Netflix (NFLX) 18 Apr 232023 Q1 Earnings call transcript

Company Profile

Participants

Spencer Wang	Vice President, Finance, Investor Relations and Corporate Development
Ted Sarandos	Co-Chief Executive Officer
Greg Peters	Co-Chief Executive Officer
Spence Neumann	Chief Financial Officer
Jessica Reif Erlich	Bank of America

Call transcript

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Spencer Wang

Hello. And welcome to the Netflix Q1 2023 Earnings Interview. I am Spencer Wang, VP of Finance, IR and Corporate Development.

Joining me today are Co-CEOs, Ted Sarandos and Greg Peters; and CFO, Spence Neumann.

Our interviewer this quarter is Jessica Reif Erlich. we vary. making reminder, actual statements a may results as will forward-looking be and And

Jessica, am that, for With I your to it first you over question. going to turn

Jessica Reif Erlich

Thank you.

with start So and let’s Ted Greg.

for have as share? quarter there over You Are together XX but your Co-CEOs. want this you highlights years, any first is to worked

Ted Sarandos

of each as Jessica, but it’s years, years to together working out, build XX some get those you quarter you XX trusting first trying Well, our pointed respect a you help times. lot and other you Co-CEOs together and in through as

drama, And I as this shorthand that not well. of know to having so lead years. you with for I enjoyed as quarter I Greg pretty down done business kind for about enjoy a And respect together so same many for but that long. trust, much and us Reed did this was Greg usual and the

folks and have it’s as and might eventful thought it’s to Co-CEO together. a professionally So wonderfully big get to as not problems have tackle incredibly stimulating been really to

look So will things this the accomplishments very facilitating one the and Reed’s at transition at one succession. that smooth of great is XX we of very, think Netflix, incredible I years back

Jessica Reif Erlich

Great.

tiers? enable have to more a reduced Is is successful India in you of to XXX what did impetus this in introduction local sharing countries. So recently prices a you similar or advertising and approach in the password XXXX

Spence Neumann

think if bit particularly a you across and refining in the strategy this terms Jessica, XXXX, our our one, sophisticated for the further you pricing. skim last about, global And approach can when I to Board, about was it launch not back pretty did talked if in monetization. of and our is quarters much of take a want. we this really few we pricing

of a growing fit, evolution So a in aim think in these markets fit with bit our product better market pricing that medium as of kind next fit, this our long-term the and of also market revenue. of of step penetration better and

for better members, our our for better business. So

to business anytime in is want a just sure. material emphasize, not But this the for near-term to our

countries, So less X% and us will in point that over it but will the lot and it’s of of a hopefully, long-term, to -- our something saw it’s we success benefit what of like than example so an we sort is can India. revenue of represents

high net back the engagement XX% So December between saw neutral of -- adds. we dropped in We grow to prior to last actually in XXXX, past also launch over year. we prices revenue, XX% growth year And paid the in growth XX%. in from about XX% FX year last year by XX% India accelerated revenue

market So look success. it that’s we a going to that’s play saying is like are -- but would that, what not like out every

Jessica Reif Erlich

Great.

Let’s you move can have password seen any and QX your new conversion in as churn, new specific seen terms add-ons? versus on of you sharing. on it’s have us subs what to launches, color you in Canada, whether in well market What as give

Greg Peters

that take will I Yeah. one.

we so are country hard saw gone America. well, have and importantly, consistent were that as rollouts do well most This is we this we what working directionally can. it transition Latin the and thoughtfully in and of make an us we important last to So maybe for sure with as

for like for with. sign to folks want both own a revenue see that, of up we they cancel build member an people as price remind reaction then increase, looks terms that of we and that initial to like, accounts just and extra their what members share borrowers Netflix So membership that existing much very purchase in and out facility

also market characteristics different it results from these there other and in consistent strong new Latin countries. are see from was countries, So, because original a first the to American different rollout of each all, validation different

So we revenue pre-rollout. positive positive relative are Canada, member you in to a to to mentioned and outcome, position now get positive a

that’s in including really largest So confirmation different a approach different an apply many can strong characteristics, our market with revenue countries countries. that got that we we have

we In we have -- We considered solution. that actually option. actually fact, could launched that

we from about like to members, this of lot But also can we we last some they Netflix launches have on seamless them manage their or and do, while accounts a tools to areas well for that our access making sure the have it set go traveling, been to access got especially in devices. as learned using things improvements always to matter as as good their having that

take we transition it learnings this as as for those felt all extra smooth can of bit in, we based, a results, goals best time, business well. on approach as and possible and we as serves also that make to So, little those was the think better members long-term incorporate

going So are States we QX. improved broadly, to including new United launch in version in the this

