Dividend yield | — | % | — | % | — | % | — | % | ||||||||
Expected volatility | 43 | % | 51 | % | 43% - 48% | 51% - 54% | ||||||||||
Risk-free interest rate | 2.52 | % | 2.55 | % | 2.52% - 2.83% | 1.87% - 2.55% | ||||||||||
Suboptimal exercise factor | 2.68 - 4.57 | 2.43 - 3.79 | 2.66 - 4.57 | 2.33 - 3.79 | ||||||||||||
Accumulated_Other_Comprehensiv1
Accumulated Other Comprehensive Income (Tables) | 9 Months Ended | |||||||||||
Sep. 30, 2014 | ||||||||||||
Equity [Abstract] | ' | |||||||||||
Schedule of Changes in Accumulated Other Comprehensive Income | ' | |||||||||||
The following tables summarize the changes in accumulated balances of other comprehensive income, net of tax, for the three and nine months ended September 30, 2014: | ||||||||||||
Foreign currency | Change in unrealized gains on available-for-sale securities | Total | ||||||||||
(in thousands) | ||||||||||||
Balance as of June 30, 2014 | $ | 5,532 | $ | 970 | $ | 6,502 | ||||||
Other comprehensive income before reclassifications | (4,354 | ) | (191 | ) | (4,545 | ) | ||||||
Amounts reclassified from accumulated other comprehensive income | — | (312 | ) | (312 | ) | |||||||
Net increase in other comprehensive income | (4,354 | ) | (503 | ) | (4,857 | ) | ||||||
Balance as of September 30, 2014 | $ | 1,178 | $ | 467 | $ | 1,645 | ||||||
Foreign currency | Change in unrealized gains on available-for-sale securities | Total | ||||||||||
(in thousands) | ||||||||||||
Balance as of December 31, 2013 | $ | 3,153 | $ | 422 | $ | 3,575 | ||||||
Other comprehensive income before reclassifications | (1,975 | ) | 607 | (1,368 | ) | |||||||
Amounts reclassified from accumulated other comprehensive income | — | (562 | ) | (562 | ) | |||||||
Net increase in other comprehensive income | (1,975 | ) | 45 | (1,930 | ) | |||||||
Balance as of September 30, 2014 | $ | 1,178 | $ | 467 | $ | 1,645 | ||||||
Commitments_and_Contingencies_
Commitments and Contingencies (Tables) | 9 Months Ended | |||||||
Sep. 30, 2014 | ||||||||
Commitments and Contingencies Disclosure [Abstract] | ' | |||||||
Expected Timing Of Payments For Commitments | ' | |||||||
The expected timing of payments for these streaming content obligations is as follows: | ||||||||
As of | ||||||||
September 30, | December 31, | |||||||
2014 | 2013 | |||||||
(in thousands) | ||||||||
Less than one year | $ | 3,574,129 | $ | 2,972,325 | ||||
Due after one year and through 3 years | 4,176,621 | 3,266,907 | ||||||
Due after 3 years and through 5 years | 1,071,238 | 929,645 | ||||||
Due after 5 years | 35,239 | 83,284 | ||||||
Total streaming content obligations | $ | 8,857,227 | $ | 7,252,161 | ||||
Segment_Information_Tables
Segment Information (Tables) | 9 Months Ended | |||||||||||||||
Sep. 30, 2014 | ||||||||||||||||
Segment Reporting [Abstract] | ' | |||||||||||||||
Long-lived Assets by Geographic Areas | ' | |||||||||||||||
The Company's long-lived tangible assets were located as follows: | ||||||||||||||||
As of | ||||||||||||||||
September 30, | December 31, | |||||||||||||||
2014 | 2013 | |||||||||||||||
(in thousands) | ||||||||||||||||
United States | $ | 131,839 | $ | 126,455 | ||||||||||||
International | 12,308 | 7,150 | ||||||||||||||
Information On Reportable Segments And Reconciliation To Consolidated Net Income | ' | |||||||||||||||
The following tables represent segment information for the quarter ended September 30, 2014: | ||||||||||||||||
As of/ Three months ended September 30, 2014 | ||||||||||||||||
Domestic | International | Domestic | Consolidated | |||||||||||||
Streaming | Streaming | DVD | ||||||||||||||
(in thousands) | ||||||||||||||||
Total members at end of period (1) | 37,219 | 15,843 | 5,986 | — | ||||||||||||
Revenues | $ | 877,150 | $ | 345,685 | $ | 186,597 | $ | 1,409,432 | ||||||||
Cost of revenues | 565,251 | 291,942 | 97,201 | 954,394 | ||||||||||||
Marketing | 61,045 | 84,609 | — | 145,654 | ||||||||||||
Contribution profit (loss) | $ | 250,854 | $ | (30,866 | ) | $ | 89,396 | $ | 309,384 | |||||||
Other operating expenses | 198,977 | |||||||||||||||
Operating income | 110,407 | |||||||||||||||
Other income (expense) | (12,870 | ) | ||||||||||||||
Provision for income taxes | 38,242 | |||||||||||||||
Net income | $ | 59,295 | ||||||||||||||
As of/ Nine months ended September 30, 2014 | ||||||||||||||||
Domestic | International | Domestic | Consolidated | |||||||||||||
