NFLXNEUTRAL

NFLX Gross Margin Analysis

51.9%

Higher than 40% of Communication Services sector peers

Updated 225h ago·SEC filings & market data

Key Takeaway

Gross margin is the percentage of revenue left after paying the direct costs of producing content, so a 51.9% figure means Netflix keeps about 52 cents from every dollar of sales before other expenses.

Sector Performance

40th percentile

NFLX

51.9%

Sector Median

53.0%

Sector Avg

53.0%

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Deep Analysis

That level sits below the Communication Services sector median of 57.8%, placing Netflix at the 29th percentile among its sector peers—meaning roughly seven out of ten comparable companies have a higher gross margin. The trend direction is N/A, with both the year-over-year change and quarter-over-quarter change listed as N/A, so there is no available data to confirm whether margin is improving or deteriorating. A below-median margin combined with an unknown trend introduces uncertainty, but it does not signal an immediate red flag by itself. This metric slightly works against the overall NEUTRAL verdict because the current margin is a relative weakness, yet the lack of trend data prevents drawing a stronger conclusion. On balance, the gross margin does not contradict NEUTRAL, but it adds a cautious note rather than supporting a positive case.

Frequently Asked Questions

What does the Gross Margin tell investors about NFLX?

Gross margin reveals pricing power and cost structure. Software companies often sustain 70–80%; manufacturers typically 30–50%. Expansion is a bullish signal.

How is the Gross Margin calculated?

Gross Margin is calculated as: Gross Profit / Revenue.

How does NFLX's Gross Margin compare to its sector?

NFLX's Gross Margin of 51.9% compares to a Communication Services sector median of 53.0%, placing it in the 40th percentile.

Who are NFLX's closest peers by Gross Margin?

The closest Communication Services peers by Gross Margin include: TWTR (54.0%), GOOGL (61.6%), BIDU (38.9%), VOD (30.5%), META (81.4%).

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Learn More About Gross Margin

Gross Margin vs Net Margin: Why the Gap Between Them Tells You Everything

Gross margin vs net margin: learn what the spread between them reveals about operating leverage, cost structure, and early warning signs in any stock.

The Formula

Gross Profit / Revenue

Why It Matters

Gross margin reveals pricing power and cost structure. Software companies often sustain 70–80%; manufacturers typically 30–50%. Expansion is a bullish signal.

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Closest Sector Peers