Jessica Reif Erlich

you cadence, and you the the a U.S. or an about add-on? and give pricing become the so in of whether world QX. How follow-up, can the there rest a a subscriber -- preference for your to is a said borrower on as thoughts just have you So us current

Greg Peters

Yeah.

say includes would countries when rolling be So many I countries, very right a mean, certainly, the that I out where in of about and think reserve in launch majority some a we But a there’s QX for you different we the United doing our will broad the perspective, other launch, are QX. includes revenue States, we approach. it many, the it is vast bulk think from countries.

You of terms mentioned in pricing.

tested is be basis. in so gives you We and But that affluent America optimal are thinking these we about will Latin tested pricing how a it rollouts I we sense at about last different what in leave in especially will that look more on at will that. that market-by-market pricing, a countries, obviously,

what in then trying that we preference, is do a structure choice. And really to are create of terms supports

member that’s they gives use the that an right buy are Netflix where to where solution or that, basically to extra that for a cases like to place, something folks use be somebody spin-off wants legitimate for think or in accounts too. So for family we member to opportunity them cases, which for want borrower

So really a strong we have, say, don’t preference. I’d

one both revenue We are satisfy to not goals, well to about long-term choice as optimization. steer in those customer than perspective other thinking using trying as pricing

Jessica Reif Erlich

sharing. more any One it all password like are through? plans some and incremental your Are incremental revenue reinvest expenses? the flow this margin is to cost are on so in doesn’t of there marketing there already it distribution, XXX% or seems So content

Greg Peters

this Well, go ahead, I will leave Spencer. --

Spence Neumann

Go it. for Go. No.

Greg Peters

No.

got You it.

You got it.

Spence Neumann

resources. costs, we but not, there’s say general to always wouldn’t reinvest. incremental of the of I kind other just was kind real want say going course, there’s just than really allocation to of of I

to with reaccelerate to as kind the and So revenue you balance generally, are of we our we guidance do kind gradually our that of that, path are we That’s we right want growth. increasing Jessica, the of margins. now, kind on as see objectives and looking

our full see of that XX% balance to relative year, where bit You year XX% to that the margins ahead to are just us. we looking in under guide big range that to XX% up tick prize a last with but

then really, more more and time a for entertainment, more and drive great to more flywheel and and for ultimately, entertainment and really and reinvesting value business. members, big profitable build our of members members So more more that over

Jessica Reif Erlich

to have huge and mean, nothing I an call from it, So a television you advantage in, let’s advertising. let’s move a appears gain AVOD to on much Netflix to legacy to on platform. everything have lose pretty advertising. perspective

the limited been far? as to seem to advertising ad be reach the your said have mass rollout. us ongoing is learnings your Given very pains reach well you linear and enviable. streaming, what and key your from content, the pretty careful you some Having give Can load, that, in demographics, video your to-date growing to so as hard premium humongous engagement position with transition

Greg Peters

Yeah.

As always you to you be long-term state, about significantly frankly, that this gradual expected continue to we reasons we the are mentioned. expect, for we and have a build. But the opportunity optimistic

yields a long-term follows go, other used we have great iterate learn. where process grow we in, of as similar having we that approach we areas found get basically It as very we learn so outcomes in and and we that we that sort many

I continue to of to we So that advertisers. support are we work have got say -- features do today, develop would at where develop to a lot

and rolling have we are a we that out have roadmap like longer verification, but to bigger, got We things there. measurement do go

capabilities which with There’s We partnership work go-to-market Microsoft. go sales and to in is and lot of hard good are that some of do improving vary country-by-country. our a we have this work

buy that advertisers to gives add have to then ways And we on more also seen trying we You grow side. as the consumer-facing are improve inventory. private things programmatic marketplace us

features we the to So adding ad more plan. are

for We members. are making that better experience

we margin are thoughtful business, lucrative, them can add plenty a also expect we judicious of time those fast period And a up high go to but and a that do business. highly significant, through But material being of into as there’s a really thoughtful to are as iterations, trying about we highly to maintain sort trying we fast while and which to pace go pace. and the over process, on

Jessica Reif Erlich

a press frame provide buildup your plans, of have ad and of lot There time cost? you of overview been regarding an tech reports Can capabilities.

