Netflix, Inc.

Hello, and welcome to the Netflix Q4 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, COO and Chief Product Officer Greg Peters, and CFO Spence Newman. Our interviewer this quarter is Kanaan Ben-Kateshwar from Barclays. As a reminder, we'll be making forward-looking statements, and actual results may vary. With that, let me turn it over to Kanaan for the first question.

Thank you, Spencer. And good afternoon, everyone. So maybe, Spence, we could start off with you. Just given the guidance and the beat during the quarter relative to guidance, sequentially, the first quarter tends to be higher in net additions than Q4. But your guidance is lower despite the fact that you beat Q4 by a relatively large amount. And it feels like the pull-forward effect is more or less behind us. So if you could just help us walk through the thought behind the guidance and the framework that you use for that, that would be a good place to start.

Yeah, sure, Kanam. Well, great to see you. Happy New Year, obviously, delayed. So in terms of the guide, first off, we guided to 6 million paid net ads for Q1, if you saw. And obviously, that's still a big number, especially when you think about it in context of 2020, which was by far a record year with 37 million paid net ads. So I know you mentioned the pull forward. I don't think we're declaring that we're necessarily through that yet. So I think there's puts and calls every quarter. But 1, that's still a meaningful factor for us in the guide is thinking through how we kind of grow through that growth from 2020. So there's probably still a little bit of that forward dynamic in the early parts of 2021. And then, you know, more broadly, it's, um, it's just so difficult in this time. I mean, this is 1 of the more uniquely challenging times, not just for life, but. That's most important, but also obviously in terms of trying to just forecast the growth trajectory of the business. There's just so much uncertainty right now. So it's more uncertain than we've ever seen. And we're trying to forecast through that. But at the same time, one thing that's maybe counterbalancing that is that what COVID has done for us is it's accelerated that big shift from linear to streaming entertainment. So the long-term growth trajectory is at least as strong as ever. There's just more short term noise and uncertainty right now, but still very strong underlying growth metrics. And that's what you're seeing in the Q1 guide.