Exhibit 99.1
| FOR IMMEDIATE RELEASE | IR CONTACT: | Deborah Crawford | ||||
| Monday, July 24, 2006 | Director, Investor Relations | |||||
| 408 540-3712 | ||||||
| PR CONTACT: | Ken Ross | |||||
| VP, Corporate Communications | ||||||
| 408 540-3931 | ||||||
Netflix Announces Q2 2006 Financial Results
Subscribers – 5.2 million
Revenue — $239.4 million
GAAP Net Income - $16.8 million
LOS GATOS, Calif., July 24, 2006 – Netflix, Inc. (Nasdaq: NFLX) today reported results for the second quarter ended June 30, 2006.
“In the second quarter, Netflix demonstrated solid progress toward our goals of 20 million subscribers by 2010 to 2012 and 50 percent year-over-year earnings growth for the next several years,” said Reed Hastings, Netflix co-founder and chief executive officer.
“Our industry-leading customer service and selection attracted new subscribers at an increasing rate and we achieved 62% year-over-year subscriber growth despite a modest seasonal uptick in churn. Our strong performance in the first half of the year demonstrates the power of our business model and positions us to hit our full-year goals for both subscribers and earnings.”
Second-Quarter 2006 Financial Highlights
Revenue1 for the second quarter of 2006 was $239.4 million, representing 46 percent year-over-year growth from $164.0 million for the second quarter of 2005, and 7 percent sequential growth from $224.1 million for the first quarter of 2006.
GAAP net income for the second quarter of 2006 was $16.8 million, or $0.24 per diluted share, compared to GAAP net income of $5.7 million, or $0.09 per share, for the second quarter of 2005 and GAAP net income of $4.4 million, or $0.07 per diluted share, for the first quarter of 2006. GAAP net income for 2006 is a fully taxed number while 2005 was not. On a pretax basis2, the second quarter profit was an all-time record.
| 1 | The Company had previously recorded proceeds from sales of previously viewed DVDs and the related cost of DVDs sales as Sales revenue and Cost of sales revenue, respectively. The Company now records the net gain on sales of DVDs as a separate line item on the income statement. In the second quarter of 2006, sales from previously viewed DVDs was $2.8 million, compared to $0.5 million in the second quarter of 2005 and compared to $2.5 million in the first quarter of 2006. The cost of sales revenues for the second quarter of 2006 was $1.8 million, compared to $0.4 million in the second quarter of 2005 and compared to $1.1 million in the first quarter of 2006. |
| 2 | Pretax income is defined as income before income taxes as shown on the Company’s Statement of Operations, which line item includes stock-based compensation expense. |
Non-GAAP net income was $18.7 million, or $0.27 per diluted share, for the second quarter of 2006, compared to non-GAAP net income of $9.1 million, or $0.14 per share, for the second quarter of 2005 and non-GAAP net income of $6.4 million, or $0.10 per diluted share, for the first quarter of 2006.
Non-GAAP net income equals net income on a GAAP basis before stock-based compensation expense, net of taxes.
Gross margin3 for the second quarter of 2006 was 37.1 percent, compared to 28.2 percent for the second quarter of 2005 and 33.8 percent for the first quarter of 2006.
Stock-based compensation. In accordance with SEC Staff Accounting Bulletin No. 107, stock-based compensation is no longer presented as a separate line item on our income statement. Stock-based compensation is now presented in the same lines as cash compensation paid to the same individuals. Stock-based compensation recognized in prior periods has been reclassified to conform with the presentation in the current period. In the second quarter, the charge related to stock-based compensation was $3.1 million, compared to $3.4 million in the second quarter of 2005 and compared to $3.3 million in the first quarter of 2006.
Free cash flow4 for the second quarter of 2006 was positive $5.5 million, compared to positive $1.8 million in the second quarter of 2005 and positive $11.7 million for the first quarter of 2006.
Cash provided by operating activities for the second quarter of 2006 was $46.3 million, compared to $36.5 million for the second quarter of 2005 and $57.6 million for the first quarter of 2006.
Subscriber acquisition cost5 for the second quarter of 2006 was $43.95 per gross subscriber addition, compared to $38.13 for the same period of 2005 and $38.47 for the first quarter of 2006.
Churn6 for the second quarter of 2006 was 4.3 percent, compared to 4.7 percent for the second quarter of 2005 and 4.1 percent for the first quarter of 2006. Churn includes free subscribers as well as paying subscribers who elect not to renew their monthly subscription service during the quarter.
