Netflix, Inc.

Good afternoon and welcome to the Netflix Q2 2021 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 Nidhi Gupta from Fidelity. As a reminder, we'll be making forward-looking statements and actual results may vary. Let's turn it over to Nidhi now for her first question.

Thank you, Spencer. Great to be with you all again this quarter. Lots of exciting stuff to talk about, so let's dive in. Just starting with the quarter, nice to see net ads coming in a little bit better than your expectations. Help us understand what contributed to that.

Sure, Nidhi. I can take that and others can jump in. But as you saw, the quarter kind of played out pretty much as expected. So we delivered 1.5 million paid net ads relative to a guide of a million. And what we're seeing is what we've sort of been talking about for the last couple quarters and that there's still a bit of choppiness to our growth. We had the kind of big pull forward in 2020 of subscriber ads. We also had the push in production of some of our kind of key returning titles and big tentpole new releases until the latter part of the year. But overall, the business is performing well. Our churn is actually down relative to the more comparable two year ago period in 2019, Q2 of 19 before COVID. Our viewing, and we've talked about in the letter, our engagement is up. nearly 20% over that period. But we still feel a little bit of that drag in terms of our acquisition growth as we're kind of working through. What we hope is, and we can't be sure, but what we hope is the tail end of this COVID choppiness where we see on the acquisition side as markets reopen, it does slow things down a little bit.