Netflix (NFLX) 18 Apr 242024 Q1 Earnings call transcript

Company Profile

Participants

Spencer Wang	executive
Gregory Peters	executive
Theodore Sarandos	executive
Spencer Neumann	executive

Call transcript

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Spencer Wang

Good afternoon and welcome to the Netflix Q1 2024 Earnings Interview. I'm Spencer Wang, VP of Finance, IR and Corporate Development.

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

As a reminder, we will be making forward-looking statements, and actual results may vary.

Spencer Wang

With that, we will now take questions that have been submitted by the analyst community. with and about forecast. first and membership begin results our we'll some paid questions reporting And

expanding at you could So said since from decision data KeyBanc. with this in Justin starts our to success Patterson initially. thinking for first membership how these eliminate engagement, of stems And question, stop reporting XXXX? disclosures? I'll -- in about Why please you talk you it of quarterly comes Greg are the Greg, ARM direct And this?

Gregory Peters

Yes.

As revenue and we've to multiple tiers, to connected points things we plans with and evolved and across continue to feature, in the pricing directly noted letter, adding number advertising we're of evolve, model like member price aren't going developing different countries. things members. We've extra our also our that different our and evolved

I different. price increasingly going to think become points those are

did, that the business. accurate means each the the math that has of So member state in incremental all that of different business all increasingly historical of less simple price, And is number impact. members that, capturing a we monthly times

change the this we metrics really So matter focus wanting think business. of key most the that see we motivated on what to is are by

you we're and of also transition. report little regular time be thoughtfully update we're those. view. We'll going our give on to everyone flow. reporting. margin, to OI, just bit hit OI income, major announce long-term on certain So We'll to of more silent It's going do want give adjust on to and a -- we EPS, members to going add new milestones, as a when guide this revenue be all annual We we to our and periodically range revenue, this a grow net well. not of We'll cash we'll part free not guidance on

subscribers annual continue to guidance for we're to next next our report XXXX. revenue which links until into of So QX going year,

is approach long-range is evolution bridge the provides will profit. reflects ultimately, better a that provide engagement, internally consistent and continuity, and we this and that manage business, an more how we we revenue with effective the But that matches transition. think and So think to it expect and of we

Theodore Sarandos

different Greg, Netflix. biannual engagement, engagement We into both building report, industry currently and leading on we look transparency that engagement current indicator best to report believe would report And on leading to a of but viewing make at And we because covers time. retention our that a look progress But tough. of with the granularity, on as over why is we're about focus reminder, offering, in on satisfaction customer even can and our is be in kind XX% ways engagement Yes. it it viewing which we and granularity. our our going easier it's on -- the for and the we -- regularity we'll track acquisition of on indicator our importantly, engagement. And single

they watch grows around and profit, happy Stars. North all So our do revenue engagement, longer, a, they members more, stick which

those that success are the believe in And we measurements so -- and of streaming.

Spencer Wang

what along Netflix ago, I'll explain and/or X than a paid-sharing asked changes are the inside member stopped you, the adding industry Thank Stanley, What Morgan as first In of to XXXX? company move doing Netflix today, Ted and in initiative? broader significant excluding today the seeing we're of in better question who growth improvement half you words, other us Greg. Swinburne Ben years next Great. members. from the the

Theodore Sarandos

streaming. weeks Love first on bed about all Blind, Last about of had film quarter, XX Grasela, this hits XX morning. out last #X the Avatar, That's last #X [ would of weeks, we Damsel, bounced a we're talking at say thing X the of series, the The of the in the thing great the Airbender, and I months. out why year, That's we're doing is is like Problem, thrilling members. I the few we've question. we've first the had our we look in just set I'm Three original X the ] that all Body of

what and of do every this and to that consistent have So to and world. in. dependable shows, films games, And do it business over drumbeat we're the that's day, expected and hit we the have that's all we

about A that regions, Once, of in about cultures and doing see multiple the Buzzy, quality Spain Fool quarter, the So and how Alpha from you and and if multiple look months. that Baby this Day, The scale last Society all kind Gentlemen, you think Me few I we're Berlin, months. Super last Reindeer, last from of all the in Males, just all in Scoop, few Snow, U.K., all the at

for and that's building keep of of fairly keep and season So initiative of one things that Love we're and our been better Physical and we hard-to-replicate really us. local the like with success for teams finding we're those better Sweden. a And building just huge doing recently These we getting kind things new unscripted, things all every is at in XXX second of on; which is that proud Blind Korea that. and that are building day

possible and to without We both. of remember, engagement of this, tech do that need captures great and product. So and is -- none all