Subscribers. Netflix ended the second quarter of 2006 with approximately 5,169,000 total subscribers, representing 62 percent year-over-year growth from 3,196,000 total subscribers at the end of the second quarter of 2005 and 6 percent sequential growth from 4,866,000 subscribers at the end of the first quarter of 2006.
Net subscriber additions in the quarter were 303,000, compared to 178,000 for the same period of 2005 and 687,000 for the first quarter of 2006.
During the quarter Netflix acquired 1,070,000 gross subscriber additions, representing 51 percent year-over-year growth from 707,000 gross subscriber additions in the second quarter of 2005 and 22 percent quarter-over-quarter decline from 1,377,000 gross subscriber additions in the first quarter of 2006.
Of the 5,169,000 total subscribers at quarter end, 97 percent, or 5,017,000, were paid subscribers. The other 3 percent, or 152,000, were free subscribers. Paid subscribers represented 97 percent of total subscribers at the end of the second quarter of 2005 and the first quarter of 2006.
| 3 | Gross margin is defined as revenue less cost of subscription and fulfillment expense. The Company had previously recorded fulfillment expense as an operating expense. |
| 4 | Free cash flow is defined as cash provided by operating activities less cash used in investing activities excluding purchases and sales of short-term investments. |
| 5 | Subscriber acquisition cost is defined as the total marketing expense, which includes stock-based compensation for marketing personnel, on the Company’s Statement of Operations divided by total gross subscriber additions during the quarter. |
| 6 | Churn is defined as customer cancellations in the quarter divided by the sum of beginning subscribers and gross subscriber additions, divided by three months. |
Business Outlook
The Company’s performance expectations for the third and fourth quarters of 2006 and full-year 2006 are as follows:
Third-Quarter 2006
| • | Ending subscribers of 5.5 million to 5.7 million |
| • | Revenue of $249 million to $254 million |
| • | GAAP net income of $5 million to $10 million |
Fourth-Quarter 2006
| • | Ending subscribers of at least 6.3 million |
| • | Revenue of $267 million to $272 million |
| • | GAAP net income of $3.8 million to $8.8 million |
Full-Year 2006
| • | Ending subscribers of at least 6.3 million |
| • | Revenue of at least $980 million |
| • | GAAP net income of $30 million to $35 million |
Float and Trading Plans
The Company estimates the public float at approximately 54,880,404 shares as of June 30, 2006, up 11 percent from 49,500,883 shares as of March 31, 2006, based on registered shares held in street name with the Depository Trust and Clearing Corporation. From time to time executive officers of Netflix may elect to buy or sell stock in Netflix. All open market sales are made pursuant to the terms of 10b5-1 Trading Plans approved by the Company and generally adopted no less than three months prior to the first date of sale under such plan.
Earnings Call
The Netflix earnings call will be webcast today at 5:00 p.m. Eastern Time / 2:00 p.m. Pacific Time, and may be accessed athttp://ir.netflix.com. Following the conclusion of the webcast, a replay of the call will be available via Netflix’s website athttp://ir.netflix.com. For those without access to the Internet, a replay of the call will be available from approximately 5:00 p.m. Pacific Time on July 24, 2006 through July 30, 2006. To listen to a replay, call (719) 457-0820, access code 4975362.
Use of Non-GAAP Measures
Management believes that non-GAAP net income is a useful measure of operating performance because it excludes the non-cash impact of stock option accounting, and, where specified, excludes the benefit of the realized tax assets. In addition, management believes that free cash flow is a useful measure of liquidity because it excludes the non-operational cash flows from purchases and sales of short-term investments and cash flows from financing activities. However, these non-GAAP measures should be considered in addition to, not as a substitute for or superior to, net income and net cash provided by operating activities, or other financial measures prepared in accordance with GAAP. A reconciliation to the GAAP equivalents of these non-GAAP measures is contained in tabular form on the attached unaudited financial statements.
About Netflix
Netflix (Nasdaq: NFLX) is the world’s largest online movie rental service, providing more than five million subscribers access to over 60,000 DVD titles. The company offers a variety of subscription plans, starting at $5.99 a month. There are no due dates, no late fees and no shipping fees. DVDs are delivered for free by the USPS from regional shipping centers located throughout the United States. Netflix can reach more than 90 percent of its subscribers with generally one business-day delivery. Netflix offers personalized movie recommendations to its members and has more than one billion movie ratings. Netflix also allows members to share and recommend movies to one another through its FriendsSM feature. For more information, visitwww.netflix.com.
