NFLX · 10-Q · 2026Q2 · Full report

Operating Expense Trends

NETFLIX INC · 2026-07-17 · Importance 48 · Surprise 40 · In source text

Second-quarter sales and marketing expense increased $111 million, or 15%, to $824 million, driven by $71 million of additional marketing expense and $47 million of higher personnel costs from advertising-sales headcount growth. Six-month sales and marketing expense increased $264 million, or 19%, to $1.666 billion, including $184 million of additional marketing expense and $95 million of higher personnel costs. Second-quarter technology and development expense increased $183 million, or 22%, to $1.008 billion, primarily due to $142 million of higher personnel-related costs. Six-month general and administrative expense increased $239 million, or 28%, to $1.101 billion, driven by $105 million of higher personnel costs and $107 million of higher third-party expenses, including legal fees and WBD transaction costs.

Key facts

• Cost of revenues for the three months ended June 30, 2026: $6,036,965 (in thousands). source
• Cost of revenues for the three months ended June 30, 2026: $6,036,965 thousand. source
• Cost of revenues for the six months ended June 30, 2026: $11,925,203 thousand. source
• Sales and marketing expense for the three months ended June 30, 2026: $823,838 thousand, an increase of $110,573 thousand versus prior year quarter. source
• Operating lease right-of-use assets, net as of June 30, 2026: $2,037,542 (in thousands); total operating lease liabilities as of June 30, 2026: $2,330,421 (in thousands). source
• General and administrative expense for the three months ended June 30, 2026: $498,850 thousand, an increase of $57,637 thousand versus prior year quarter. source
• The increase in sales and marketing expenses for the six months ended June 30, 2026 was primarily driven by a $184 million increase in marketing expenses and a $95 million increase in personnel-related costs. source
• General and administrative expenses increased by $238,784 thousand for the six months ended June 30, 2026 versus the six months ended June 30, 2025, primarily due to a $105 million increase in personnel-related costs and a $107 million increase in third-party expenses driven by higher legal fees and transaction-related costs, including those associated with the WBD transaction. source

Impact estimates