NFLX · 10-Q · 2026Q2 · Full report

Interest Rate Exposure

NETFLIX INC · 2026-07-17 · Importance 59 · Surprise 82 · In source text

Netflix uses interest-rate swaps to reduce the fair-value impact of benchmark-rate movements on its fixed-rate debt, although the hedges do not eliminate all exposure. As of June 30, 2026, approximately $1.4 billion of senior notes was designated in interest-rate fair-value hedges, compared with no such designated notes at December 31, 2025. The swaps convert the hedged fixed-rate debt to floating-rate debt based on SOFR, increasing exposure to future changes in short-term rates. Netflix had $14.3 billion of aggregate notes outstanding, including $2.5 billion classified as short-term debt, as of June 30, 2026.

Key facts

Principal amount at par of the 4.375% Senior Notes: $1,000 (in millions), issuance October 2016, maturity November 2026; Level 2 fair value as of June 30: $1,001 (in millions). source
Aggregate outstanding notes as of June 30, 2026: $14,309 million, net of issuance costs and discounts and fair value hedging adjustments. source
As of June 30, 2026, the Company designated a portion of its 4.900% and 5.400% Senior Notes as hedged items in fair value hedging relationships using interest rate swap agreements converting fixed-rate debt to floating-rate tied to SOFR. source
Net notional amount of interest rate derivative contracts designated as fair value hedges as of June 30, 2026: $1,400,000 (in thousands). source
Interest expense for the six months ended June 30, 2026: $437,762 thousand, an increase of $70,941 thousand versus the six months ended June 30, 2025. source
Interest expense for the three months ended June 30, 2026: $175,685 thousand, a decrease of $6,964 thousand versus the three months ended June 30, 2025. source
Interest expense for the three months ended June 30, 2026: $(175,685) (in thousands). source
Interest expense, net of hedging impacts, primarily consisted of interest on our Notes of $175 million and $351 million for the three and six months ended June 30, 2026, respectively. source

Impact estimates

metric	direction	stage	expected	basis
net_income	unclear	realized	—	Net notional amount of interest rate derivative contracts designated as fair value hedges as of June 30, 2026: $1,400,000 (in thousands).