NetFlix 2007 Annual Report Download - page 55

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NETFLIX, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
Year ended December 31,
2007 2006 2005
Revenues ..................................................... $1,205,340 $996,660 $682,213
Cost of revenues:
Subscription............................................... 664,407 532,621 393,788
Fulfillment expenses* . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 121,761 94,364 71,987
Total cost of revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 786,168 626,985 465,775
Grossprofit ................................................... 419,172 369,675 216,438
Operating expenses:
Technology and development* . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71,395 48,379 35,388
Marketing* ............................................... 218,280 225,524 144,562
General and administrative* . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52,532 36,155 35,486
Gain on disposal of DVDs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (7,196) (4,797) (1,987)
Gainonlegalsettlement ..................................... (7,000) — —
Total operating expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 328,011 305,261 213,449
Operatingincome .............................................. 91,161 64,414 2,989
Other income (expense):
Interest and other income (expense) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20,340 15,904 5,346
Income before income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 111,501 80,318 8,335
Provision for (benefit from) income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . 44,549 31,236 (33,692)
Netincome ................................................... $ 66,952 $ 49,082 $ 42,027
Net income per share:
Basic .................................................... $ 1.00 $ 0.78 $ 0.79
Diluted................................................... $ 0.97 $ 0.71 $ 0.64
Weighted-average common shares outstanding:
Basic .................................................... 67,076 62,577 53,528
Diluted................................................... 68,902 69,075 65,518
* Stock-based compensation included in expense line items:
Fulfillmentexpenses ........................................ $ 427 $ 925 $ 1,225
Technology and development . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,695 3,608 4,446
Marketing ................................................ 2,160 2,138 2,565
General and administrative . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,694 6,025 6,091
See accompanying notes to consolidated financial statements.
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