8-K

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

Current Report Pursuant to Section 13 or 15(d) of

the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported):

January 24, 2006

NETFLIX, INC.

(Exact name of registrant as specified in its charter)

Delaware	000-49802	77-0467272
(State or other jurisdiction of incorporation)	(Commission File Number)	(I.R.S. Employer Identification No.)

100 Winchester Circle

Los Gatos, CA

95032

(Address of principal executive offices)

(Zip Code)

(408) 540-3700

(Registrant’s telephone number, including area code)

970 University Avenue

Los Gatos, CA

95032

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02 Results of Operations and Financial Condition.

On January 24, 2006, Netflix, Inc. announced its financial results for the quarter and year ended December 31, 2005. The press release, which is attached hereto as Exhibit 99.1 and incorporated herein by reference, discloses certain financial measures that may be considered non-GAAP financial measures. Generally, a non-GAAP financial measure is a numerical measure of a company’s performance, financial position, or cash flows that either excludes or includes amounts that are not normally excluded or included in the most directly comparable measure calculated and presented in accordance with generally accepted accounting principles in the United States. Management believes that non-GAAP net income is a useful measure of operating performance because it excludes the non-cash impact of stock option accounting. In addition, management believes that free cash flow is a useful measure of liquidity because it excludes the non-operational cash flows from purchases and sales of short-term investments and cash flows from financing activities. However, these non-GAAP measures should be considered in addition to, not as a substitute for, or superior to net income and net cash provided by operating activities, or other financial measures prepared in accordance with GAAP.

The information in this report shall not be treated as “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, nor shall it be deemed incorporated by reference into any registration statement or other document pursuant to the Securities Act of 1933 or the Securities Exchange Act of 1934, except as expressly stated by specific reference in such filing.

Item 9.01 Financial Statement and Exhibits.

(c) Exhibits

99.1   Press release dated January 24, 2006 by Netflix, Inc.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	NETFLIX, INC.
Date: January 24, 2006
	/s/ Barry McCarthy
	Barry McCarthy
	Chief Financial Officer

EXHIBIT INDEX

Exhibit No.	Description of Exhibit
99.1*	Press release issued by Netflix, Inc. on January 24, 2006.

* This exhibit is intended to be furnished and shall not be deemed “filed” for purposes of the Securities Exchange Act of 1934.

EX-99.1

Exhibit 99.1

FOR IMMEDIATE RELEASE	IR CONTACT:	Deborah Crawford
Tuesday, January 24, 2006		Director, Investor Relations
		408 540-3712
	PR CONTACT:	Ken Ross
		VP, Corporate Communications
		408 540-3931

Netflix Announces Q4 2005 Financial Results

Subscribers – 4.2 million

Churn – 4.0 percent

GAAP Net Income - $ 38.1 million

Income Before Income Taxes - $9.1 million

LOS GATOS, Calif., January 24, 2006 – Netflix (Nasdaq: NFLX) today reported results for the fourth quarter and year ended December 31, 2005.

For the fourth quarter:

• Subscribers increased 60 percent year-over-year to 4.2 million. Net subscriber additions were a record high for both the quarter and the year.

• Churn declined to a record low of 4.0 percent.

• Revenue was $195 million.

• GAAP net income was $38.1 million, which includes the benefit of realized deferred tax assets of $30.2 million.

• Income before income taxes was $9.1 million.

• Non-GAAP net income was $41.4 million. Non-GAAP net income before realized deferred tax assets was $11.3 million.

“2005 was another year of solid achievement and continued momentum,” said Reed Hastings, Netflix co-founder and chief executive officer. “We generated rapid subscriber growth, made the best customer experience even better, ended the year with the lowest churn in our history, and delivered both rapid growth and strong earnings.

“We enter 2006 confident we can reach our goal of 20 million subscribers within the 2010 to 2012 time frame while delivering $50 million to $60 million in pretax income this year and 50 percent year-over-year earnings growth for the next three to four years after that.”

Fourth-Quarter and Fiscal-Year 2005 Financial Highlights

Revenue for the fourth quarter of 2005 was a record $195.0 million, representing 36 percent year-over-year growth from $143.9 million for the fourth quarter of 2004, and 12 percent quarter-over-quarter growth from $174.3 million for the third quarter of 2005. Revenue for fiscal 2005 was $688.0 million, up 36 percent from $506.2 million for fiscal 2004.