Streaming | Streaming | DVD | ||||||||||||||
(in thousands) | ||||||||||||||||
Total members at end of period (1) | 37,219 | 15,843 | 5,986 | — | ||||||||||||
Revenues | $ | 2,513,992 | $ | 920,264 | $ | 585,672 | $ | 4,019,928 | ||||||||
Cost of revenues | 1,628,568 | 803,906 | 305,954 | 2,738,428 | ||||||||||||
Marketing | 206,030 | 197,485 | — | 403,515 | ||||||||||||
Contribution profit (loss) | $ | 679,394 | $ | (81,127 | ) | $ | 279,718 | $ | 877,985 | |||||||
Other operating expenses | 540,383 | |||||||||||||||
Operating income | 337,602 | |||||||||||||||
Other income (expense) | (33,749 | ) | ||||||||||||||
Provision for income taxes | 120,425 | |||||||||||||||
Net income | $ | 183,428 | ||||||||||||||
The following tables represent segment information for the quarter ended September 30, 2013: | ||||||||||||||||
As of/ Three months ended September 30, 2013 | ||||||||||||||||
Domestic | International | Domestic | Consolidated | |||||||||||||
Streaming | Streaming | DVD | ||||||||||||||
(in thousands) | ||||||||||||||||
Total members at end of period (1) | 31,092 | 9,188 | 7,148 | — | ||||||||||||
Revenues | $ | 701,083 | $ | 183,051 | $ | 221,865 | $ | 1,105,999 | ||||||||
Cost of revenues | 473,965 | 209,811 | 115,124 | 798,900 | ||||||||||||
Marketing | 60,637 | 47,537 | 54 | 108,228 | ||||||||||||
Contribution profit (loss) | $ | 166,481 | $ | (74,297 | ) | $ | 106,687 | $ | 198,871 | |||||||
Other operating expenses | 141,751 | |||||||||||||||
Operating income | 57,120 | |||||||||||||||
Other income (expense) | (7,629 | ) | ||||||||||||||
Provision for income taxes | 17,669 | |||||||||||||||
Net income | $ | 31,822 | ||||||||||||||
As of/ Nine months ended September 30, 2013 | ||||||||||||||||
Domestic | International | Domestic | Consolidated | |||||||||||||
Streaming | Streaming | DVD | ||||||||||||||
(in thousands) | ||||||||||||||||
Total members at end of period (1) | 31,092 | 9,188 | 7,148 | — | ||||||||||||
Revenues | $ | 2,010,821 | $ | 490,972 | $ | 697,539 | $ | 3,199,332 | ||||||||
Cost of revenues | 1,366,897 | 561,103 | 368,526 | 2,296,526 | ||||||||||||
Marketing | 194,779 | 146,919 | 227 | 341,925 | ||||||||||||
Contribution profit (loss) | $ | 449,145 | $ | (217,050 | ) | $ | 328,786 | $ | 560,881 | |||||||
Other operating expenses | 414,822 | |||||||||||||||
Operating income | 146,059 | |||||||||||||||
Other income (expense) | (48,989 | ) | ||||||||||||||
Provision for income taxes | 33,088 | |||||||||||||||
Net income | $ | 63,982 | ||||||||||||||
The following table represents the amortization of the content library: | ||||||||||||||||
Domestic | International | Domestic | Consolidated | |||||||||||||
Streaming | Streaming | DVD | ||||||||||||||
Three months ended September 30, | (in thousands) | |||||||||||||||
2014 | $ | 433,266 | $ | 252,888 | $ | 18,269 | $ | 704,423 | ||||||||
2013 | 363,787 | 189,607 | 17,546 | 570,940 | ||||||||||||
Nine months ended September 30, | ||||||||||||||||
2014 | 1,229,477 | 696,449 | 51,313 | 1,977,239 | ||||||||||||
2013 | 1,043,976 | 505,408 | 53,492 | 1,602,876 | ||||||||||||
The following table represents total content library, net: | ||||||||||||||||
Domestic | International | Domestic | Consolidated | |||||||||||||
Streaming | Streaming | DVD | ||||||||||||||
(in thousands) | ||||||||||||||||
As of September 30, 2014 | $ | 3,334,646 | $ | 1,276,686 | $ | 27,531 | $ | 4,638,863 | ||||||||
As of December 31, 2013 | 2,973,023 | 804,690 | 19,779 | 3,797,492 | ||||||||||||
-1 | A membership (also referred to as a subscription) is defined as the right to receive either the Netflix streaming service or Netflix DVD service. Memberships are assigned to territories based on the geographic location used at time of sign up as determined by the Company's internal systems, which utilize industry standard geo-location technology. The Company offers free-trial memberships to new and certain rejoining members. For inclusion in the definition of a member in the above metrics, a method of payment is required to be provided even during the free-trial period. Total members therefore include those who are on a free-trial and have provided a method of payment. A membership is canceled and ceases to be reflected in the above metrics as of the effective cancellation date. Voluntary cancellations become effective at the end of the prepaid membership period, while involuntary cancellation of the service, as a result of a failed method of payment, becomes effective immediately. |