Gregory Peters

over for X.X for ability the people think to that that titles. is those world, all that mentioned we from billion will that's And us Ted, which happen audiences fundamental Yes, get something events. anywhere. this of do that find exciting. us to to I number the is look our at titles over of I we're that to all to globally of that making effectively part all the live is think enables that product titles the games, could is is those amazing to series, key of largest those We letter. But for with in better you that constantly get great mentioned, a seeking find love, folks audiences entertainment. connect super those mean we then right. people Part they titles component I applies this who think But as which film, just they

So do on And -- fandom impact the to seek that cultural titles launch the that have. we as zeitgeist course, new when we of well, that those conversation and that maximize the and positively titles. we and then, all cycle the feeds into

and things. great our we to members. make we We So of in a doing what that if It's at are can that's faster, titles better? great whole for creators. for great And all little flywheel get what for terms of we do do seek those then better, spin better it's bit our

Spencer Wang

and Greg. you, Thank Ted

we There's revenue question Barton Rosenblatt. from have along, about us Crockett Moving our a guidance.

for full So in question drives to first year? to Spence. and XX% I Spence, XX% growth this you XX% So second the the will revenue year. XX% to direct through can what the full quarters growth revenue this of deceleration year the with the explain compared please

be Secondly, XXXX? lower he QX a question also of Will about has higher second or growth. subscriber than that quarter

Spencer Neumann

Well, right. Sure. thanks question. for the All

So good are full outlook, revenue overall, in we first, growth outlook. really regarding year growth I about our feel where

business XX of year. hard done clear about just so and back want work the 'XX reaccelerate and through So our the really reacceleration Greg or about, reaccelerate the started improving which a and that of lot We've half it of months be revenue out Ted combination rolling service, to And I over launching sharing, to past that. in paid built and our the business. through talked core ads just

with our lot got end the So back of growth against. tougher with And execute our hard still to those 'XX in the second a our high first consistent comping those growth half at year. really the still of growth early the kind the our half, comps. And is revenue it's comps. of in of in is in off half We even forecast,

We our letter, that also been in -- dollar, of with a -- a as strengthening some you there's headwind. FX that's bit the see

to but provide to like guiding really -- that's for work our share year of is we the homes that it's started question, that only revenue where the goes business. And it's than we're of and on healthy kind not -- to too like double-digit so in aspect. for are in deliver, our I this every millions business, just of opportunity. We're X% growth reflected we're And And of revenue But guidance, outlook the into going the advertising. the I we're growth what's what's specific XX% still in of kind which set year, this not just year. range. And of really half back operate. double-digit which real TV we bit opportunity small hundreds every 'XX. Netflix hard We're see country a the guess little in but There's of us. we'll guess, early members. throughout out the we're sustain the of full we getting to the our for is roughly what growth So of revenue maybe And healthy in of ahead less a

So improve the from is to, more value. Ted, service, you key continually heard our Greg and more just engagement, as member drive

have that, value a and able more price be We'll also highly members. we'll and advertisers. we occasionally do for engaged add big, As to have and audience

outlook. -- So good trying on about to question, of part guidance, I we guess but more remember, feel And that's the 'XX second I'm the the sorry. to come I'm then

Spencer Wang

-- the I'll be bad guy this can take on I one, Spence.

So or in lower expect you seasonality. you as indication of for than question We know, Barton, don't formal be that fairly we second prior QX do letter expect QX give to was, subscriber the the an the give year? did So guidance. you growth typical higher we subscriber

QX year, provide and in QX than limit net paid color adds this So this the year be that's of there. will lower the of we'll of

Spencer Neumann

Spencer. Thanks,

Spencer Wang

No Spence. problem,

up on -- who's question, on X year the into subscriber Spence. asking versus ARM Oppenheimer, revenue guidance with revenue respect forecast, some to have those we dynamics for from will growth more of that and drivers how guidance Jason play follow to color So revenue growth full Helfstein the the the

Spencer Neumann

this take well? one I as Yes.

Spencer Wang

Yes.

