NetFlix 2006 Annual Report Download - page 58

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NETFLIX, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
Year Ended December 31,
2004 2005 2006
Revenues ...................................................... $500,611 $682,213 $996,660
Cost of revenues:
Subscription ................................................ 273,401 393,788 532,621
Fulfillment expenses* ........................................ 58,311 71,987 94,364
Total cost of revenues .................................... 331,712 465,775 626,985
Gross profit ..................................................... 168,899 216,438 369,675
Operating expenses:
Technology and development* ................................. 29,467 35,388 48,379
Marketing* ................................................. 100,534 144,562 225,524
General and administrative* ................................... 22,104 35,486 36,155
Gain on disposal of DVDs ..................................... (2,560) (1,987) (4,797)
Total operating expenses .................................. 149,545 213,449 305,261
Operating income ................................................ 19,354 2,989 64,414
Other income (expense):
Interest and other income ...................................... 2,592 5,753 15,904
Interest and other expense ..................................... (170) (407) —
Income before income taxes ........................................ 21,776 8,335 80,318
Provision for (benefit from) income taxes ............................. 181 (33,692) 31,236
Net income ..................................................... $ 21,595 $ 42,027 $ 49,082
Net income per share:
Basic ...................................................... $ 0.42 $ 0.79 $ 0.78
Diluted .................................................... $ 0.33 $ 0.64 $ 0.71
Weighted-average common shares outstanding:
Basic ...................................................... 51,988 53,528 62,577
Diluted .................................................... 64,713 65,518 69,075
* Amortization of stock-based compensation included in expense line items:
Fulfillment ................................................. $ 1,702 $ 1,225 $ 925
Technology and development .................................. 6,561 4,446 3,608
Marketing .................................................. 2,507 2,565 2,138
General and administrative .................................... 5,817 6,091 6,025
See accompanying notes to consolidated financial statements.
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