GAAP net income for the fourth quarter of 2005 was $38.1 million, or $0.57 per diluted share, compared to GAAP net income of $5.6 million, or $0.09 per diluted share, for the fourth quarter of 2004 and GAAP net income of $6.9 million, or $0.11 per diluted share, for the third quarter of 2005.

GAAP net income for the fourth quarter included a benefit of the realized deferred tax assets of $30.2 million, or approximately $0.45 per diluted share, related to the recognition of the Company’s deferred tax assets. The Company had previously discussed its expectation to realize these deferred tax assets in the near future. The Company has concluded, pursuant to Statement of Financial Accounting Standards No. 109, that the deferred tax assets are more likely than not to be realized.

GAAP net income for fiscal 2005 was $41.9 million, or $0.64 per diluted share, compared to GAAP net income of $21.6 million, or $0.33 per diluted share, for fiscal 2004.

GAAP net income for fiscal 2005 included a benefit of the realized deferred tax assets of $30.2 million, or approximately $0.46 per diluted share, related to the recognition of the Company’s deferred tax assets.

Non-GAAP net income was $41.4 million, or $0.62 per diluted share, for the fourth quarter of 2005, compared to non-GAAP net income of $9.9 million, or $0.16 per diluted share, for the fourth quarter of 2004 and non-GAAP net income of $10.2 million, or $0.16 per diluted share, for the third quarter of 2005. Excluding the benefit of the realized deferred tax assets in the quarter, non-GAAP net income was $11.3 million, or $0.17 per diluted share.

Non-GAAP net income was $56.3 million, or $0.86 per diluted share, for fiscal 2005 compared to non-GAAP net income of $38.2 million, or $0.59 per diluted share for fiscal 2004. Excluding the benefit of the realized deferred tax assets, non-GAAP net income for fiscal 2005 was $26.1 million, or $0.40 per diluted share.

Non-GAAP net income equals net income on a GAAP basis before stock-based compensation expense.

Gross margin for the fourth quarter of 2005 was 47.1 percent, compared to 45.5 percent for the fourth quarter of 2004 and 43.2 percent for the third quarter of 2005.

Free cash flow¹ for the fourth quarter of 2005 was $24.3 million, compared to $5.4 million in the fourth quarter of 2004 and $7.0 million for the third quarter of 2005. Free cash flow for fiscal 2005 was $24.3 million as compared to $34.8 million in fiscal 2004.

Cash provided by operating activities for the fourth quarter of 2005 was $63.7 million, compared to $32.5 million for the fourth quarter of 2004 and $33.3 million for the third quarter of 2005. Cash provided by operating activities for fiscal 2005 was $163.0 million, compared to $147.6 million for fiscal 2004.

Subscriber acquisition cost² for the fourth quarter of 2005 was $40.65 per gross subscriber addition, compared to $34.64³ for the same period of 2004 and $35.69 for the third quarter of 2005. SAC for fiscal 2005 was $38.08 per gross subscriber addition compared to $35.39⁴ for fiscal 2004.

Churn⁵ for the fourth quarter of 2005 was 4.0 percent, compared to 4.4 percent for the fourth quarter of 2004 and 4.3 percent for the third quarter of 2005. Churn includes free subscribers as well as paying subscribers who elect not to renew their monthly subscription service during the quarter.

¹ Free cash flow is defined as cash provided by operating activities less cash used in investing activities excluding purchases and sales of short-term investments.

² Subscriber acquisition cost is defined as the total marketing expense on the Company’s Statement of Operations divided by total gross subscriber additions during the quarter.

³ SAC in the fourth quarter of 2004 excludes costs associated with international operations. Consolidated SAC was $36.18 for the fourth quarter of 2004.

⁴ SAC for fiscal 2004 excludes costs associated with international operations. Consolidated SAC was $36.09 for the fiscal 2004.

Subscribers. Netflix ended the fourth quarter of 2005 with approximately 4,179,000 total subscribers, representing 60 percent year-over-year growth from 2,610,000 total subscribers at the end of the fourth quarter of 2004 and 16 percent sequential growth from 3,592,000 subscribers at the end of the third quarter of 2005. Net subscriber additions in the quarter were 587,000, compared to 381,000 for the same period of 2004 and 396,000 for the third quarter of 2005.

