NFLX · 10-Q · 2026Q2 · Full report

FX / Currency Impact

NETFLIX INC · 2026-07-17 · Importance 13 · Surprise 6 · In source text

Netflix manages foreign-exchange exposure with cash-flow, fair-value, and net-investment hedges covering aggregate foreign-exchange derivative notionals of approximately $27.5 billion as of June 30, 2026. The company also had approximately $1.9 billion of Euro-denominated senior notes designated as hedges of its net investment in foreign subsidiaries and approximately $2.8 billion of Euro-denominated debt designated in fair-value hedges. Six-month 2026 foreign-exchange cash-flow hedge gains recognized in accumulated other comprehensive income were $505.4 million, compared with a $1.7 billion loss in the prior-year period, while $180.1 million was reclassified from AOCI into revenue. These instruments are intended to reduce earnings and cash-flow volatility from currency fluctuations across Netflix’s international operations.

Key facts

• Net notional amount of derivatives designated as hedging instruments (foreign exchange cash flow hedges) as of June 30, 2026: $23,238,784 (in thousands). source
• A portion of outstanding Notes is denominated in foreign currency comprised of €4,700 million. source
• As of June 30, 2026, the carrying amount of Euro-denominated Senior Notes designated as hedges of the foreign exchange risk of the Company’s net investment in certain foreign subsidiaries was approximately $1.9 billion. source
• As of June 30, 2026, the carrying amount of the Company’s Euro-denominated Senior Notes designated as hedged items in fair value hedges was approximately $2.8 billion (and $2.9 billion as of December 31, 2025). source
• For the six months ended June 30, 2026, constant currency adjustment reduced reported total revenues by $714,699 thousand and hedging gains of $180,147 thousand were excluded to yield constant currency revenues of $24,275,143 thousand. source
• Pre-tax net accumulated gain on foreign currency cash flow hedges included in AOCI expected to be recognized in earnings within the next 12 months as of June 30, 2026: $ million (value not provided in the MD&A). source
• Foreign exchange contracts reclassified from AOCI to provision for income taxes for the six months ended June 30, 2026: $138,480 thousand (from cash flow hedging relationship) and $5,699 thousand (from fair value hedging relationship amortization), total tax reclassification benefit $47,353 thousand net. source
• Interest and other income (expense) for the three months ended June 30, 2026: $51,661 thousand, an increase of $12,031 thousand versus the three months ended June 30, 2025. source

Impact estimates