Spencer Neumann

it's and markets, going well. the value U.K., in as will And changes mix of of year. of was a in. few member revenue it pretty similar you the of prices because kind primarily it's But changed acquisition we're last year, I'll price that our in only because some to where the those well. outlook see jump in been about to driven we of Okay. of expect And can you service. But QX, for what in the of growth. overall see the it's that's the chime Argentina, growth then, be to in terms why our -- growth similar all -- plan testament when is in local only -- It's by in Others and of improvement pretty as impact on in in really ARM a what's trends with and strength big ARM the and strong just be retention a happening reported year rolling mostly I And strong and pricing kind of FX-neutral. late Argentina. we're than on retention the are basis, small is tiers difference FX-neutral U.S., of are France, full what not seeing X% through the that saw seeing paid slate, devaluation, other sharing even year growth X% are pretty QX, it's continued in well. plan And those the to sort reported currency it the that you want trends. But countries between QX. We about see, can And you the into some as since clear, tiers. you we think we've acquisition markets,

you're the of in that you most some term what also the in we this kind our taken really. headwinds in X seeing past pricing haven't see So years have for ARM growth mostly near the we QX. that countries is in year fact And profile

You'll one, sharing. probably this as which most mix see throughout is plan roll year, we out some that, have this of shift we paid

lagging can and memberships, off SKU price So as of a at clip, tier I'm that the spin our a than growth we're see into I'm as our little QX we'll we'll they there. we reported tiers ads revenue-accretive, tenured our reported see strong year, And that's about. bit in mix also sure talk -- to new numbers and that -- while it's growing growth it's a you well. sure we bit outlook a you've seen tend what paid talk lower a for is -- plan as of growth members. And monetization about our in highly into off in and as spin nice

shifts. mix country some have also We

some quarter, forward that's of a there of combination in more probably healthy growth -- really whole healthy ARM strong really a managing is our as to XX% pretty a that of that modest advertising growth scaled, this year. And still reported So in way much of in larger the the growth members of see kind this key revenue revenue QX and the it we're for to business all ARM in highly results you transition but into for throughout solution across those paid-sharing into -- of strong is a strong overall revenue also with and year. factors into we're But build over pretty foundation base modest engaged the kind again, and audience a and durable for time for outlook kind building paid kind growth households. and penetrate going growth

to and So see revenue we'll our of it kind we some growth, start that increasingly in year. this mix see of

Spencer Wang

being do continue from you on years? to margins? Can that Venkateshwar present question media margin next and comes you path legacy few which trajectory a are attain comparable the for Kannan the growth for from Barclays, to Spence, expect is, it's Great. margins you,

Spencer Neumann

Kannan. thanks, Well,

Our focus talk each revenue that. and is That's growth what sustaining year. a about on healthy lot margins growing we

about We XX% And in to of the And talked good targeting which year we're guiding up what year, about start from year, when XX% this also delivering. is it XX% last from a we've tick before. margins the up we in we that's been XX%. feel now were year the the letter.

cash in growing margin just growth. historically content So with to we like balance managed growing flow. profit the and have well, disciplined We've that investing into we'll take say pretty a growing balancing I'd improvement investment, margin growing profit, past, approach our

margin continue that. margin and term. expansion long profit we'll could see grow annual investment we year FX to But with opportunities. the grow again, lot bounce any around a we're and each margin expect of a amount to profit given should You continue do to bit committed year, of the and But to in runway over other

Spencer Wang

you, Thank Spence.

said we of were Capital. turn inning to estimate you floor subscribers with that ago, Gould XX Our X passwords sharing answer UCAN. Which next Alan question passwords? XXX with question. borrow sharing? comes How years Loop do the I'll to to you still paid Greg from respect are in And enforcing in over million million many

Gregory Peters

Yes.

As last the quarter, we're where paid-sharing at operationalized we've point mentioned the work. we

into all of that do parts of iterating series, translate we've like building we this So that product to on mechanism on it, entertainment that, great improving time film, is our games, iterating just testing live we're and part now standard and more over of events been significant it revenue. And value experience, continually. with the

folks cohorts more back, members mechanisms, rather numbers, this So than we specific rejoiners, Netflix we about or who whether thinking beyond borrowers to think developing or were more never or us, coming that sort with be before interacting ways more they of member. folks are were have call folks as specific effective them a that been really convert they

be better working come. the we'll years the even improvements, the for on to expect several just business very offer we to on clear, So nudge like years, decades this we last of or improve translation convert. And mechanism, for to to right this get making in growth years right come, see we've right that and opportunities got I line But them and deliver always to action, this be the next want sight and the We've much those better find to contribute the And found to process. several at believe just value improve process. we and something it will right time also and beyond XX for to to to call still this better.