During the quarter Netflix acquired 1,156,000 gross subscriber additions, representing 48 percent year-over-year growth from 783,000 gross subscriber additions acquired in the fourth quarter of 2004 and 26 percent quarter-over-quarter growth from 921,000 gross subscriber additions acquired in the third quarter of 2005.

Of the 4,179,000 total subscribers at quarter end, 96 percent, or 4,026,000, were paid subscribers. The other 4 percent, or 153,000, were free subscribers. Paid subscribers represented 95 percent of total subscribers at the end of the fourth quarter of 2004 and the third quarter of 2005.

Business Outlook

The Company’s performance expectations for the first quarter of 2006 and full-year 2006 are as follows:

First-Quarter 2006

• Ending subscribers of 4.6 million to 4.85 million

• Revenue of $219 million to $224 million

• GAAP net income (loss) of ($1.5) million to $2.5 million

Full-Year 2006

• Ending subscribers of at least 5.9 million, up from at least 5.65 million

• Revenue of at least $960 million, up from at least $940 million

• Pretax income of $50 million to $60 million⁶

• GAAP net income of $29.5 million to $35.4 million

Float and Trading Plans

The Company estimates the public float at approximately 46,802,948 shares as of December 31, 2005, down slightly from 46,874,645 shares as of September 30, 2005, based on registered shares held in street name with the Depository Trust and Clearing Corporation. No outstanding shares are subject to a lock-up agreement of any kind. From time to time executive officers of Netflix may elect to buy or sell stock in Netflix. All open market sales are made pursuant to the terms of 10b5-1 Trading Plans approved by the Company and generally adopted no less than three months prior to the first date of sale under such plan.

Earnings Call

The Netflix earnings call will be webcast today at 5:00 p.m. Eastern Time / 2:00 p.m. Pacific Time, and may be accessed at http://ir.netflix.com. Following the conclusion of the webcast, a replay of the call will be available via Netflix’s website at http://ir.netflix.com. For those without access to the Internet, a replay of the call will be available from approximately 5:00 p.m. Pacific Time on January 24, 2006 through January 30, 2006. To listen to a replay, call (719) 457-0820, access code 7417955.

⁵ Churn is defined as customer cancellations in the quarter divided by the sum of beginning subscribers and gross subscriber additions, divided by three months.

⁶ Pretax income is defined as income before income taxes as shown on the Company’s Statement of Operations, which line item includes stock based compensation expense.

Use of Non-GAAP Measures

Management believes that non-GAAP net income is a useful measure of operating performance because it excludes the non-cash impact of stock option accounting, and, where specified, excludes the benefit of the realized tax assets. In addition, management believes that free cash flow is a useful measure of liquidity because it excludes the non-operational cash flows from purchases and sales of short-term investments and cash flows from financing activities. However, these non-GAAP measures should be considered in addition to, not as a substitute for or superior to, net income and net cash provided by operating activities, or other financial measures prepared in accordance with GAAP. A reconciliation to the GAAP equivalents of these non-GAAP measures is contained in tabular form on the attached unaudited financial statements.

About Netflix

Netflix (Nasdaq: NFLX) is the world’s largest online movie rental service, providing more than four million subscribers access to over 55,000 DVD titles. Under the company’s most popular program, for $17.99 a month, Netflix subscribers rent as many DVDs as they want and keep them as long as they want, with three movies out at a time. There are no due dates, no late fees and no shipping fees. DVDs are delivered for free by the USPS from regional shipping centers located throughout the United States. Netflix can reach more than 90 percent of its subscribers with generally one business-day delivery. Netflix offers personalized movie recommendations to its members and has more than 1 billion movie ratings. Netflix also allows members to share and recommend movies to one another through its Friends^SM feature. For more information, visit www.netflix.com.