Basis_of_Presentation_and_Summ2
Basis of Presentation and Summary of Significant Accounting Policies (Details) | 9 Months Ended |
Sep. 30, 2014 | |
segment | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ' |
Number of Operating Segments | 3 |
Reclassifications_Schedule_of_
Reclassifications - Schedule of Marketing and General and Administrative Expenses Reclassified (Details) (Marketing Expenses Reclassified to Costs of Revenues [Member], USD $) | 3 Months Ended | 9 Months Ended |
In Millions, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2013 |
Marketing Expenses Reclassified to Costs of Revenues [Member] | ' | ' |
Costs of free trials allocated to marketing reclassified to cost of revenues | $7.90 | $25.10 |
Earnings_Per_Share_Computation
Earnings Per Share - Computation Of Net Income Per Share (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, except Per Share data, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 |
Basic earnings per share: | ' | ' | ' | ' |
Net income | $59,295 | $31,822 | $183,428 | $63,982 |
Weighted-average common shares outstanding | 60,171 | 59,108 | 59,996 | 57,769 |
Basic earnings per share (in dollars per share) | $0.99 | $0.54 | $3.06 | $1.11 |
Diluted earnings per share: | ' | ' | ' | ' |
Net income | 59,295 | 31,822 | 183,428 | 63,982 |
Senior Convertible Notes interest expense, net of tax | 0 | 0 | 0 | 49 |
Numerator for diluted earnings per share | $59,295 | $31,822 | $183,428 | $64,031 |
Shares used in computation: | ' | ' | ' | ' |
Weighted-average common shares outstanding | 60,171 | 59,108 | 59,996 | 57,769 |
Senior Convertible Notes shares | 0 | 0 | 0 | 956 |
Employee stock options | 1,649 | 1,882 | 1,673 | 1,853 |
Weighted-average number of shares - Diluted | 61,820 | 60,990 | 61,669 | 60,578 |
Diluted earnings per share (in dollars per share) | $0.96 | $0.52 | $2.97 | $1.06 |
Earnings_Per_Share_Schedule_of
Earnings Per Share - Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share (Details) (Employee stock options [Member]) | 3 Months Ended | 9 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 |
Employee stock options [Member] | ' | ' | ' | ' |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ' | ' | ' | ' |
Employee stock options | 53 | 12 | 64 | 260 |
Shortterm_Investments_Availabl
Short-term Investments - Available-For-Sale Securities Reported At Fair Value (Details) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 | ||
In Thousands, unless otherwise specified | ||||
Schedule of Available-for-sale Securities [Line Items] | ' | ' | ||
Total, Amortized Cost | $1,671,783 | [1] | $1,204,938 | [2] |
Total, Unrealized Gains | 895 | [1] | 1,761 | [2] |
Total, Unrealized Losses | -152 | [1] | -1,092 | [2] |
Total, Estimated Fair Value | 1,672,526 | [1] | 1,205,607 | [2] |
Cash and Cash Equivalents [Member] | ' | ' | ||
Schedule of Available-for-sale Securities [Line Items] | ' | ' | ||
Total, Estimated Fair Value | 1,183,200 | 605,000 | ||
Short-term Investments [Member] | ' | ' | ||
Schedule of Available-for-sale Securities [Line Items] | ' | ' | ||
Total, Estimated Fair Value | 483,600 | 595,400 | ||
Non-current Assets [Member] | ' | ' | ||
Schedule of Available-for-sale Securities [Line Items] | ' | ' | ||
Total, Estimated Fair Value | 5,700 | 5,200 | ||
Level 1 Securities [Member] | Money market funds [Member] | ' | ' | ||
Schedule of Available-for-sale Securities [Line Items] | ' | ' | ||
Cash, Money market and Government and agency securities classified as cash equivalents, Amortized Cost | 122,936 | 126,208 | ||
Cash, Money market and Government and agency securities classified as cash equivalents, Gross Unrealized Gains | 0 | 0 | ||
Cash, Money market and Government and agency securities classified as cash equivalents, Gross Unrealized Losses | 0 | 0 | ||
Cash, Money market and Government and agency securities classified as cash equivalents, Estimated Fair Value | 122,936 | 126,208 | ||
Level 2 Securities [Member] | Corporate debt securities [Member] | ' | ' | ||
Schedule of Available-for-sale Securities [Line Items] | ' | ' | ||
Available-for-sale Securities, Amortized Cost | 292,410 | 316,465 | ||
Available-for-sale Securities, Gross Unrealized Gains | 718 | 1,245 | ||