TV of extra get extra yet million-plus on millions into those extra earlier we're of Spence base. And of effectively continuing grow mentioned now the while as that and optimization, fully effectively growth overall we levers too, is allow think we're to is like get This them which has anticipating important. our more smart at members, noting become to value, of those revenue, more business up way a and hundreds call, members. plan us sign more part of including I ads households could mentioned to things come. the and XXX like subs, pricing drivers improvements that all So to make folks membership

So part important an as of are those model also growth well. levers increasingly our

Spencer Wang

this on of move around now a I'll advertising. Great. to series questions

which of JPMorgan. hour most of for you take comes minutes can that an be pricing Greg, of you How Anmuth -- scaling do and people that hump why over very are from still partner ads ad of important Doug your a first right get tier at few good one? think the to when you The about don't the adjustments the What make experience price? drivers a and plans, you marketing? could bundles

Gregory Peters

the members, I mentioned in everything All taking would say grow playbook, you about now. do we've And applying how things our our you matter. tier it the we're learned generally and to entire Yes. question that we're ads

So in marketing that the bundles, of clearly, quality in integrations, offering; an the $X.XX are low means mechanism. Low we and our especially the device iterative load important at non-ads to price, going and to for for value, ads downloads. sort just industry-leading that's as multiple to be entertainment We streams, think increasing will is we've tool linear be part tools a that great growth of TV HD when awareness important building. experience, the means about our important awareness talk full partner to United quite is experience, of channels, got. continue That's an are integrated. it and in that's poor. States ad example Those really ads consumers. especially which they growth all That's relative countries many our of

critical that's well. So as

mechanisms see scaling been over how the of our the ads and results of of quarters. last and can these you has couple more think So I tier all leveraging

quarter-over-quarter quarters XX% quarter-to-quarter about That's after up quarter. X this So we're of growth. last XX%

that it's even the more additions rate me, exciting high For absolute obviously, each indicate as that to that that, means we've much so the grown because there's see stay base growth numbers quarter.

So we're more of got much, we've We've ahead of work to ads. for more ads of us making plenty there. But There's progress terms more effective do go-to-market, got more in to technical terms scaling. good look, much do on features, in products.

Spencer Wang

and comes next ad between tier? LightShed. X-part the Secondly, from Great. your us the the that on $X original meaningfully lastly, a on range subscription advertising thinking optimal of then one, question Greenfield, $X look our Part in outstripping He to tier up year? spread the ad-free around question. give comments Greg, Rich was can it what your is you update the advertising excluding has you not versus fee, would a ARPU if supply was can your demand? ARPU, sense last And us the like

Gregory Peters

take maybe position fixed price much rate, customers, hand changes not like right on We a first along I'll Spence. rates, don't we've sort an to the have I the right pricing. And signals really our general, that to that use take think really sort with we to plan probably and one of things from of churn pricing pricing then it's in points ARPU/ARM iterative a get noting spread. is operator optimal Yes. worth position. us And done path conversion like also the to guide static

offerings But think monetization going to evolve would a to offering, and and term equivalent good healthy As position. and our improve that is land non-ad be continue for overall in it we that's us long between for roughly the to us I as general guideline ads change our well.

best. And they them really on comes which over I'll then to any really plan member for it's Spence questions. about choice to and given down ARM that works it a the what member, serves think hand So best

Spencer Neumann

Thanks, Sure. Greg.

when we're what ARM doing and our as launched terms quite terms discussed fast business, of relative inventory growing Greg first been your Rich, in question, we how a we in we've now said, to at So of clip.

an an products. kept early us that's our a hasn't that increasing that out highly still and growth environment, And is at But scale. so and very fully up monetization for our we're very in opportunity building as content this because premium engaged -- audience we're still sales scale with ad capabilities inventory in

as our CPMs we're building remain about. capabilities, Greg strong. And talked out So our

to of great time, the just nicely, engagement is over So it's kind follow already revenue base. going which is small growing off and a

revenue that because But in So non-ads offering. well it now, be a time, over really, ads for to kind of as is ARM with of drag kind subscription right similar our of means a of -- ARM we Greg what on tier, to then of as revenue bit we're on expect under-monetizing supply. those ads said, a our is combination relative as

that's we're it, to it but time. think over So building how about to

Spencer Wang

in are question And on Holick of from approaching support now base scale a So comes then, advertising a ARM contributor drive commitments follow-up and users this upfront Ted, ad year's a is you How could that. upfronts? Last start maybe you that do the UBS. and John can meaningful revenue Greg, XXXX? change advertising you to believe in perhaps, at be growth the Great. of to