Greg Peters

things right have fits and we what’s of that. like lot thinking member flight of about experience would all space a a an to terms one I innovation to and in time in about Yeah. ad, that size ambition innovative be not the is say the this thinking

would verification, well-trodden to work are also a that of business in et build say the where think right back lot measurement, mode is I cetera, we following But that path about to much on what very are are we big a we doing you doing programmatic. when now a

of, straightforward thing. sort say, I’d are relatively Those

the incremental space. are of to And that chime we here? in is doing then in terms do Spence, in really lot a of So that want heavily costs, you work

Spence Neumann

being Jessica, about goal I’d thoughtful methodical we building how in are we we -- Greg to, we the have of always first, say around, which talked just and have walk Sure. generally, this, business. very mentioned, all try this

incremental we And we can do that impacts with and way. profit it a overall believe, that revenue our our contribution our healthy financials, very in how also,

we are So that’s what building towards.

this, some to tech of and of well cost people, some in of to of both partnership capabilities, our as cost is kind as terms capabilities. cost there building the yes, Microsoft the the So, out

very But all manageable.

on the little about increased a costs of of continue plan as quarter, great. this content which level talked bit parity content of to kind past we we is our also We

parity, So progress. is it’s about of again viewing great a which XX%-plus

would and or XX% like business. overly more being we think I we could the are do not but a profit is that all So but moving is better -- our and lower our we believe level option for at members business we keep a are in this priced it specific, incremental it doing we just way to as a of it better without for say, with that’s, think forward, with contribution

Jessica Reif Erlich

how upfront, it When advertising come a sounds couple plans you are to will tier now. you here and come on when -- like you premium any subs you to it coming how you much much of in to the scale, how standards the scale May meaning many weeks, is which the introduce when fall, you platform have your Do the the commitments upfront rollout have? expect in with

Greg Peters

Yeah.

So pricing. on the structure, and always we about plan to question, thinking are first working your improve that

We consumers when great two to corresponding to and range mind do we our consumer’s wide of -- in with range stories access One of prices features. of have increasingly ideally we have a wide appropriate that. range a is, got goals at want

this economics of on we limited behavior premium. goal example is off the and about based that our long-term on plan, have based The revenue. think second standard of the is good of switching seen optimizing ads A

both both We we quality have upgraded think video because or number resolution features, the supports of of terms in and ads of those plan goals. concurrent it streams, video

I moves So make good seen but of we that today. got in space got have we would example have evaluate that’s as continue to on do, will always before, the to add beyond we we a have you that. -- that say more nothing us

or what then terms continue at are grow but we a point. to say, are announce target to growing, let’s sort going forecast, to we we upfronts And in of for and grow, are we or seeking we not scale, every day this obviously, expect of

Jessica Reif Erlich

more seen even higher question the on. move then One you advertising revenue mentioned far, than provide But in have is can because that ARPU and you the specifics what release you standard. will so actually I on

seems like far, so it good? So so

Spence Neumann

higher you even yes, I as ad with pleased overall, standard I in. of economics. say, we the jump It’s actually our our per plan. mean, Yeah. basic kind in are plan higher member can than our overall, U.S., plan than it’s and

of incremental -- a for and have, the we path I revenue, our both the of a as it’s incremental said, trajectory kind So it’s because option we we lower win-win, really profit to business are business. like priced and on, it’s the -- members kind as for a

reinvest which So stronger, more course, it into the more makes business then and can of we great entertainment.

path, the but early. like we it’s So again,

are targeting and this, Jessica, We a tools of quarters are measurement, better kind Greg couple going so options said, of get and buying better, for only advertisers. to into we as better

so So actually strengthen all will reinforce we network this build are ad will on that of kind think and of that kind that premium of building. we that we CPM

Jessica Reif Erlich

So maybe flow. and bit little gears returns switching a cash the capital to free

year did provide you but the update over you expectations longer kept same year. had you You term free pre XXX margins points margin this a raise for growth What that? or indicated basis guidance, are per Can to period? your your flow any of cash point, COVID three-year at improvement this your