Available-for-sale Securities, Gross Unrealized Losses | -99 | -654 | ||
Available-for-sale Securities, Estimated Fair Value | 293,029 | 317,056 | ||
Level 2 Securities [Member] | Government securities [Member] | ' | ' | ||
Schedule of Available-for-sale Securities [Line Items] | ' | ' | ||
Available-for-sale Securities, Amortized Cost | 166,991 | 143,812 | ||
Available-for-sale Securities, Gross Unrealized Gains | 169 | 287 | ||
Available-for-sale Securities, Gross Unrealized Losses | -53 | -18 | ||
Available-for-sale Securities, Estimated Fair Value | 167,107 | 144,081 | ||
Level 2 Securities [Member] | Asset and mortgage-backed securities [Member] | ' | ' | ||
Schedule of Available-for-sale Securities [Line Items] | ' | ' | ||
Available-for-sale Securities, Amortized Cost | 370 | 93,118 | ||
Available-for-sale Securities, Gross Unrealized Gains | 0 | 229 | ||
Available-for-sale Securities, Gross Unrealized Losses | 0 | -418 | ||
Available-for-sale Securities, Estimated Fair Value | 370 | 92,929 | ||
Level 2 Securities [Member] | Certificates of deposits and commercial paper [Member] | ' | ' | ||
Schedule of Available-for-sale Securities [Line Items] | ' | ' | ||
Available-for-sale Securities, Amortized Cost | 6,605 | ' | ||
Available-for-sale Securities, Gross Unrealized Gains | 0 | ' | ||
Available-for-sale Securities, Gross Unrealized Losses | 0 | ' | ||
Available-for-sale Securities, Estimated Fair Value | 6,605 | ' | ||
Level 2 Securities [Member] | Certificates of deposit [Member] | ' | ' | ||
Schedule of Available-for-sale Securities [Line Items] | ' | ' | ||
Available-for-sale Securities, Amortized Cost | ' | 23,425 | ||
Available-for-sale Securities, Gross Unrealized Gains | ' | 0 | ||
Available-for-sale Securities, Gross Unrealized Losses | ' | 0 | ||
Available-for-sale Securities, Estimated Fair Value | ' | 23,425 | ||
Level 2 Securities [Member] | Agency securities [Member] | ' | ' | ||
Schedule of Available-for-sale Securities [Line Items] | ' | ' | ||
Available-for-sale Securities, Amortized Cost | 16,483 | 17,951 | ||
Available-for-sale Securities, Gross Unrealized Gains | 8 | 0 | ||
Available-for-sale Securities, Gross Unrealized Losses | 0 | -2 | ||
Available-for-sale Securities, Estimated Fair Value | 16,491 | 17,949 | ||
Cash [Member] | ' | ' | ||
Schedule of Available-for-sale Securities [Line Items] | ' | ' | ||
Cash, Money market and Government and agency securities classified as cash equivalents, Amortized Cost | 1,065,988 | 483,959 | ||
Cash, Money market and Government and agency securities classified as cash equivalents, Gross Unrealized Gains | 0 | 0 | ||
Cash, Money market and Government and agency securities classified as cash equivalents, Gross Unrealized Losses | 0 | 0 | ||
Cash, Money market and Government and agency securities classified as cash equivalents, Estimated Fair Value | $1,065,988 | $483,959 | ||
[1] | Includes $1,183.2 million that is included in cash and cash equivalents, $483.6 million included in short-term investments and $5.7 million of restricted cash that is included in other non-current assets related primarily to workers compensation deposits. | |||
[2] | Includes $605.0 million that is included in cash and cash equivalents, $595.4 million included in short-term investments and $5.2 million of restricted cash that is included in other non-current assets related to workers compensation deposits. |
Shortterm_Investments_Estimate
Short-term Investments - Estimated Fair Value Of Short-Term Investments By Contractual Maturity (Details) (USD $) | Sep. 30, 2014 |
In Thousands, unless otherwise specified | |
Short-Term Investments And Fair Value Measurement [Abstract] | ' |
Due within one year | $112,361 |
Due after one year and through 5 years | 371,241 |
Total short-term investments | $483,602 |
Balance_Sheet_Components_Compo
Balance Sheet Components - Components of Content Library (Details) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Balance Sheet Components Disclosure [Abstract] | ' | ' |
Total content library, gross | $8,013,370 | $6,474,688 |
Accumulated amortization | -3,374,507 | -2,677,196 |
Total content library, net | 4,638,863 | 3,797,492 |
Current content library, net | 2,006,981 | 1,706,421 |
Non-current content library, net | $2,631,882 | $2,091,071 |
Balance_Sheet_Components_Prope
Balance Sheet Components - Property And Equipment And Accumulated Depreciation (Details) (USD $) | 9 Months Ended | |
