Use this equation, "Profits after taxes/Sales revenues" to calculate the Net Profit Margin of Netflix in 2016 and in 2017. Based on this calculation, what is your assessment of Netflixs financial performance in 2017?

EXHIBIT 5 Netflix's Performance by Business Segment, 2015-2017 (in millions, except for average monthly revenues per paying member and percentages) Domestic Streaming Segment 2017 2016 2015 52.8 43.4 47.9 1.5 2.0 1.3 54.8 49.4 44.7 5.5 4.7 5.6 $ 10.18 $ 9.21 $ 8.50 Memberships Paid memberships at year-end Trial memberships at year-end Total Net membership additions Average monthly revenue per paying membership Revenues Cost of Revenues (Note 1) Marketing costs Contribution profit (Note 2) Contribution margin $6,153.0 3,319.2 553.3 $2,280.5 37% $5,077.3 2,855.8 382.8 $1,838.7 36% $4,180.3 2,487.2 313.6 $1,375.5 33% International Streaming Segment 57.8 41.2 Memberships Paid memberships at year-end Trial memberships at year-end Total Net membership additions 27.4 2.6 3.2 5.0 62.8 20 44.4 30.0 18.5 14.3 11.7 International Streaming Segment 57.8 41.2 27.4 5.0 3.2 2.6 44.4 30.0 62.8 18.5 14.3 11.7 7.48 $ 8.66 $7.81 $ Memberships Paid memberships at year-end Trial memberships at year-end Total Net membership additions Average monthly revenue per paying membership Revenues Cost of Revenues (Note 1) Marketing costs Contribution profit (Note 2) Contribution margin $5,089.2 4,137.9 724.7 $3,211.1 2,911.4 608.2 $ (308.5) (10)% $1,953.4 1,780.4 506.4 $ (333.6) (17)% $ 226.6 4% Domestic DVD Segment 4.8 3.3 .1 4.0 .1 4.1 .1 4.9 3.4 .7 8 .9 $ 10.17 $ 10.22 $ 10.30 Memberships Paid memberships at year-end Trial memberships at year-end Total Net membership losses Average monthly revenue per paying membership Revenues Cost of Revenues (Note 1) Marketing costs Contribution profit (Note 2) Contribution margin $ 542.3 $ 450.5 202.5 $ 645.7 323.9 262.7 $ 279.5 $ 248.0 55% $ 321.8 50% 52% Global Totals 117.6 93.8 74.8 $ 9.43 $ 8.61 $ 8.15 Global streaming memberships at year end Global streaming average monthly revenue per paying membership Revenues Operating income Operating margin Net income $6,779.5 $11,692.7 838.7 305.8 $8,830.7 379.8 4% $ 186.7 5% 7% 558.9 $ $ 122.6 EXHIBIT 5 Netflix's Performance by Business Segment, 2015-2017 (in millions, except for average monthly revenues per paying member and percentages) Domestic Streaming Segment 2017 2016 2015 52.8 43.4 47.9 1.5 2.0 1.3 54.8 49.4 44.7 5.5 4.7 5.6 $ 10.18 $ 9.21 $ 8.50 Memberships Paid memberships at year-end Trial memberships at year-end Total Net membership additions Average monthly revenue per paying membership Revenues Cost of Revenues (Note 1) Marketing costs Contribution profit (Note 2) Contribution margin $6,153.0 3,319.2 553.3 $2,280.5 37% $5,077.3 2,855.8 382.8 $1,838.7 36% $4,180.3 2,487.2 313.6 $1,375.5 33% International Streaming Segment 57.8 41.2 Memberships Paid memberships at year-end Trial memberships at year-end Total Net membership additions 27.4 2.6 3.2 5.0 62.8 20 44.4 30.0 18.5 14.3 11.7 International Streaming Segment 57.8 41.2 27.4 5.0 3.2 2.6 44.4 30.0 62.8 18.5 14.3 11.7 7.48 $ 8.66 $7.81 $ Memberships Paid memberships at year-end Trial memberships at year-end Total Net membership additions Average monthly revenue per paying membership Revenues Cost of Revenues (Note 1) Marketing costs Contribution profit (Note 2) Contribution margin $5,089.2 4,137.9 724.7 $3,211.1 2,911.4 608.2 $ (308.5) (10)% $1,953.4 1,780.4 506.4 $ (333.6) (17)% $ 226.6 4% Domestic DVD Segment 4.8 3.3 .1 4.0 .1 4.1 .1 4.9 3.4 .7 8 .9 $ 10.17 $ 10.22 $ 10.30 Memberships Paid memberships at year-end Trial memberships at year-end Total Net membership losses Average monthly revenue per paying membership Revenues Cost of Revenues (Note 1) Marketing costs Contribution profit (Note 2) Contribution margin $ 542.3 $ 450.5 202.5 $ 645.7 323.9 262.7 $ 279.5 $ 248.0 55% $ 321.8 50% 52% Global Totals 117.6 93.8 74.8 $ 9.43 $ 8.61 $ 8.15 Global streaming memberships at year end Global streaming average monthly revenue per paying membership Revenues Operating income Operating margin Net income $6,779.5 $11,692.7 838.7 305.8 $8,830.7 379.8 4% $ 186.7 5% 7% 558.9 $ $ 122.6