Netflix, Inc.

Good afternoon and welcome to the Netflix Q3 2020 earnings interview. I'm Spencer Wong, VP of IR and Corporate Development. Joining me today are co-CEO Reed Hastings, co-CEO and Chief Content Officer Ted Sarandos, CFO Spence Newman, and COO and Chief Product Officer Greg Peters. Our interviewer this quarter is Kanaan Venkateshwar from Barclays. As a reminder, we'll be making forward-looking statements and actual results may vary. With that, let me turn it to Kanaan for his first question.

Thank you, Spencer. And thanks, everybody, for joining us. Broadly, Spencer, if you could start with you, given the subscriber numbers, despite your cautioning us last quarter about growth, all of us can't help ourselves from getting enthusiastic every quarter about your subscriber trends. But maybe it might be useful to just contextualize, you know, the net ad number this quarter. Could you help us understand how the gross ad, gross additions trended from Q2 to Q3? And would you expect gross ads to come down a bit sequentially? And how much of this is an account of chance? So if you could just break down the quarterly sub numbers a little bit and give us some color, that might be useful.

Yeah, sure, Canaan. Thanks. So first, sort of stepping back, if you think about the Q3 subscriber numbers, it was really very much as expected for the quarter. To look at Q3, the biggest impact was really the first half of the year and that giant pull forward in subscriber additions in the first half of the year with When we have that much pull forward, we expected and knew there'd be some level of slowdown, and we tried to project it as best we could. But it's super, super difficult to forecast with perfect precision, given all the unknowns and factors. So we actually came pretty close to land within 300,000. members on a member base of roughly 195 million, that's pretty much forecast noise. And there's a number of ins and outs, but, you know, the general underlying metrics, as you say, are very healthy. So retention remains well, you know, at very healthy levels, better than we were a year ago, acquisition remains strong. So you're just seeing some kind of a natural kind of, because of that pull forward affects some slowdown, but I don't want to lose sight of the fact that, you know, to measure our business is really not based on any single quarter of growth fluctuation. It's really about, it should be measured in multi-quarter and multi-year trends. And so if you look at the past three quarters, you know, year to date through Q3, we've grown by, A little over 28 million members, which is more than we grew all of last year. So super healthy growth and the underlying both top line and bottom line growth and retention trends in our business are healthy.