Forward-Looking Statements
This press release contains certain forward-looking statements within the meaning of the federal securities laws, including statements regarding our subscriber growth, revenue and GAAP net income for the third and fourth quarters of 2006 as well as subscriber growth, revenue and GAAP net income for the full-year 2006. The forward-looking statements in this release are subject to risks and uncertainties that could cause actual results and events to differ, including, without limitation: impacts arising out of competition, our ability to manage our growth, in particular, managing our subscriber acquisition cost as well as the mix between revenue sharing titles and titles not subject to revenue sharing that are delivered to our subscribers; our ability to attract new subscribers and retain existing subscribers; changes in pricing, availability and effectiveness related to our advertising; fluctuations in consumer usage of our service, customer spending on DVDs and related products; disruption in service on our website or with our computer systems; deterioration of the U.S. economy or conditions specific to online commerce or the filmed entertainment industry; conditions that effect our delivery through the U.S. Postal Service, including regulatory changes and increases in first class postage; increases in the costs of acquiring DVDs; and, widespread consumer adoption of different modes of viewing in-home filmed entertainment. A detailed discussion of these and other risks and uncertainties that could cause actual results and events to differ materially from such forward-looking statements is included in our filings with the Securities and Exchange Commission, including our Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 16, 2006. We undertake no obligation to update forward-looking statements to reflect events or circumstances occurring after the date of this press release.
Netflix, Inc.
Consolidated Statements of Operations
(unaudited)
(in thousands, except per share data)
| Three Months Ended | Six Months Ended | |||||||||||||||||||
| June 30, 2005 | March 31, 2006 | June 30, 2006 | June 30, 2005 | June 30, 2006 | ||||||||||||||||
Revenues | $ | 164,027 | $ | 224,126 | $ | 239,351 | $ | 316,473 | $ | 463,477 | ||||||||||
Cost of revenues: | ||||||||||||||||||||
Subscription | 99,957 | 126,220 | 128,605 | 193,943 | 254,825 | |||||||||||||||
Fulfillment expenses* | 17,892 | 22,045 | 21,974 | 35,027 | 44,019 | |||||||||||||||
Total cost of revenues | 117,849 | 148,265 | 150,579 | 228,970 | 298,844 | |||||||||||||||
Gross profit | 46,178 | 75,861 | 88,772 | 87,503 | 164,633 | |||||||||||||||
Operating expenses: | ||||||||||||||||||||
Technology and development * | 8,648 | 11,206 | 12,043 | 17,214 | 23,249 | |||||||||||||||
Marketing * | 26,959 | 52,968 | 47,031 | 63,508 | 99,999 | |||||||||||||||
General and administrative * | 6,233 | 8,292 | 7,174 | 12,921 | 15,466 | |||||||||||||||
Gain on disposal of DVDs | (116 | ) | (1,387 | ) | (964 | ) | (811 | ) | (2,351 | ) | ||||||||||
Total operating expenses | 41,724 | 71,079 | 65,284 | 92,832 | 136,363 | |||||||||||||||
Operating income (loss) | 4,454 | 4,782 | 23,488 | (5,329 | ) | 28,270 | ||||||||||||||
Other income (expense): | ||||||||||||||||||||
Interest and other income | 1,246 | 2,452 | 3,698 | 2,297 | 6,150 | |||||||||||||||
Interest and other expense | (3 | ) | — | — | (41 | ) | — | |||||||||||||
Income (loss) before income taxes | 5,697 | 7,234 | 27,186 | (3,073 | ) | 34,420 | ||||||||||||||
Provision for income taxes | 13 | 2,830 | 10,387 | 57 | 13,217 | |||||||||||||||
Net income (loss) | $ | 5,684 | $ | 4,404 | $ | 16,799 | $ | (3,130 | ) | $ | 21,203 | |||||||||