Spence Neumann

have provided great guide healthy have. already place where it’s of we a long-term margins, very profit It’s growing a with I’d business -- at our model. cash revenue, a say, we free not the business great scale are to over margins, we feel flow. business growing are billion The never $XX we -- But, in We that margins. about a

starting today. a prize, up that balance, before, into and ticking member base, with business, of I mentioned sort we revenue, into like are big small to the we reaccelerate we back so back that margins feel trying we reinvesting that’s also as point, So into where back those are as

direct earnings roughly consumer of games. in in we calls primarily we are participating of believe we X% We represent areas the that film, have that talked spend in today entertainment TV recent on and where

members think those today, about households population only of we And even when paying that’s XXX X have member roughly million, XXX we right? even being the and just roughly, connected available, million million-ish broadband billion-plus XXX and those households today TV

better with why bring paid we to members. then the addressing bring and more in so our making sharing each are we business to So the that’s service that focused and on just value day

really that’s towards. So what are we working

just margin. a traditionally approaching And term, well roughly There’s ourselves Entertainment above near-term see we services then out at networks XX% long and don’t proxies scale of have operating our ceiling. -- there. been we lots

go believe and we some So have a we advantages. to have long we way inherent

scalable We really content entertainment are perhaps with leading network, the a a model. truly global healthy first, and engagement really

now. more not a to guidance long specific go, we we believe got So have way but really putting for out

Ted Sarandos

wins audience the Just and of like example success, scale get the then add And and is huge spora, that if an we in of being they win. right. regional, that roll get then I of as cost global, -- every additional no business they of to out success, marginal it could that start reach local one our big content global and they there’s when get all it’s then they a

And just -- driving and can content get it’s likely hit of as it in grow where that’s a about, by that with world can for stories scale the go operating fall of really growth provides high. we So gigantic from we in anywhere creating territories, today potential beyond very local Spence drive into business. those is what our back pool margins to very, the people said to the the that are the to love -- business in even at that and

Jessica Reif Erlich

about thinking $X.X relative of plans, are and But an flow update free give us -- have you your your return in you QX. -- this an mean, you sheet, lot how I buyback million incredible the announced cash on capital a capacity. balance Could you to

us give you over longer thinking you the are color on returns how term? can any capital So about

Ted Sarandos

Sure.

Spence Neumann

I…

Ted Sarandos

that want one? you to take do Spencer,

Spence Neumann

to one. take And QX. question. be Thanks, the investment of are fully we happy as I Yeah. can grade Jessica, for that

a for nice the allocation our And right, company. are no there’s that’s change to you milestone So capital philosophy.

of So minimum targeting cash months to to are still maintain equivalent we two roughly revenue.

have of so on cash. about about it’s we of ended the numbers, the sheet with the excess do billion $X.X cash. billion quarter $X.X balance Based on We about $X.X QX minimum billion

we repurchases will our over the So the indicate why the did year. letter in that course that share is of accelerate

video to mention that will may thing intro, then include actual other results vary. this forgot my in statements forward-looking and minor And one I interview

interview So I to scripted. evidence not that actually and video here’s is say want do that this

to Jessica. back So you,

Jessica Reif Erlich

So, likely? potential writer’s a potential are Ted, for strike, or how preparing you

Ted Sarandos

in it that production Well, respect the we for say, industry. and was fans. We painful Jessica, WGA strike. writers the a let’s respect The couldn’t to we strike, we economies really local here first the hard It was to creators. bad last was very, without there them. want it time a and be and was don’t was support devastating very very, for It

strike really of avoid serve make around could a probably find there’s one. better work world, so equitable base to to films we a we our we we deal than and if have is most. a large and from So But we shows there if upcoming sure fair one, want and hard members can the could

do we And to strike. plans are try going into time. to want slate releases a get we pretty happen, worst make an we for solution and but of the and equitable this the But clear, have don’t to take long there be isn’t so a so table really we to to a had robust just are we to us at to

Jessica Reif Erlich

Can are billion once been at get the And you that, content just that? next some do on past you how how over beyond spending thinking strike, kind us color you expect the you have growth? on you depend few Does it give to the years, cadence. change about $XX of revenue

Ted Sarandos

and of content so deliveries. those spend lumpier. or that And or revenue it’s does through throw comping also a came content hits We opening in floodgates we mind little off and that the makes the through spend -- post-COVID keep still way with worked productions or revenue Yes. that the way that It depends on us, starter growth.

to the of back sure. expect the to and in We $XX of rate growth revenue be growth billion depends level about for rate the on XXXX

Jessica Reif Erlich

Okay.

one… Just

Spence Neumann

Okay.

to Just point… Ted’s to add

Jessica Reif Erlich

Yeah.