In Thousands, unless otherwise specified | Sep. 30, 2014 | Dec. 31, 2013 |
Property, Plant and Equipment [Line Items] | ' | ' |
Property and equipment, gross | $396,554 | $357,196 |
Less: Accumulated depreciation | -252,407 | -223,591 |
Property and equipment, net | 144,147 | 133,605 |
Computer equipment [Member] | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' |
Property, Plant and Equipment, Useful Life | '3 years | ' |
Property and equipment, gross | 138,814 | 102,867 |
Operations and other equipment [Member] | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' |
Property, Plant and Equipment, Useful Life | '5 years | ' |
Property and equipment, gross | 89,144 | 96,361 |
Software [Member] | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' |
Property, Plant and Equipment, Useful Life | '3 years | ' |
Property and equipment, gross | 36,933 | 36,439 |
Furniture and fixtures [Member] | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' |
Property, Plant and Equipment, Useful Life | '3 years | ' |
Property and equipment, gross | 25,008 | 21,011 |
Building [Member] | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' |
Property, Plant and Equipment, Useful Life | '30 years | ' |
Property and equipment, gross | 40,681 | 40,681 |
Leasehold improvements [Member] | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' |
Property and equipment, gross | 55,160 | 51,194 |
Capital work-in-progress [Member] | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' |
Property and equipment, gross | $10,814 | $8,643 |
Longterm_Debt_Senior_Convertib
Long-term Debt - Senior Convertible Notes - Narrative (Details) (Director [Member], Convertible Debt [Member], Senior Convertible Note [Member], USD $) | 0 Months Ended | 1 Months Ended | |
Share data in Millions, except Per Share data, unless otherwise specified | 28-May-12 | Apr. 30, 2013 | Nov. 30, 2011 |
Debt Instrument [Line Items] | ' | ' | ' |
Long-term debt due to related party | ' | $200,000,000 | $200,000,000 |
Interest rate | ' | ' | 0.00% |
Weighted average price of common stock | $111.54 | ' | ' |
Common stock, shares issued | ' | 2.3 | ' |
Common stock conversion ratio | ' | 11.6553 | ' |
Fair value at conversion | ' | $217 | ' |
Minimum [Member] | ' | ' | ' |
Debt Instrument [Line Items] | ' | ' | ' |
Trading days prior to conversion date required for conversion | '50 days | ' | ' |
Maximum [Member] | ' | ' | ' |
Debt Instrument [Line Items] | ' | ' | ' |
Trading days prior to conversion date required for conversion | '65 days | ' | ' |
Longterm_Debt_Senior_Notes_Nar
Long-term Debt - Senior Notes - Narrative (Details) (USD $) | 3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | |||||||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Mar. 31, 2013 | Sep. 30, 2014 | Feb. 28, 2013 | Sep. 30, 2014 | Dec. 31, 2013 | Mar. 31, 2013 | Sep. 30, 2014 | Feb. 28, 2014 | Sep. 30, 2014 | |
Senior Notes [Member] | Senior Notes [Member] | Senior Notes [Member] | Senior Notes [Member] | Senior Notes [Member] | Senior Notes [Member] | Senior Notes [Member] | Senior Notes [Member] | Senior Notes [Member] | |||||
5.375% Senior Notes [Member] | 5.375% Senior Notes [Member] | 5.375% Senior Notes [Member] | 5.375% Senior Notes [Member] | 5.375% Senior Notes [Member] | 8.50% Senior Notes [Member] | 5.750% Senior Notes [Member] | 5.750% Senior Notes [Member] | 5.750% Senior Notes [Member] | |||||
Level 2 Securities [Member] | Level 2 Securities [Member] | Level 2 Securities [Member] | |||||||||||
Debt Instrument [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Face amount | ' | ' | ' | ' | ' | ' | $500,000,000 | ' | ' | $200,000,000 | ' | $400,000,000 | ' |
Interest rate | ' | ' | ' | ' | ' | ' | 5.38% | ' | ' | 8.50% | ' | 5.75% | ' |
Redemption prices, percent of outstanding principal | ' | ' | ' | ' | ' | 101.00% | ' | ' | ' | ' | 101.00% | ' | ' |
Repayments | 0 | 0 | 0 | 219,362,000 | 224,500,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Make-whole premium | ' | ' | ' | ' | ' | ' | ' | ' | ' | 19,400,000 | ' | ' | ' |
Interest payable | ' | ' | ' | ' | ' | ' | ' | ' | ' | 5,100,000 | ' | ' | ' |
Loss on extinguishment of debt | 0 | 0 | 0 | -25,129,000 | ' | ' | ' | ' | ' | 25,100,000 | ' | ' | ' |
Write off of unamortized deferred financing costs | ' | ' | ' | ' | ' | ' | ' | ' | ' | 4,200,000 | ' | ' | ' |