Net income (loss) per share: | ||||||||||||||||||||
Basic | $ | .11 | $ | .08 | $ | .29 | $ | (.06 | ) | $ | .37 | |||||||||
Diluted | $ | .09 | $ | .07 | $ | .24 | $ | (.06 | ) | $ | .31 | |||||||||
Weighted average common shares outstanding: | ||||||||||||||||||||
Basic | 53,190 | 55,213 | 58,383 | 53,005 | 56,808 | |||||||||||||||
Diluted | 64,592 | 66,456 | 69,175 | 53,005 | 67,813 | |||||||||||||||
Amortization of stock-based compensation included in expense line items: | ||||||||||||||||||||
Fulfillment | $ | 332 | $ | 260 | $ | 223 | $ | 773 | $ | 483 | ||||||||||
Technology and development | 1,135 | 965 | 867 | 2,546 | 1,832 | |||||||||||||||
Marketing | 621 | 554 | 529 | 1,367 | 1,083 | |||||||||||||||
General and administrative | 1,335 | 1,531 | 1,468 | 3,016 | 2,999 | |||||||||||||||
| $ | 3,423 | $ | 3,310 | $ | 3,087 | $ | 7,702 | $ | 6,397 | |||||||||||
Reconciliation of Non-GAAP Financial Measures | ||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||
Non-GAAP net income reconciliation: | ||||||||||||||||||||
Net income (loss) | $ | 5,684 | $ | 4,404 | $ | 16,799 | $ | (3,130 | ) | $ | 21,203 | |||||||||
Add back: | ||||||||||||||||||||
Stock-based compensation | 3,423 | 3,310 | 3,087 | 7,702 | 6,397 | |||||||||||||||
Income tax effect of stock-based compensation | — | (1,294 | ) | (1,179 | ) | — | (2,473 | ) | ||||||||||||
Non-GAAP net income | $ | 9,107 | $ | 6,420 | $ | 18,707 | $ | 4,572 | $ | 25,127 | ||||||||||
Non-GAAP net income per share: | ||||||||||||||||||||
Basic | $ | .17 | $ | .12 | $ | .32 | $ | .09 | $ | .44 | ||||||||||
Diluted | $ | .14 | $ | .10 | $ | .27 | $ | .07 | $ | .37 | ||||||||||
Weighted average common shares outstanding: | ||||||||||||||||||||
Basic | 53,190 | 55,213 | 58,383 | 53,005 | 56,808 | |||||||||||||||
Diluted | 64,592 | 66,456 | 69,175 | 64,122 | 67,813 | |||||||||||||||
| * | Stock-based compensation recognized in the three and six months ended June 30, 2005 has been reclassed to this expense line to conform with the current period presentation. |
Netflix, Inc.
Consolidated Balance Sheets
(unaudited)
(in thousands, except share and par value data)
| As of | ||||||||
| December 31, 2005 | June 30, 2006 | |||||||
Assets | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 212,256 | $ | 341,702 | ||||
Prepaid expenses | 7,848 | 5,956 | ||||||
Prepaid revenue sharing expenses | 5,252 | 6,055 | ||||||
Deferred tax assets | 13,666 | 6,943 | ||||||
Other current assets | 4,669 | 9,545 | ||||||
Total current assets | 243,691 | 370,201 | ||||||
DVD library, net | 57,032 | 79,030 | ||||||
Intangible assets, net | 457 | 1,019 | ||||||
Property and equipment, net | 40,213 | 41,607 | ||||||
Deposits | 1,249 | 1,136 | ||||||
Deferred tax assets | 21,239 | 18,788 | ||||||
Other assets | 800 | 1,130 | ||||||
Total assets | $ | 364,681 | $ | 512,911 | ||||
Liabilities and Stockholders’ Equity | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 63,491 | $ | 70,785 | ||||
Accrued expenses | 25,563 | 25,992 | ||||||
Deferred revenue | 48,533 | 49,029 | ||||||
Total current liabilities | 137,587 | 145,806 | ||||||
Deferred rent | 842 | 1,031 | ||||||
Total liabilities | 138,429 | 146,837 | ||||||
Stockholders’ equity: | ||||||||
Common stock, $0.001 par value; 160,000,000 shares authorized at December 31, 2005 and June 30, 2006; 54,755,731 and 67,936,774 issued and outstanding at December 31, 2005 and June 30, 2006, respectively | 55 | 68 | ||||||
Additional paid-in capital | 315,868 | 434,474 | ||||||
Accumulated deficit | (89,671 | ) | (68,468 | ) | ||||
Total stockholders’ equity | 226,252 | 366,074 | ||||||
Total liabilities and stockholders’ equity | $ | 364,681 | $ | 512,911 | ||||
Netflix, Inc.
