Netflix, Inc.

What does it do?

Netflix is the world's largest video streaming service, letting you watch TV shows, movies, documentaries, and even live sports for a monthly fee. Think of it like a giant on-demand cinema you access through your TV, phone, or laptop — no cable box required. They make their own original content, like Squid Game and Stranger Things, alongside licensing shows from other studios. They've recently expanded into video games and live events like boxing matches, so it's no longer just about binge-watching.

How does it make money?

Netflix makes almost all of its money from monthly subscriptions — roughly 300 million paying members worldwide pay anywhere from $7 to $23 per month depending on their plan and country. A newer but fast-growing slice comes from its ad-supported tier, where members pay less but Netflix also earns money by showing them ads. Revenue grew from $39 billion to $45.2 billion year-over-year, a 16% increase, while net income of $11 billion shows they've gotten much better at controlling costs after years of heavy spending on content.

Why do investors care?

The growth story is now about profit expansion, not just adding subscribers — Netflix has largely saturated the English-speaking world, so every new dollar of revenue hits the bottom line harder as fixed content costs spread across a bigger base. Its advertising business is the wildcard: if it can build a meaningful ad platform, it could charge advertisers premium rates for a highly engaged, global audience. The crackdown on password sharing, which they rolled out globally, successfully converted millions of freeloaders into paying customers and showed the market that management can execute tough decisions. What has to go right: ad revenue must scale, content spending must stay disciplined, and international markets like India and Latin America need to keep growing.