Theodore Sarandos

very Look, and go really with Yes, this course. incredible very, that to of. is proud upfronts. of our we're this excited We're first and advertisers second slate foremost, share

of Game, that in of which one; Bedtime the seasons The get big limited a new it'll Agent, shows So and Banks; to by Squid unscripted a longer the right and are brand-new our Cobra of of Shane coming and like And seasons great Bridgerton Night Tooth returning at U.K.; about. we're XX's Tom a shows year, events brand-new our they're some look of away, Brady Show; of Eric, way show, Tires; get that Detectives the look Paris, super Sweet Kidman American brand-new also, DeBoy out upcoming, Emily look which with, coming the Foley; an Carry end is and that is we'll an Brazilian a about. And really Peberg; Monsters we're On, so to Murphy with Hills Murphy, Foley, iconic early the movies Lyon animated year, incredible -- and One Spellbound. at Shriver; Nicole Eddie advertisers; this that which Formula great really going with Eric great to role, second limited The upcoming be brand-new then example; excited which series on a new Evil Outer series thing our like and Gilles' is, the story Axle this some Heartburn Cana, half like is series again, and Prime all-star and like Roast, limited like our season Cop cast, from up our Kai, excited even big Ryan most of and at going Meninda series Box at at original up with our from what's share new driver his I in the feature, Beverly Back and year

lot we've the got at So store for a upfronts. of audience entertainment the in

Gregory Peters

Yes.

great I look that brands reengage advertisers hear the mentioned. it's an think an had offering growing got roster. as this of titles. We're of I think of and just with. We've got We've to incredible with fundamentals that again rapidly is to an those foremost, to first the tier. opportunity power even connected our super the ads members It's grow list we've to from and the scale, our that engagement at be opportunity mean, want request from excited we that's is. our That's to on further. advertisers. We titles #X what connected

on So that's products. like technical measurement exciting. We're ads features making progress

to journey do we to an there's to a -- get course, know of then they're know advertisers they're to have continue excited we're package have potential that that the to that then that in then opportunity this to really, we going And get work in there. is that space. us because of input from realize all to comments we because bring to more continue to just So have plenty them going and to want things the out to on. And go progress and really just they're to and going

to off grow already growing relatively a base And substantial so of in we're of We're against impact and the I terms small say continuing would here. big business.

into quite it it's to though takes material. So grow where it's that even a the point while growing quickly,

So that increasing and further we 'XX forward increasing then in look to 'XX and beyond. in

Spencer Wang

question It's why more. now I'll And to first us questions direct rare a around one, don't Ted. around to Great. spend this several we I'll content. transition

why $XX in Given sense what Netflix than make even this license cash aggressively? in backdrop seems to acquire it content spend very favorable a content, more year? lean to Could like current and more for not billion

Theodore Sarandos

of think spending also our in always Yes. about money by producing the look I it grow Independent the again, and little very lot our we've of been way -- the drive very for should can the a content, get our on how disciplined more we're ones business right it. bang and of availability -- focused shows the well we well And business. have you at opened the we we content. And licensed for we buck that and by on really acquiring floodgates will think licensing But we're a the sure. invest

we're So spending I comfortable think rate that at pretty growth our behind our rate spending current current of level and of just that anticipated of growth.

Spencer Wang

how and second-run free license would your And Ted, content And more -- licensing a margins content. flow? question is, also cash second Jason second-run his about follow-up is Healthsen's or impact

Theodore Sarandos

the budget Well, the is budget.

-- against our content generally. economics, that's how our we've cash flow P&L gotten the So spending flow in against it's on of free spend the we're part content. all close And pretty cash

some have would you that, add very -- much want to unless to on don't Spence? I it impact color think much So that,

Spencer Neumann

prudent me discipline it about original to be I we and the to budgets, yes, you It on it. I think, I just love our constraints talking with, I opportunity happy. with all spend discipline. And content the Ted. license mean, and more but makes still is and into agree say, spend of -- likely It's clear, our is has there majority of like to the -- content opportunity, but is as be. vast continue content programming. been you No,

too, is content the great original but it content that for and variety complement with So we'll quality our license always our yes. members, for still future,

Spencer Wang

make Specific that for Next the Jake you're How question Ted. Guggenheim. Tyson the investing goals? and member is advertising about fight interested upcoming Paul-Mike sports the programming Jake growth that the Tyson What Michael in? are this from of characteristics of your in type Paul-Mike Morris, fight base benefit does content