Consolidated Statements of Cash Flows
(unaudited)
(in thousands)
| Three Months Ended | Six Months Ended | |||||||||||||||||||
| June 30, 2005 | March 31, 2006 | June 30, 2006 | June 30, 2005 | June 30, 2006 | ||||||||||||||||
Cash flows from operating activities: | ||||||||||||||||||||
Net income (loss) | $ | 5,684 | $ | 4,404 | $ | 16,799 | $ | (3,130 | ) | $ | 21,203 | |||||||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||||||||||||||
Depreciation of property and equipment | 2,156 | 3,609 | 3,854 | 4,094 | 7,463 | |||||||||||||||
Amortization of DVD library | 25,552 | 27,281 | 31,910 | 47,558 | 59,191 | |||||||||||||||
Amortization of intangible assets | 380 | 12 | 11 | 834 | 23 | |||||||||||||||
Stock-based compensation expense | 3,423 | 3,310 | 3,087 | 7,702 | 6,397 | |||||||||||||||
Excess tax benefits from stock-based compensation | — | (690 | ) | (2,910 | ) | — | (3,600 | ) | ||||||||||||
Loss on disposal of property and equipment | — | (23 | ) | — | — | (23 | ) | |||||||||||||
Gain on disposal of DVDs | (208 | ) | (2,049 | ) | (2,029 | ) | (1,337 | ) | (4,078 | ) | ||||||||||
Noncash interest expense | — | — | — | 11 | — | |||||||||||||||
Deferred taxes | — | 2,058 | 7,116 | — | 9,174 | |||||||||||||||
Changes in operating assets and liabilities: | ||||||||||||||||||||
Prepaid expenses and other current assets | (3,219 | ) | 2,304 | (6,091 | ) | 1,452 | (3,787 | ) | ||||||||||||
Accounts payable | 3,579 | 14,505 | (7,211 | ) | 6,436 | 7,294 | ||||||||||||||
Accrued expenses | (1,979 | ) | 3,439 | 590 | 571 | 4,029 | ||||||||||||||
Deferred revenue | 1,034 | (608 | ) | 1,104 | 1,561 | 496 | ||||||||||||||
Deferred rent | 92 | 70 | 119 | 185 | 189 | |||||||||||||||
Net cash provided by operating activities | 36,494 | 57,622 | 46,349 | 65,937 | 103,971 | |||||||||||||||
Cash flows from investing activities: | ||||||||||||||||||||
Purchases of property and equipment | (5,931 | ) | (3,484 | ) | (5,373 | ) | (12,776 | ) | (8,857 | ) | ||||||||||
Acquisition of intangible asset | — | — | (585 | ) | — | (585 | ) | |||||||||||||
Acquisitions of DVD library | (29,218 | ) | (44,676 | ) | (37,669 | ) | (62,258 | ) | (82,345 | ) | ||||||||||
Proceeds from sale of DVDs | 470 | 2,481 | 2,753 | 2,164 | 5,234 | |||||||||||||||
Proceeds from disposal of property and equipment | — | 23 | — | — | 23 | |||||||||||||||
Deposits and other assets | 22 | (291 | ) | 74 | (155 | ) | (217 | ) | ||||||||||||
Net cash used in investing activities | (34,657 | ) | (45,947 | ) | (40,800 | ) | (73,025 | ) | (86,747 | ) | ||||||||||
Cash flows from financing activities: | ||||||||||||||||||||
Proceeds from issuance of common stock | 3,313 | 3,144 | 105,478 | 3,678 | 108,622 | |||||||||||||||
Excess tax benefits from stock-based compensation | — | 690 | 2,910 | (79 | ) | 3,600 | ||||||||||||||
Net cash provided by financing activities | 3,313 | 3,834 | 108,388 | 3,599 | 112,222 | |||||||||||||||
Net increase (decrease) in cash and cash equivalents | 5,150 | 15,509 | 113,937 | (3,489 | ) | 129,446 | ||||||||||||||
Cash and cash equivalents, beginning of period | 165,822 | 212,256 | 227,765 | 174,461 | 212,256 | |||||||||||||||
Cash and cash equivalents, end of period | $ | 170,972 | $ | 227,765 | $ | 341,702 | $ | 170,972 | $ | 341,702 | ||||||||||
Non-GAAP free cash flow reconciliation: | ||||||||||||||||||||
Net cash provided by operating activities | $ | 36,494 | $ | 57,622 | $ | 46,349 | $ | 65,937 | $ | 103,971 | ||||||||||
Purchases of property and equipment | (5,931 | ) | (3,484 | ) | (5,373 | ) | (12,776 | ) | (8,857 | ) | ||||||||||
Acquisition of intangible asset | — | — | (585 | ) | — | (585 | ) | |||||||||||||
Acquisitions of DVD library | (29,218 | ) | (44,676 | ) | (37,669 | ) | (62,258 | ) | (82,345 | ) | ||||||||||
Proceeds from sale of DVDs | 470 | 2,481 | 2,753 | 2,164 | 5,234 | |||||||||||||||
Proceeds from disposal of property and equipment | — | 23 | — | — | 23 | |||||||||||||||
Deposits and other assets | 22 | (291 | ) | 74 | (155 | ) | (217 | ) | ||||||||||||
Non-GAAP free cash flow | $ | 1,837 | $ | 11,675 | $ | 5,549 | $ | (7,088 | ) | $ | 17,224 | |||||||||
Netflix, Inc.