Forward-Looking Statements

This press release contains certain forward-looking statements within the meaning of the federal securities laws, including statements regarding our subscriber growth, revenue and GAAP net income for the first quarter of 2006 as well as subscriber growth, revenue, pre-tax income and GAAP net income for the full-year 2006. The forward-looking statements in this release are subject to risks and uncertainties that could cause actual results and events to differ, including, without limitation: impacts arising out of competition, our ability to manage our growth, in particular, managing our subscriber acquisition cost as well as the mix between revenue sharing titles and titles not subject to revenue sharing that are delivered to our subscribers; our ability to attract new subscribers and retain existing subscribers; changes in pricing, availability and effectiveness related to our advertising; fluctuations in consumer usage of our service, customer spending on DVDs and related products; disruption in service on our website or with our computer systems; deterioration of the U.S. economy or conditions specific to online commerce or the filmed entertainment industry; conditions that effect our delivery through the U.S. Postal Service, including regulatory changes and increases in first class postage; increases in the costs of acquiring DVDs; and, widespread consumer adoption of different modes of viewing in-home filmed entertainment. A detailed discussion of these and other risks and uncertainties that could cause actual results and events to differ materially from such forward-looking statements is included in our filings with the Securities and Exchange Commission, including our Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 15, 2005. We undertake no obligation to update forward-looking statements to reflect events or circumstances occurring after the date of this press release.

Netflix, Inc.

Consolidated Statements of Operations

(unaudited)

(in thousands, except per share data)

	Three Months Ended									Twelve Months Ended
	December 31, 2004			September 30, 2005			December 31, 2005			December 31, 2004			December 31, 2005
Revenues:
Subscription	$	140,664		$	172,740		$	192,566		$	500,611		$	681,779
Sales		3,229			1,577			2,474			5,617			6,215
Total revenues		143,893			174,317			195,040			506,228			687,994
Cost of revenues:
Subscription		76,223			97,878			101,967			273,401			393,788
Sales		2,219			1,189			1,252			3,057			3,794
Total cost of revenues		78,442			99,067			103,219			276,458			397,582
Gross profit		65,451			75,250			91,821			229,770			290,412
Operating expenses:
Fulfillment		16,433			17,544			18,964			56,609			70,762
Technology and development		5,890			8,006			8,268			22,906			30,942
Marketing		28,332			32,867			46,989			98,027			141,997
General and administrative		5,749			8,020			6,815			16,287			24,740
Stock-based compensation		4,358			3,293			3,332			16,587			14,327
Total operating expenses		60,762			69,730			84,368			210,416			282,768
Operating income		4,689			5,520			7,453			19,354			7,644
Other income (expense):
Interest and other income		1,118			1,491			1,965			2,592			5,753
Interest and other expense		(57	)		(13	)		(353	)		(170	)		(407	)
Income before income taxes		5,750			6,998			9,065			21,776			12,990
Provision for (benefit from) income taxes		181			52			(29,049	)		181			(28,940	)
Net income	$	5,569		$	6,946		$	38,114		$	21,595		$	41,930
Net income per share:
Basic	$	.11		$	.13		$	.70		$	.42		$	.78
Diluted	$	.09		$	.11		$	.57		$	.33		$	.64
Weighted average common shares outstanding:
Basic		52,553			53,693			54,393			51,988			53,528
Diluted		63,702			66,012			66,962			64,713			65,518
Reconciliation of Non-GAAP Financial Measures (Unaudited)
Non-GAAP net income reconciliation:
Net income	$	5,569		$	6,946		$	38,114		$	21,595		$	41,930
Add back:
Stock-based compensation		4,358			3,293			3,332			16,587			14,327
Non-GAAP net income	$	9,927		$	10,239		$	41,446		$	38,182		$	56,257
Non-GAAP net income per share:
Basic	$	.19		$	.19		$	.76		$	.73		$	1.05
Diluted	$	.16		$	.16		$	.62		$	.59		$	.86
Weighted average common shares outstanding:
Basic		52,553			53,693			54,393			51,988			53,528
Diluted		63,702			66,012			66,962			64,713			65,518

Netflix, Inc.