Theodore Sarandos

and an phenomenal. those members also the of as it's to live with of So about of the developing our content of early want offer, expansion recently, eventized kind put to Fight, really days of the would we of Paul that we're room and folks I very watch we programming. and these it's around choice kind there's consumer as in our have we expanded and unscripted this been We TV And at like been and at gathering unbelievable to really way has living -- the well. cultural believe types streaming the something Jake that television magic just animation, together back moments, most Mike the time. controls look something the control, consumers, hands that of the Tyson incredibly in games. On-demand television moments for in film same and winning all be of over the are part which But

for the part of that, excitement me, So this. is

real with sports those our all going be several think there's fight coming the of of real to this As real new Netflix. it from Netflix We month. fight have have world beyond the XX to time. And fight, lot we're -- waking every in itself, got live January, around week up Jake love people watch judging our WWE the is, a in try core members of be it's we've going night in it. the Tyson the the continue Joke time. of Festival comedy Paul-Mike excitement things. Raw weeks And going middle on things going And the do next we add from starting nights live members to a of in of lot a a But And over to watch value we that's to early be to coming the to to

Gregory Peters

of to members these well. I in relevance large just about, to what's as that think terms that talks cultural advertisers that's has what as worth Ted relevant events noting

opportunity an our for it's expand So offering give of to access and us culture-defining those to advertising brands kind moments. these

Spencer Wang

a Ted and that and But is to event, Thanks, personally as Mike And looking on... money my Greg. I'm follow-up forward Tyson. on

Gregory Peters

He's old.

Spencer Wang

primarily more doing continue the scale what follow-up bigger question Ted, Yes, sports how going. bigger he's entertainment? potentially to sports for Netflix gain around beyond you're But and sports still you a strategy change as to and become could your leverage, today in as

Theodore Sarandos

many the do of this but said anti-sports, all we core including of And profitable not think but We growth. in programming, I at sports. everything kinds times, pro

Star to of across an could we all X And do wide we profit. of quality we opportunities, So and revenue our entertainment. increasingly is will if North engagement, variety drive grow that find those,

that, if including we when feel repeat that can opportunities it for So can look do other WWE, we things, sure. and those with arrive at in dynamics sports, and if we'll like come we and did in deal which our those we

we the you've building believe an business we continue grow So we've just I seen. that path, to leader. a of without loss think that can -- benefit as on And it's had enormous

discipline So on think I putting we is, to our we television look that to going when the opportunities the content it is do core producers and same of with networks about that the those at we're movie air. talk

Spencer Wang

Great. Greenfield film next question The from Rich LightShed strategy. comes from our about

rich, Netflix's than make "The Ted, New aim is Dan agents cited rather Times and Stuber. material frequent. waiting Scott wants it versus a from to we films, a more that become developing but understand producers internal it Dan aggressive own cheaper to better the come hard Lin York being to make less them." strategy from his So producers that and for hard believe find chief under magic article to there believe Netflix Everyone projects their to shift Help Lynn, wants Lynn to for team to formula. is recent movies better, us we find communications stating: new cheaper

Theodore Sarandos

fewer this fresh that back just Dan be us remains variety to send couple thrill you did to I that. We them of quote just I and miles that to Times participate though and job clear, strategy joined appetite but Thanks bringing of -- to on is article make make an to that article. has all there publicly, is is making was And organization. would excited would an have say appetite York our a to nor example I would have make lot our we films, for super unlimited and Bringing we amazing and and them an great that quality, a weeks in say, thinking want Even Dan. of better always. to she's not and we a that our great join films, course. We're Dan that want and new our films there of board we want question, company. New We because from a to them the they hour. be better, to content of want great. ago, XXX he's Bella running doing no joined Rich. said to He made different are have movies. we have tastes, content audiences, all

what very us. we for knows produced audience-centric from And a Dan having take of So quality that view is.