Consolidated Other data
(unaudited)
(in thousands, except percentages and subscriber acquisition cost)
| As of / Three Months Ended | ||||||||||||
| June 30, 2005 | March 31, 2006 | June 30, 2006 | ||||||||||
Subscriber information: | ||||||||||||
Subscribers: beginning of period | 3,018 | 4,179 | 4,866 | |||||||||
Gross subscribers additions: during period | 707 | 1,377 | 1,070 | |||||||||
Gross subscriber additions year-to-year change | 21.3 | % | 45.7 | % | 51.3 | % | ||||||
Gross subscriber additions quarter-to-quarter sequential change | (25.2 | %) | 19.1 | % | (22.3 | %) | ||||||
Less subscriber cancellations : during period | (529 | ) | (690 | ) | (767 | ) | ||||||
Subscribers: end of period | 3,196 | 4,866 | 5,169 | |||||||||
Subscribers year-to-year change | 52.7 | % | 61.2 | % | 61.7 | % | ||||||
Subscribers quarter-to-quarter sequential change | 5.9 | % | 16.4 | % | 6.2 | % | ||||||
Free subscribers: end of period | 87 | 132 | 152 | |||||||||
Free subscribers as percentage of ending subscribers | 2.7 | % | 2.7 | % | 2.9 | % | ||||||
Paid subscribers: end of period | 3,109 | 4,734 | 5,017 | |||||||||
Paid subscribers year-to-year change | 53.6 | % | 64.0 | % | 61.4 | % | ||||||
Paid subscribers quarter-to-quarter sequential change | 7.7 | % | 17.6 | % | 6.0 | % | ||||||
Churn | 4.7 | % | 4.1 | % | 4.3 | % | ||||||
Subscriber acquisition cost - Consolidated | $ | 38.13 | $ | 38.47 | $ | 43.95 | ||||||
Margins: | ||||||||||||
Gross margin | 28.2 | % | 33.8 | % | 37.1 | % | ||||||
Operating margin | 2.8 | % | 2.1 | % | 9.8 | % | ||||||
Net margin | 3.5 | % | 2.0 | % | 7.0 | % | ||||||
Expenses as percentage of revenues: | ||||||||||||
Technology and development | 5.3 | % | 5.0 | % | 5.0 | % | ||||||
Marketing | 16.4 | % | 23.6 | % | 19.6 | % | ||||||
General and administrative | 3.8 | % | 3.7 | % | 3.0 | % | ||||||
Gain on disposal of DVDs | (0.1 | )% | (0.6 | )% | (0.3 | )% | ||||||
Total operating expenses | 25.4 | % | 31.7 | % | 27.3 | % | ||||||
Year-to-year change: | ||||||||||||
Total revenues | 37.0 | % | 47.0 | % | 45.9 | % | ||||||
Fulfillment | 20.6 | % | 28.7 | % | 22.8 | % | ||||||
Technology and development | 15.0 | % | 30.8 | % | 39.3 | % | ||||||
Marketing | 28.0 | % | 44.9 | % | 74.5 | % | ||||||
General and administrative | 38.5 | % | 24.0 | % | 15.1 | % | ||||||
Gain on disposal of DVDs | (72.8 | %) | 99.6 | % | 731.0 | % | ||||||
Total operating expenses | 27.8 | % | 39.1 | % | 56.5 | % | ||||||