Spence Neumann

agree again, I …because ahead big totally to it’s so opportunity with that. reinforce just want -- I all but And -- there’s of a that.

we a would but are a market after that on said, XXXX entertainment stay we over $XX We going year XXXX to beyond over to that. not -- go there’s roughly few period, to period billion at big average

to opportunity as a lot of engagement opportunity and So reaccelerate we we that ahead. viewing into revenue, and see grow business

build and there to be to into expect we we just have So it.

Ted Sarandos

Absolutely.

Jessica Reif Erlich

you Do well like your you as had as Awards. at In film output, the on thoughts much distribution, Academy have have any strategy? of theatrical terms revisiting so success

change that recently does from So this in a division, that? anything to anything you? had you also for And read is restructuring there

Ted Sarandos

doing Jessica, They No. films. division building great. really great some the is are film

As you very, But the pointed popular so than Oscars that at the better out, very even were the big the great. success won was thing also with movies was fans. that

with said, this is enormously loved like popular the proud with on the even, the in So we critical acclaim I Quiet fans. Pinocchio were because by Front Western All mix, certainly that they was that of award-winning was fans, that, really and were and films are

the really So in with investment we film. happy are

to film. course, to improve a like trying ways a remember, lot our collect there’s Of it, strategy, our demand are for all films. create we we and release But do with of of

not big and members our including new the collect the think value having demand. create folks is that for business. to Driving to theater first with just drives feature value on desirable window our films subscription in content, business. And our service that I members. We our demand a We drives

make to no are that and members to and films changes for big our loved So watched. splash films continue the play, except for major in with trying a improve

Spence Neumann

And…

Jessica Reif Erlich

Obviously.

Spence Neumann

member, average entertainment our in and to revenue of -- delivering our and an invest leaning paying because movies, other just opportunity into members at content it over affords variety at these of to must-watch one have reach our or have to to per and million for members big we we scale but that area the it’s them value bring our members. of XXX our piece really content believe … advantage members, advantage

of kind that leaning really it’s So into advantage.

Ted Sarandos

don’t They And on to the that or with can don’t the big but window budget to comparison scale, have it’s as the have Netflix. we a with pointed tempting single base make you the the support out, base other a revenue window even viewer Spence. single I the films services support think between way services,

Jessica Reif Erlich

And is beef live issues. Rock your invest to big do Is Chris a up strategy driver, a you but need Blind Love evolving? How to hit, capabilities? more advertising was had technical huge is your live technical some

Ted Sarandos

Greg, do grab want you to that?

Greg Peters

after by saying sorry kick so to our that from we will got ourselves to that Rock last it really a improve people. serve didn’t And standard have clear some we just the technical in meet we had to we live we a to have expect I actually start live we when try members. of introduced Yeah. March. implemented many infrastructure, off. streaming disappointed perspective, We bug the I changes be broadcast, are and Chris performance the just would

millions just of we once load And trying interacting sort in didn’t other the to put internal testing, because see we is each of this Love apparent became people only with multiple watch Blind. it under of bug systems

So news it we hate turn Ted the million but have that the about will and good would will and from of the I better these watched that show. do X.X fundamental and enjoyed is side. it ultimately, talk need. say things learn to we And more to over when we the infrastructure I we viewers strategy it Then we get will happen,

Ted Sarandos

it it Look, helps we the we said live have Yeah. content use when sense when makes want creatively, itself. to

Reunion when play generate buzz, a it enjoy people does that’s news So can live together. going it to really Show and better

so anticipation in Certainly, the so well, played out Show Chris for because set. to much going Rock what he’s that say Standup

like fact that, to it. the we have option like do projects that So to when we the have opportunities we do the

be but the who come said, those them is Reunion, live love some and unscripted not Netflix does and to for point Greg kind love wanted to for It everyone that super growing love that we super we on for across live. product it brands for disappointed will to are show. are of As able people the brand Blind the be the thrilled on with of Love

do those fact on after, And a that of have Chris Rock, a it keep little think a big of it mind, play the viewing the and live But out I sometimes do XX% it event shows like doesn’t in generate about they was do results-oriented conversation. but when bit lot happened better been on change live.

Jessica Reif Erlich

a it of driver Is big the advertising?

Ted Sarandos

We ahead, got Greg. -- have not go

Greg Peters

Ted. No. Go ahead,

take You it.