He As he The Popes. produced the did Airbender Back, us Two film the recently. CEO The for Avatar Last Ride of Oscar-nominated

audience the is Netflix action And the animation live hard define very business. his and So success really he in well. understands to really, in and

thrilled we're here. it he's doing So

Spencer Wang

is And from you? feel Ted next kick now trends on on. Could free Greg, question paid The update Barclays. from over an mostly Kannan comes to to please I'll Venkateshwar provide that behind So you sharing can first. engagement it add you

Theodore Sarandos

of we Well, important look, for every that, engagement of incredibly note bit series. actually that on. a report all is think personally everywhere very money. in that's every last to of operate. time, day, this we data. a time metric lot we #X we're that and the even compete And competitive it's data for and the the important streaming And hour in minutes had this again, competing said of that for satisfaction. I us, movie, is is to this we've of ago, you've customer space, important repeat going Nielsen X we've I'm where the #X best this we've over for for attention, the indicator X I just focused seen had because, share that that XX year to what got of Nielsen know up weeks folks tick And and little our according but it. the it's year, first XX weeks And the XX viewing

Gregory Peters

think you many as X times as concerned. can you XX repeat XX, that and X Ted, Yes, I I'm want, as as far

Theodore Sarandos

to too. going with ; I'm that close

Gregory Peters

to sharing, As with not associated work we've and to are lose who the some essentially viewers been have some going viewing on that due we that. we're cutting doing off therefore, payers, said, password

of engagement healthy. going competition see that. But view to hours are some the So next from that general Ted absolute result you despite and when overall our to strong engagement impact report, see as our despite that remains our think impact pressure you a noted, we

You States. But in indicated an we the can to engagement. do in also that ratings time of see in terms of view in apples-to-apples the growth it the modest Nielsen our United wanted Ted and TV stat

steady year looked not paid in owner called per we were the quarter. at sharing. population the ago So will 'XX, And impacted by viewed QX account be with the of It households. hours

of noise holding that's through of we pretty our paid TV sharing. And plenty good sort the mature that most in real cuts we and to still just a have even We're want I again, of So up, is XX% engagement sign than it think our hours engagement, around less right? reiterate, markets.

room of tons us. of there's of So growth ahead

Spencer Wang

Thank pricing you, plans pricing to now and going move of along us around Ted and and to strategy. I'm questions Greg. a series

in continue are is to Netflix ceiling your here for to King to can customer that Hall close from so And Greg, continue markets? further you you there a Wells and do that how think segment your Steve genres expand, content So we having envision If as expand from so, ceiling mature pricing? Fargo, content you do you base?

Gregory Peters

and defined at sure, have people ceiling. I have it where But actually more by let's we that that as invest go the as there. working winning, then, is to again, been upside more our around it call to add mature opportunity a the We us really, to that. value. terms process on that add potential tons winning, of an try truth, we most we've less can to bit and in markers think are in see continue entertainment many we markers moments to subscribers is continue pay wisely, ask our on, virtuous so really which the much don't the spent entertainment moving. And more value, cycle And little hours you don't of course, even markets. we it, a back There's set TV we potential TV how Yes. than are room more on XX% look Pay as mean, them a that we position of for before. of keep for We of a can

consumer categories compete X%. You the can in. use that spend we on That's markets and in between entertainment total and X%

making that a little to pay of go lot still value more. just there's us good at investment deliver a a happen, ahead ask folks of So and to runway more do job bit then

Spencer Wang

Great.

you the please Next there on is pricing you the the of U.S. basic similar color and Greg, in of you can question share March comes one? Canada? in going rollout on Bernstein. Mollick how Can is retirement share when expect could on And we progress U.K. why plan from if a the that take don't any

Gregory Peters

Yes.

higher X. you shared saying, this further see make more of ads prefer. plans transition. they what always that versus on all streams and definition, well see and know started that make a what our now 'XX so announce QX Part members to at to in we want in work listening we're before very of X a to any less, -- is is more nothing plan us we goes. Yes. We've planning we've we price. lower similar offering that got for this a but really in can going to it ads-free retiring we've we've as saw we this the do moves, And smooth how members downloads, goes with process paid strong we hopefully, a of hard our sharing, countries. They're going got As as And for our got to for some them. course, were get And think change We've you the to Canada our our got U.K. choose to without letter, we that members, basic basic

Spencer Wang

on Greg. questions you, Couple Thank overall allocation. of capital Great.

these So Cowen. primarily TD John would Blackledge be of Spence from for

investor evolving you your change? -- about how new allocation investment-grade talk see with investors status. will please mentioned Can in You that strategy the letter the capital in your changes with

Spencer Neumann

business, really And quite strategy our dollars to what billion of still of It's for Yes. Sure. status. principles going evolution prioritizing profitable beyond question. and shareholders same M&A the capital repurchase. we allocation balance core a of to -- reinvesting growth terms that's selective it on have better that share Thanks ample investment-grade policies to to reflect liquidity and sheet is. for use returning the maintaining a with and in our balance cash really healthy several by return through excess cash the we're sheet financial our modest in anything It's minimum