Consolidated Balance Sheets

(unaudited)

(in thousands, except share and par value data)

	As of
	December 31, 2004			December 31, 2005
Assets
Current assets:
Cash and cash equivalents	$	174,461		$	212,256
Prepaid expenses		2,741			7,848
Prepaid revenue sharing expenses		4,695			5,252
Deferred tax assets		—			9,588
Other current assets		5,449			4,669
Total current assets		187,346			239,613
DVD library, net		42,158			57,032
Intangible assets, net		961			457
Property and equipment, net		18,728			40,213
Deposits		1,600			1,249
Deferred tax assets		—			20,565
Other assets		1,000			800
Total assets	$	251,793		$	359,929
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	49,775		$	63,491
Accrued expenses		13,131			20,908
Deferred revenue		31,936			48,533
Current portion of capital lease obligations		68			—
Total current liabilities		94,910			132,932
Deferred rent		600			842
Total liabilities		95,510			133,774
Stockholders’ equity:
Common stock, $0.001 par value; 160,000,000 shares authorized at December 31, 2004 and December 31, 2005; 52,732,025 and 54,755,731 issued and outstanding at December 31, 2004 and December 31, 2005, respectively		53			55
Additional paid-in capital		292,843			317,194
Deferred stock-based compensation		(4,693	)		(1,326	)
Accumulated other comprehensive loss		(222	)		—
Accumulated deficit		(131,698	)		(89,768	)
Total stockholders’ equity		156,283			226,155
Total liabilities and stockholders’ equity	$	251,793		$	359,929

Netflix, Inc.

Consolidated Statements of Cash Flows

(unaudited)

(in thousands)

	Three Months Ended									Twelve Months Ended
	December 31, 2004			September 30, 2005			December 31, 2005			December 31, 2004			December 31, 2005
Cash flows from operating activities:
Net income	$	5,569		$	6,946		$	38,114		$	21,595		$	41,930
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation of property and equipment		1,727			2,424			2,616			5,871			9,134
Amortization of DVD library		20,628			24,477			24,848			80,346			96,883
Amortization of intangible assets		454			139			12			1,987			985
Stock-based compensation expense		4,358			3,293			3,332			16,587			14,327
Stock option income tax benefits		176			12			(12	)		176			—
Loss on disposal of property and equipment		135			—			—			135			—
Loss on disposal of short-term investments		—			—			—			274			—
Gain on disposal of DVDs		(1,180	)		(819	)		(1,432	)		(2,912	)		(3,588	)
Non-cash interest expense		11			—			—			44			11
Deferred taxes		—			—			(30,153	)		—			(30,153	)
Changes in operating assets and liabilities:
Prepaid expenses and other current assets		(4,130	)		1,401			(7,737	)		(9,130	)		(4,884	)
Accounts payable		2,107			(12,260	)		19,540			17,121			13,716
Accrued expenses		(2,709	)		6,702			504			1,506			7,777
Deferred revenue		5,278			903			14,133			13,612			16,597
Deferred rent		113			90			(33	)		359			242
Net cash provided by operating activities		32,537			33,308			63,732			147,571			162,977
Cash flows from investing activities:
Purchases of short-term investments		—			—			—			(586	)		—
Proceeds from sale of short-term investments		—			—			—			45,013			—
Purchases of property and equipment		(6,941	)		(5,429	)		(12,414	)		(14,962	)		(30,619	)
Acquisition of intangible asset		—			(481	)		—			—			(481	)
Acquisitions of DVD library		(23,332	)		(21,939	)		(29,753	)		(102,971	)		(113,950	)
Proceeds from sale of DVDs		3,229			1,577			2,040			5,617			5,781
Deposits and other assets		(99	)		(10	)		716			(492	)		551
Net cash used in investing activities		(27,143	)		(26,282	)		(39,411	)		(68,381	)		(138,718	)
Cash flows from financing activities:
Proceeds from issuance of common stock		1,538			3,888			5,827			6,035			13,393
Principal payments on notes payable and capital lease obligations		(107	)		—			—			(436	)		(79	)
Net cash provided by financing activities		1,431			3,888			5,827			5,599			13,314
Effect of exchange rate changes on cash and cash equivalents		(178	)		—			222			(222	)		222
Net increase in cash and cash equivalents		6,647			10,914			30,370			84,567			37,795
Cash and cash equivalents, beginning of period		167,814			170,972			181,886			89,894			174,461
Cash and cash equivalents, end of period	$	174,461		$	181,886		$	212,256		$	174,461		$	212,256
Non-GAAP free cash flow reconciliation:
Net cash provided by operating activities	$	32,537		$	33,308		$	63,732		$	147,571		$	162,977
Purchases of property and equipment		(6,941	)		(5,429	)		(12,414	)		(14,962	)		(30,619	)
Acquisition of intangible asset		—			(481	)		—			—			(481	)
Acquisitions of DVD library		(23,332	)		(21,939	)		(29,753	)		(102,971	)		(113,950	)
Proceeds from sale of DVDs		3,229			1,577			2,040			5,617			5,781
Deposits and other assets		(99	)		(10	)		716			(492	)		551
Non-GAAP free cash flow	$	5,394		$	7,026		$	24,321		$	34,763		$	24,259

Netflix, Inc.