Ted Sarandos

I will have not we just live say currently the in advertising broadcast.

Jessica Reif Erlich

from Right. release, of of subs conversion one back password more from your the sharing, I I add-ons, have can What for is question potential will I you the that million these go second. actually a mean, that households. just to like sounds and on XXX global the But of borrowers, XX is that’s the million-plus million-plus potential households? number number or what XXX

Greg Peters

the the I well-qualified that the before. service have the how system clearly technical they enjoyed smart borrowers, need sense borrowers they degree, to people the some those all set know content works, TV, have access, they to Well, to represent the broadband Netflix, mean, in on get the

said see engagement a that, So, those amongst of range borrowers. sort having we of a

So strong then that tailor some off folks see through account a I shows taper range we would off to and as watching paying our as those folks of say, and -- folks. normal much are convert, that of likelihood are rather very

new where you a membership we will that case, say, with relationship it’s I’d a much in even pricing watching that ultimately And that distortion, whole But much distortion less range one-to-one structural of really develop less, are convert. if shift without this without important members. likely you will represents

that So we approach. membership will through see grow

We it will grow well. see through as revenue

essentially then time, penetration people that Ted but the will after of that, will movies, some see fullness the of But situation to go more we also more States those members where in represent our in folks high won’t as more the stats markets amazing and amazing they get there, ultimately amazing that those games can improving to convert offering like we you our folks United well. of series, with talked about viewer pool mentioned convert, a will a that

Jessica Reif Erlich

going to are most also features And then just like that advertising, advertising you what back excited the about? are

Greg Peters

in for Well, then what get super there’s also do that which to the we that business, bigger. excited because and work excited am we am it’s how to just really we sort of where again, be are mode the this there’s about need with about I I

So there’s buy. advertisers expanding targeting, pieces, sort lot the a for of which tacks are about the brass ways measurement, verification, to

excited a those sort returns am from of of immediacy business for pieces. So I

But product to you then experience have an technology there? from think fully think fully world. to excited like we the when what ad system That’s where a deterministic addressable, am I and characteristics a premium, I streaming about perspective, targetable, fully bring again of specific about opportunity this

about And so range we rules in flight that things we of having size fits how all the of shows do tailor be flight a terms of user user experience certain things than rather we how means how to specific brands that to the with we terms of in and what can a ads. set needs from in whole moment creatives a one associated

are, for, let all working know will and after, a mostly, working frankly, even there’s we things can we with we not. we them whole of and So amazing then to because things be and that will don’t those be go after advertisers members just tell innovation line what for us going what’s years and try what’s

Jessica Reif Erlich

What walk do you phase? consider the

Greg Peters

shifts things. us. I that phase and business advertisers combination is getting think One of scale about scale, obviously, the a so are how sort in we certain a relevant getting size into Well, of to the we think, scale of are probably that’s walk is

capability, -- programmatic a so buying technical that is much that’s component Part along those face advertisers the verification, that’s of of targeting advertisers, it very features the that the it. measurement, lines of

basically are we in growth, really to characterize that I’d get into got we middle the to getting we before phase do we of So of those, phase. constitutes, I think, lot really -- frankly, work, a are have run and that that

Spence Neumann

multiyear a run a build it’s are quarters this. crawl, of walk, and about talked gradual and We build Yeah. we and into a couple only

year Greg, are by hope I into and of would walk I getting the don’t crawl But is phase to but the walk. in I if you the of year a from would So this we think year. agree, know, next end

Greg Peters

That sounds Yeah. right.

Jessica Reif Erlich

clarify could is you build I as I just or a then said, something, typically, up that you XX%-plus mean, to do be that you wanted this do And just expect advertising -- Is high business? a I XX% or think XX% it’s to to really margins. XX% think margin. Spence, as

Spence Neumann

there. Well, I put plus in

at a business this and time just number that a be to still our give I said leaning of fact yet. the it meaningfully is it but and little XX%, yes, really expectations we was want are startup don’t to over specific I over So so least highlight in conservative. that XX% mode would But,

Jessica Reif Erlich

Okay.

on to retention? engagement are what gaming, you points us can some you Moving and on data give on seeing

Greg Peters

am I but points, we those me let at. where have are we to going to-date. games just sort More of broadly, give Yeah. you got review XX out specific not

We this for queue the very games. exciting have year. got XX more There’s in

Terra That’s you builder, twist that If few a to sort reverse Nil. genre. recommend I’d want on try a out, city of