Senior notes, fair value | ' | ' | ' | ' | ' | ' | ' | $510,000,000 | $506,300,000 | ' | ' | ' | $412,000,000 |
Stockholders_Equity_Narrative_
Stockholders' Equity - Narrative (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
Share data in Millions, except Per Share data, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 |
employee_group | ||||
Components of Stockholders' Equity [Line Items] | ' | ' | ' | ' |
Total intrinsic value of options exercised | $60,300,000 | $64,500,000 | $208,000,000 | $182,800,000 |
Proceeds from issuance of common stock | 9,877,000 | 25,561,000 | 56,794,000 | 93,553,000 |
Number of employee groups | ' | ' | 2 | ' |
Weighted-average fair value of employee stock options granted per share | $236.96 | $136.78 | $217.23 | $100.08 |
Stock-based compensation expense | 29,900,000 | 18,500,000 | 85,000,000 | 54,200,000 |
Income tax benefit | $11,400,000 | $7,100,000 | $32,500,000 | $20,800,000 |
2011 Stock Plan [Member] | ' | ' | ' | ' |
Components of Stockholders' Equity [Line Items] | ' | ' | ' | ' |
Shares reserved for future issuance | 3 | ' | 3 | ' |
Stockholders_Equity_Summary_Of
Stockholders' Equity - Summary Of Activity Related To Stock Option Plans (Details) (USD $) | 9 Months Ended |
In Thousands, except Share data, unless otherwise specified | Sep. 30, 2014 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | ' |
Shares Available for Grant, Beginning Balance | 3,406,317 |
Options Outstanding, Number of Shares, Beginning Balance | 3,526,898 |
Options Outstanding, Number of Shares, Granted | 391,239 |
Options Outstanding, Number of Shares, Exercised | -639,378 |
Shares Available for Grant, Ending Balance | 3,015,078 |
Options Outstanding, Number of Shares, Ending Balance | 3,278,759 |
Options Outstanding, Number of Shares, Vested and exercisable | 3,278,759 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Roll Forward] | ' |
Options Outstanding, Weighted-Average Exercise Price, Beginning Balance | $95.25 |
Options Outstanding, Weighted-Average Exercise Price, Granted | $409.70 |
Options Outstanding, Weighted-Average Exercise Price, Exercised | $88.82 |
Options Outstanding, Weighted-Average Exercise Price, Ending Balance | $134.02 |
Options Outstanding, Weighted-Average Exercise Price, Vested and exercisable | $134.02 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures [Abstract] | ' |
Weighted-Average Remaining Contractual Term, Ending Balance | '5 years 11 months 19 days |
Weighted-Average Remaining Contractual Term, Vested and exercisable | '5 years 11 months 19 days |
Aggregate Intrinsic Value, Ending Balance | $1,041,797 |
Aggregate Intrinsic Value, Vested and exercisable | $1,041,797 |
Stockholders_Equity_Summary_Of1
Stockholders' Equity - Summary Of Assumptions Used To Value Stock Option Grants Using Lattice-Binomial Model (Details) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | |
Stockholders' Equity and Stock-based Compensation Disclosure [Abstract] | ' | ' | ' | ' |
Dividend yield | 0.00% | 0.00% | 0.00% | 0.00% |
Expected volatility, minimum | ' | ' | 43.00% | 51.00% |
Expected volatility | 43.00% | 51.00% | ' | ' |
Expected volatility, maximum | ' | ' | 48.00% | 54.00% |
Risk free interest rate, minimum | ' | ' | 2.52% | 1.87% |
Risk-free interest rate | 2.52% | 2.55% | ' | ' |
Risk free interest rate, maximum | ' | ' | 2.83% | 2.55% |
Suboptimal exercise factor, minimum | 2.68 | 2.43 | 2.66 | 2.33 |
Suboptimal exercise factor, maximum | 4.57 | 3.79 | 4.57 | 3.79 |
Accumulated_Other_Comprehensiv2
Accumulated Other Comprehensive Income (Details) (USD $) | 3 Months Ended | 9 Months Ended |
In Thousands, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2014 |
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ' | ' |
Beginning balance | $6,502 | $3,575 |
Other comprehensive income before reclassifications | -4,545 | -1,368 |
Amounts reclassified from accumulated other comprehensive income | -312 | -562 |
Net increase in other comprehensive income | -4,857 | -1,930 |
Ending balance | 1,645 | 1,645 |
Foreign currency [Member] | ' | ' |
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ' | ' |
Beginning balance | 5,532 | 3,153 |
Other comprehensive income before reclassifications | -4,354 | -1,975 |
Amounts reclassified from accumulated other comprehensive income | 0 | 0 |
Net increase in other comprehensive income | -4,354 | -1,975 |
