This post will examine NFLX's revenues, expenses, earnings, and give a 2026 estimate with this data.
**Revenues and expenses**
For 2026, let's see what [NFLX](https://ir.netflix.net/financials/quarterly-earnings/default.aspx) has to say.
>We continue to project 2026 revenue of $50.7-$51.7B and an operating margin of 31.5%.
Let's get to their numbers to find out what that means...
| Q | revenue | expenses | net | shares | EPS |
| :-: | :-: | :-: | :-: | :-: | :-: |
| Q1 '25 | 10'543 | 7'653 | 2'890 | 4'370 | 0.661 |
| Q2 '25 | 11'079 | 7'954 | 3'125 | 4'349 | 0.719 |
| Q3 '25 | 11'510 | 8'963 | 2'547 | 4'340 | 0.587 |
| Q4 '25 | 12'051 | 9'632 | 2'419 | 4'317 | 0.560 |
|Q1 '26 | 12'250 | 6'967 | 5'283 | 4'298 | 1.229 |
| Q2 '26 | 12'574 | 9'247 | 3'327 | *4280* | *0.777* |
The average increase in revenue per quarter is 3.45%; the increase in expenses is 5.83%; shares decrease by 0.41%.
That gives us a forecast of...
| Q | rev | exp | net | shares | eps |
| :-: | :-: | :-: | :-: | :-: | :-: |
| Q3 '26 | 13'008 | 9'786 | 3'222 | 4'262 | 0.756 |
| Q4 26 | 13'457 | 10'357 | 3'100 | 4245 | 0.730 |
For the second half of the 2026 expenses are steadily increasing, while revenue is flattening. As a result, EPS is decreasing throughout the year.
Let's go more in depth on the expenses to see where the extra costs are coming from.
**Expenses and tax breakdown**
| Q | cost of rev | sales | tech | admin | interest | tax |
| :-: | :-: | :-: | :-: | :-: | :-: | :-: |
| Q1 '25 | 5263 | 688 | 823 | 425 | 133 | (323) |
| Q2 '25 | 5325 | 713 | 825 | 441 | 143 | (506) |
| Q3 '25 | 6'164 | 786 | 854 | 458 | 139 | (563) |
| Q4 '25 | 6'523 | 1'113 | 890 | 568 | 188 | (349) |
| Q1 '26 | 5'888 | 842 | 960 | 603 | (2590) | (1264) |
Cost of revenue is increasing by 3.26% on average; sales expenses are increasing by 7.78%; technology expenses are increasing by 3.96%; administration costs are increasing by 9.45%; except for Q1 2026, interest expense on revenue is increasing by 13.32%; and, omitting the Q1 outlier, tax rebates are increasing by 9.97%.
There's a huge tax rebate and interest payment in Q1 2026 that largely decreased expenses away from the norm. They also have much lower cost of revenue compared to the trend. These are not expected to continue in Q2 2026.
| Q | cost of rev | sales | tech | admin | interest | tax |
| :-: | :-: | :-: | :-: | :-: | :-: | :-: |
| Q2 '26 | 6736 | 908 | 998 | 660 | 213 | (384) |
| Q3 '26 | 6956 | 978 | 1037 | 722 | 241 | (422) |
| Q4 '26 | 7182 | 1054 | 1079 | 791 | 274 | (464) |
As shown above, for Q2 taxes and expenses add up to $9131, which is very close to Netflix's pre-tax estimate in the first chart. Q3 sees expenses of $9512, which is also slightly lower. Lastly, Q4 has expenses of $9916 after taxes.
If we do a shares price calculation with a 30 PE multiple for the trailing 12 months...
| Q | after tax EPS | price target |
| :-: | :-: | :-: |
| Q2 '26 | 0.804 | $101.10 |
| Q3 '26 | 0.820 | $108.9 |
| Q4 '26 | 0.834 | $97.05 |
**Share prices will hit a high of $108, ending the year around the $97 mark.**
Overall, expenses are steadily rising, largely in the Cost of Revenue. If tax rebates continue or there are new interest revenues, as seen in Q1 2026, NFLX could see significant EPS beats.
Disclaimer: Short puts