-- So of on we balance that we're X balance billion won't sheet solidly be months only sheet, there. of months few going of of now to on the a bit is hold dollars same to really, revenue. will the cash revenue the efficient equivalent we're The have the grade, several we while change a more us marker of investment that still allows

we're do our going we build-versus-buy to kind We also refinance those don't as still value to announced our kind really sheet that from any historically us revolver, maturities better is We also that of acceleration kind to to with of which nothing shareholders. We've cash access capital debt existing kind want billion, but return which we been now And beyond predominantly. M&A. select plan And also was of stock But again, lever mostly our and today, billion that, build flexibility. through philosophy that to balance we'll approach. -- a cash planned, gives $X upsized more of up strategic then, to -- up And is through there's $X efficiency. right company buyback.

Spencer Wang

to content from on of have you see you beyond an level This exceed the ] on X.Xx would meaningfully still And are case? you. Great. ratio. comes what Last the your opportunity question the business appropriate to that capital framework? [ that Specifically in Baird. spend-to-amortization past, for need referenced of a Is can allocation spend in thoughts XXXX? the for What Vikram latest

Spencer Neumann

It It holds. Yes. still holds. still

really of the -- to managing of kind that. is So we're short still we're it basic

as focused acceleration said, to our So continuing driving our been growth, revenue we grow that of our business, profitability. we've on grow

be do we our into there. as areas have but grow highest-impact we to to expect investment that, would also continue we the quite historically content As disciplined

free cash our want to grow flow. we So

Greg profit to free revenue to lot can increased cash content we that And believe still relative opportunity we cash And been of that Ted X.Xx leads those growing all flow. talking manage kind about. overall So to spend that the margins, gives expense entertainment growth, a on P&L. spend have profit, content the to and categories of into and of us that roughly

Spencer Wang

Thanks, Ben.

We have a few more minutes left.

The consumption? questions. up The few can from of we'll Eric and both Sheridan competitive thoughts one And short-form next comes higher-level Greg question with wrap a on impact Sachs. from Ted what one. So I think this tackle video are Goldman the is, your

Theodore Sarandos

look now viewing. binging when the it. form of ability and to and giving lot of on they what I how minutes is short episode how do But of members watch What and look at at quite So XX -- to YouTube are some of people right have a more our another. I [ complementary the at watch their ] viewing -- is it short-form the to adjacent watch TikTok, and series a I some minutes. they an they our our only if have version XX time choices with like and So one when much have? do

shows. that doing kind increase fandom sensations things trailers the day, our expressing like crying our creators their of for our shows or Wednesday ugly So watching become one viral actually a fandom all or posting those of dance and

viewing to with both. finding of content competitive example. that being is by always of who this media the it with that other Now YouTube, way right said, same us. balance as of provide The been is The some art companies has of directly

So out on have to point to as them voices that a storytellers the way eye would got next have great try emerge, develop and on new generation our well platforms -- these been also of I into them to we've Netflix.

Spencer Wang

is What as great in for focused Salmon think long Greg, our from please. to and to leverage opportunity What final you AI I on the that Great. to emerge And turn technology storytellers should over continues Dan take that Street term? this Netflix of technology generative think New we'll for do near Research. the be question, quickly? I'll

Gregory Peters

leveraging technologies largest foundation the that Worth and advanced X our we've Yes. I been for are recommendation almost us satisfaction most technologies find our for think, members. audiences ML decades. titles the for these for These systems noting, help that like deliver

involve developed think adoption emerge how application and are technologies that be our excited to we're all improve we've approaches systems of do the general and also things. that we to and already continue developed. And from those in capabilities positioned systems as just these well developed to new we're of those So and vanguard we've new

ways. on creators for great the that their focused that what don't to critical deliver for great them, and to develop incredibly to through making is be even it's focused more also and deliver changing. storytelling. great opportunity We new stories, And to tools series, hard on? stories should and It to have games. stories and thrilling for role incredibly them film, in through I members. And we unique our think allow storytellers be tell compelling in through storytellers it's That's the have and think storytellers should complex a that happen, we see great

Spencer Wang

now Great. And out Thank are time. you very Greg. we much, of

to So you And to earnings to you our taking quarter. the we I for into Thank look all speaking forward call. you listen next thank with want time all

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