Ending balance | 1,178 | 1,178 |
Change in unrealized gains on available-for-sale securities [Member] | ' | ' |
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ' | ' |
Beginning balance | 970 | 422 |
Other comprehensive income before reclassifications | -191 | 607 |
Amounts reclassified from accumulated other comprehensive income | -312 | -562 |
Net increase in other comprehensive income | -503 | 45 |
Ending balance | $467 | $467 |
Income_Taxes_Details
Income Taxes (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||||
In Millions, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Mar. 31, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Dec. 31, 2013 |
Income Tax Disclosure [Abstract] | ' | ' | ' | ' | ' | ' |
Effective tax rates | 39.00% | 36.00% | ' | 40.00% | 34.00% | ' |
2012 Federal R&D credit recognized | ' | ' | $3.10 | ' | ' | ' |
Unrecognized tax benefits | 83.1 | ' | ' | 83.1 | ' | 68.2 |
Reduction in provision for income taxes due to impact of effective tax rate | 68.6 | ' | ' | 68.6 | ' | ' |
Gross interest and penalties accrued | 4.6 | ' | ' | 4.6 | ' | ' |
Deferred tax assets, other current assets | 14.9 | ' | ' | 14.9 | ' | 21.5 |
Deferred tax assets, other non-current assets | 113.2 | ' | ' | 113.2 | ' | 69.1 |
Income tax benefits attributable to the exercise of employee stock options recorded directly to Additional paid-in-capital | $21 | $19.70 | ' | $68.10 | $51.10 | ' |
Commitments_and_Contingencies_1
Commitments and Contingencies - Streaming Content - Narrative (Details) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
Contractual Obligation [Line Items] | ' | ' |
Total streaming content obligations | $8,857,227,000 | $7,252,161,000 |
Unrecorded streaming obligations | 5,300,000,000 | 4,200,000,000 |
Current Content Liabilities [Member] | ' | ' |
Contractual Obligation [Line Items] | ' | ' |
Recorded streaming obligations | 2,100,000,000 | 1,800,000,000 |
Non-current Content Liabilities [Member] | ' | ' |
Contractual Obligation [Line Items] | ' | ' |
Recorded streaming obligations | $1,500,000,000 | $1,300,000,000 |
Commitments_and_Contingencies_2
Commitments and Contingencies - Expected Timing Of Payments For Commitments (Details) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Commitments and Contingencies Disclosure [Abstract] | ' | ' |
Less than one year | $3,574,129 | $2,972,325 |
Due after one year and through 3 years | 4,176,621 | 3,266,907 |
Due after 3 years and through 5 years | 1,071,238 | 929,645 |
Due after 5 years | 35,239 | 83,284 |
Total streaming content obligations | $8,857,227 | $7,252,161 |
Commitments_and_Contingencies_3
Commitments and Contingencies - Legal Proceedings - Narrative (Details) (Pending Litigation [Member]) | Apr. 02, 2012 | Feb. 29, 2012 | Feb. 24, 2012 | Feb. 13, 2012 | Jan. 27, 2012 | Jan. 13, 2012 | 2-May-12 | Feb. 09, 2012 | Nov. 23, 2011 |
United States District Court for the Northern District of California [Member] | United States District Court for the Northern District of California [Member] | United States District Court for the Northern District of California [Member] | United States District Court for the Northern District of California [Member] | United States District Court for the Northern District of California [Member] | United States District Court for the Northern District of California [Member] | Superior Court of California, Santa Clara County [Member] | Superior Court of California, Santa Clara County [Member] | Superior Court of California, Santa Clara County [Member] | |
lawsuits_filed | lawsuits_filed | lawsuits_filed | lawsuits_filed | lawsuits_filed | lawsuits_filed | lawsuits_filed | lawsuits_filed | lawsuits_filed | |
Loss Contingencies [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Loss Contingency, Pending Claims, Number | 1 | 1 | 1 | 1 | 1 | 1 | 1 | 1 | 1 |
Segment_Information_Narrative_
Segment Information - Narrative (Details) | 9 Months Ended |
Sep. 30, 2014 | |
segment | |
Segment Reporting [Abstract] | ' |
Number of Operating Segments | 3 |
Segment_Information_Longlived_
Segment Information - Long-lived Assets by Geographical Areas (Details) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
United States [Member] | ' | ' |
Revenues from External Customers and Long-Lived Assets [Line Items] | ' | ' |
Long-Lived Assets | $131,839 | $126,455 |
International [Member] | ' | ' |