Consolidated Other data

(unaudited)

(in thousands, except percentages and subscriber acquisition cost)

	As of / Three Months Ended									As of / Twelve Months Ended
	December 31, 2004			September 30, 2005			December 31, 2005			December 31, 2004			December 31, 2005
Subscriber information:
Subscribers: beginning of period		2,229			3,196			3,592			1,487			2,610
Gross subscribers additions: during period		783			921			1,156			2,716			3,729
Gross subscriber additions year-to-year change		76.4	%		56.1	%		47.6	%		72.9	%		37.3	%
Gross subscriber additions quarter-to-quarter sequential change		32.7	%		30.3	%		25.5	%		—			—
Less subscriber cancellations : during period		(402	)		(525	)		(569	)		(1,593	)		(2,160	)
Subscribers: end of period		2,610			3,592			4,179			2,610			4,179
Subscribers year-to-year change		75.5	%		61.1	%		60.1	%		75.5	%		60.1	%
Subscribers quarter-to-quarter sequential change		17.1	%		12.4	%		16.3	%		—			—
Free subscribers: end of period		124			169			153			124			153
Free subscribers as percentage of ending subscribers		4.8	%		4.7	%		3.7	%		4.8	%		3.7	%
Paid subscribers: end of period		2,486			3,423			4,026			2,486			4,026
Paid subscribers year-to-year change		75.6	%		60.3	%		61.9	%		75.6	%		61.9	%
Paid subscribers quarter-to-quarter sequential change		16.4	%		10.1	%		17.6	%		—			—
Churn		4.4	%		4.3	%		4.0	%		—			—
Subscriber acquisition cost - Consolidated	$	36.18		$	35.69		$	40.65		$	36.09		$	38.08
Subscriber acquisition cost - U.S.	$	34.64		$	35.69		$	40.65		$	35.39		$	38.08
Margins:
Gross margin		45.5	%		43.2	%		47.1	%		45.4	%		42.2	%
Operating margin		3.3	%		3.2	%		3.8	%		3.8	%		1.1	%
Net margin		3.9	%		4.0	%		19.5	%		4.3	%		6.1	%
Expenses as percentage of revenues:
Fulfillment		11.4	%		10.1	%		9.7	%		11.2	%		10.3	%
Technology and development		4.1	%		4.6	%		4.2	%		4.5	%		4.5	%
Marketing		19.7	%		18.9	%		24.1	%		19.4	%		20.6	%
General and administrative		4.0	%		4.6	%		3.5	%		3.2	%		3.6	%
Operating expenses before stock-based compensation		39.2	%		38.2	%		41.5	%		38.3	%		39.0	%
Stock-based compensation		3.0	%		1.8	%		1.8	%		3.3	%		2.1	%
Total operating expenses		42.2	%		40.0	%		43.3	%		41.6	%		41.1	%
Year-to-year change:
Total revenues		77.2	%		23.1	%		35.5	%		85.9	%		35.9	%
Fulfillment		75.8	%		16.9	%		15.4	%		81.0	%		25.0	%
Technology and development		21.7	%		26.6	%		40.4	%		28.1	%		35.1	%
Marketing		94.0	%		45.9	%		65.9	%		96.3	%		44.9	%
General and administrative		124.0	%		94.6	%		18.5	%		69.9	%		51.9	%
Operating expenses before stock-based compensation		79.9	%		38.5	%		43.7	%		78.3	%		38.5	%
Stock-based compensation		13.7	%		(10.0	)%		(23.5	)%		54.7	%		(13.6	)%
Total operating expenses		72.7	%		35.0	%		38.8	%		76.2	%		34.4	%