Quest have Mighty today. You got launching

coming from which II is year. later OXENFREE game is new first this internal Our studio, an

a sort and internally-developed that. games into you see of licensing combination it in into So can of build now layering

that this multiyear these sort you build where that categories period. we progress you or added, And we and say, would about film film here sort a or -- into think other over following if trajectory have we content seen folks of non-fiction on a have it’s really I about before, that it’s international, talk heard of new

And to their entertainment to the I to obviously, enjoy goal modality mentioned fandom. a and new ways you here, members our give more and deepen is incredible universes metrics, reinforce, mean, fundamental those

which the we are are to which drive engagement retention create is about leads and have on And we to people must-play service, metrics the facing they service that buzz off stories motivate with with do that effort games talking the up. incredible to games, an people consumer that the primary side, that sign and

Jessica Reif Erlich

game there monetize licensing IP games, directly advertising for Are plans or to example, developers? to

Greg Peters

currently. Not

based are we very for for that on now the core we really other members, right which that initiative, of directly. consistent business. the The us have games, is done parts IP So fans IP focus what how is our in think us bring to games on to thing with do our to of we best we end do

want experience also, to creators of ability games And building to not is forms monetization, player about be ads or a that it to think in-game differentiated have about the enjoyment purely of giving the believe whether worry of we other and gaming from part that and we having payment. perspective game

Jessica Reif Erlich

in So change of Ted, I India, the recently one panel the fastest to think, were And right India… one the you global now. mentioned maybe and a biggest year, turning really of growing the world you which earlier is in in pricing markets in you markets at said Spence, XXXX. the

Ted Sarandos

Yeah.

Jessica Reif Erlich

bit that this little change talk this actually are you where something in we plans? just -- real see what a market, term about a are like, and your it Is we … profitable the you your you your I have that Can given But you Ted, fastest local think, of that from is market year. last is contribution? revenue longer increasing can growing statistics said XX%, or XX%. up XX% engagement originals

Ted Sarandos

pricing grow and about little Look, I market, the revenue, more can can earlier you when we talked therefore, have we see get suited think what engagement. that we we and grow to the better a

We that really have just content get to out people for. the flip

We show in films is a our country we people a the are over causes both and it seen for that service. that just great loving and great -- series. our quarter-over-quarter, Naidu steady excitement of deal all a have the Rana now the in improvement

the it’s can have because together. do have -- we and you it’s and love pricing business the product to methods we enormous is right. they product that people population big them a with prize, -- and Now we again, that they that the of and have an to India payment a got get got entertainment-loving

than the got India. have the creative content ever. we -- It are doing and market in we local like a very they getting you part always content, better we of are are specific is there’s promise local grow terms in of pricing to continue to traveling more So also their and is but seeing lots

RRR, the feature. for an I over the think, incredible Gangubai talking film -- all referring was that movies which really you fantastic that world Best I did and to, hunt Foreign was business in the is year, about for Jessica, This what Language may was this be like was

our and do with we market and continues all the look you can opportunity continues ability to at things scale say India. to So to those quite the that grow, well audiences as throw access these in content and

We against we that are ultimately we will think do investing still ways are I long from that, and it in India. great

Spence Neumann

Jessica, we time last for two have questions, please.

Jessica Reif Erlich

Okay.

your just collaboration La So expectations outlook announced you most moving you or you an and closing you seeing are eight products? other have for what I when collaborations. us iconic Can but consumer an mean, on revenue -- the on products. also for to your update are seeing shows, like accelerated -- Casa give on

So opportunity? your I like to are building know now that provide it area own that seems incremental just up content seems an you

Ted Sarandos

Yeah.

The with primary some business deepen are we for looking We those our products driver fandom. It general, continue to consumer their it. shirt revenue. really favorite fandom. the in does notebook their their is build carrying grow and shows, to express drive the really their talent opportunities or favorite ways films, for to connect that fans But, help to by like other people favorite wearing and

see can And also or even world, them Stranger experiences, the the experiences and us live excited a successful you the revenue, world. all very Things that in of stepping kinds through the show way of to are drive the about of fandom in a mostly we core the travel experience all with stage around Stranger these mostly newer into Things that super one Bridgerton it’s that there’s amazing strengthens stuff and coming in it business. keep that mind but But build

Jessica Reif Erlich

tiers, to password example, out has are so where the a two just have you one I they movement rolled you have any subscription, markets guess In on going between that? password sharing. or a for follow-up that household like, a like premium Great. the one, seen anything sharing, last standard