Revenues from External Customers and Long-Lived Assets [Line Items] | ' | ' |
Long-Lived Assets | $12,308 | $7,150 |
Segment_Information_Informatio
Segment Information - Information On Reportable Segments And Reconciliation To Consolidated Net Income (Details) (USD $) | 3 Months Ended | 9 Months Ended | |||||||
In Thousands, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Dec. 31, 2013 | ||||
subscription | subscription | subscription | subscription | ||||||
Segment Reporting Information [Line Items] | ' | ' | ' | ' | ' | ||||
Total members at end of period | 0 | [1] | 0 | [1] | 0 | [1] | 0 | [1] | ' |
Revenues | $1,409,432 | $1,105,999 | $4,019,928 | $3,199,332 | ' | ||||
Cost of revenues | 954,394 | 798,900 | 2,738,428 | 2,296,526 | ' | ||||
Marketing | 145,654 | 108,228 | 403,515 | 341,925 | ' | ||||
Contribution profit (loss) | 309,384 | 198,871 | 877,985 | 560,881 | ' | ||||
Other operating expenses | 198,977 | 141,751 | 540,383 | 414,822 | ' | ||||
Operating income | 110,407 | 57,120 | 337,602 | 146,059 | ' | ||||
Other income (expense) | -12,870 | -7,629 | -33,749 | -48,989 | ' | ||||
Provision for income taxes | 38,242 | 17,669 | 120,425 | 33,088 | ' | ||||
Net income | 59,295 | 31,822 | 183,428 | 63,982 | ' | ||||
Amortization of content library | 704,423 | 570,940 | 1,977,239 | 1,602,876 | ' | ||||
Total content library, net | 4,638,863 | ' | 4,638,863 | ' | 3,797,492 | ||||
Domestic Streaming [Member] | ' | ' | ' | ' | ' | ||||
Segment Reporting Information [Line Items] | ' | ' | ' | ' | ' | ||||
Total members at end of period | 37,219,000 | [1] | 31,092,000 | [1] | 37,219,000 | [1] | 31,092,000 | [1] | ' |
Revenues | 877,150 | 701,083 | 2,513,992 | 2,010,821 | ' | ||||
Cost of revenues | 565,251 | 473,965 | 1,628,568 | 1,366,897 | ' | ||||
Marketing | 61,045 | 60,637 | 206,030 | 194,779 | ' | ||||
Contribution profit (loss) | 250,854 | 166,481 | 679,394 | 449,145 | ' | ||||
Amortization of content library | 433,266 | 363,787 | 1,229,477 | 1,043,976 | ' | ||||
Total content library, net | 3,334,646 | ' | 3,334,646 | ' | 2,973,023 | ||||
International Streaming [Member] | ' | ' | ' | ' | ' | ||||
Segment Reporting Information [Line Items] | ' | ' | ' | ' | ' | ||||
Total members at end of period | 15,843,000 | [1] | 9,188,000 | [1] | 15,843,000 | [1] | 9,188,000 | [1] | ' |
Revenues | 345,685 | 183,051 | 920,264 | 490,972 | ' | ||||
Cost of revenues | 291,942 | 209,811 | 803,906 | 561,103 | ' | ||||
Marketing | 84,609 | 47,537 | 197,485 | 146,919 | ' | ||||
Contribution profit (loss) | -30,866 | -74,297 | -81,127 | -217,050 | ' | ||||
Amortization of content library | 252,888 | 189,607 | 696,449 | 505,408 | ' | ||||
Total content library, net | 1,276,686 | ' | 1,276,686 | ' | 804,690 | ||||
Domestic DVD [Member] | ' | ' | ' | ' | ' | ||||
Segment Reporting Information [Line Items] | ' | ' | ' | ' | ' | ||||
Total members at end of period | 5,986,000 | [1] | 7,148,000 | [1] | 5,986,000 | [1] | 7,148,000 | [1] | ' |
Revenues | 186,597 | 221,865 | 585,672 | 697,539 | ' | ||||
Cost of revenues | 97,201 | 115,124 | 305,954 | 368,526 | ' | ||||
Marketing | 0 | 54 | 0 | 227 | ' | ||||
Contribution profit (loss) | 89,396 | 106,687 | 279,718 | 328,786 | ' | ||||
Amortization of content library | 18,269 | 17,546 | 51,313 | 53,492 | ' | ||||
Total content library, net | $27,531 | ' | $27,531 | ' | $19,779 | ||||
[1] | A membership (also referred to as a subscription) is defined as the right to receive either the Netflix streaming service or Netflix DVD service. Memberships are assigned to territories based on the geographic location used at time of sign up as determined by the Company's internal systems, which utilize industry standard geo-location technology. The Company offers free-trial memberships to new and certain rejoining members. For inclusion in the definition of a member in the above metrics, a method of payment is required to be provided even during the free-trial period. Total members therefore include those who are on a free-trial and have provided a method of payment. A membership is canceled and ceases to be reflected in the above metrics as of the effective cancellation date. Voluntary cancellations become effective at the end of the prepaid membership period, while involuntary cancellation of the service, as a result of a failed method of payment, becomes effective immediately. |