Greg Peters

sharing structure people a or Yeah. having is markets, market-by-market. that We we are know especially sharing out, markets, pricing then, practical informal essentially got price pay consumers in price-sensitive to us see situation So fraction it. And some oftentimes, in this by subscribing a they effects, sensitive for is that right? different very But -- some which right? and of of then also those from as to a actually premium and

that for extra the entry see that, rationalize plans prevent new we So to price. having things individual of be that relevant those that some being or level shifted those where them associated plans plan structure, able ads a countries people it’s member like password as as and changes have in off we with the sharing implement sign up of use and also

are of see sorting. some that you going I think to

members, And all Ultimately, again, it’s us transparent this better business. more more sets pricing those those different that to with connections systems more have work members the really sort the we have think -- relationship have have correctly, up plans. the we different with for it have to one-to-one members to structurally to a of on

through So getting we point. about excited are that

But very as again, where this specific really way countries about I that, kind some would that of countries respond a casual characterize more about much was country sharing. other and approach, wasn’t it

Ted Sarandos

just that that is me we those cannot way without. we and could to over ad sharers let Jessica, people grow I the that just live the win if content add quick, the tell the plan way have And close get this here season biggest you before past that QX, the Night history, our because success. Agent incredible of we are this on sixth quick we alone, front, doing how in television original quarter became real our into really

second of Season have seasons third grown have that original and incredible Georgia, all shows first created seasons also from Outer a For X, of returning saw a season Ginny season & of their shows We that You Banks, Chase Glory, new the our launch ever. who stars which huge We is Stokes non-English Korea have biggest Antonia from Cline and and Badgley, and saw now Gentry Madelyn around fan world. The bases fourth like and Penn

People, multi-cam with or like did Swing. Full Place Murder The stars, big comedy with Show films really Mystery big in the and Mine, incredible unscripted space Your You with well ‘XXs had X We

quarter, thrilled sharing to and ad were keep and win up of this to also supported So past those with have that the we over to the in content that super results tier. we accounts grow order

Jessica Reif Erlich

You missed Beef.

that. say didn’t It’s You incredible.

Ted Sarandos

is entertainment people sounds said the taste have lunch. how for different has want. that fans things a hard this are the to and when it’s have list to why it’s a a good talk varied really quality the like missed on sometimes at that’s that we Jessica, about it illustrates laundry list the breadth we just our very you different what and doing everyone at of reason I the And remarkably scale. long do, hit really content, that is,

Greg Peters

as I to amazing And plus an Beef one being drama, love…

Ted Sarandos

Well, that’s…

Spence Neumann

True.

Ted Sarandos

start kicked acclaim, and hope, to it’s again and -- loved critical this we of by to has way, it’s likely quarter another having the but that’s well tremendous off a do new it it’s By season and off fans. example awards

Jessica Reif Erlich

that... with And Great.

Spencer Wang

home? Ted, you to want take did us

Ted Sarandos

Yeah. quick. to I just want you a tell

a We and terms really good off pleased future in is quarter. profits leading revenue home. streaming engagement, are with is the entertainment Netflix the at streaming of the and start. XXXX to of service is

pretty nice QX released of XXXX, by margin. any broadcaster U.S. the Netflix a the in just that was streamer engagement, data most yesterday, on of Nielsen or watched in So

with like We established amount XX% we have time U.S. -- in and TV watching, total tremendous our and are markets of of even that about the we have grow, U.K. most to of plenty room the

can, we growth to profit, as and we we want we as it. are believe are not and profit and in we growing to, we would not we growing, reaccelerate and are both as have revenue we as profitable, but on are path On fast a revenue fast executing and clear

we broader to sharing You rollout a grow and business. that to QX will see ad continue paid of are in going

And continue cash we also grow grow our to aiming flow. to free

said increased about billion on this we generate margins. $X.X and in to are going As cash free year, we

serve we base why have paying account potential have that this larger to grow members that’s continue that of and remember sharing been initiative on so helps So long-term and we Netflix us can execution. a focused

that by quarter for deliver just we deliver it competition bit our keep doing Thanks, And every than every a we and our business. we as a a must watch TV we going shows, and are buzzier to our to members, So our games, improve working more movies, creative faster and month, keep when bit and watch the because year. to quality Jessica. of must marketing, have every must play our variety better doing discovery,

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