Netflix, Inc.

Good afternoon and welcome to the Netflix Q3 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. Nidhi, you now have the green light to ask your first question.

Thank you, Spencer. Great to be with you all again. I want to say congratulations on all your success in the quarter. 44 Emmy wins, the amazing viewership of Squid Game. My children will never play Red Light, Green Light again. And your acquisition of Night School Studio and the announced acquisition of the Roald Dahl Story Company. So we have a lot to talk about this quarter. But first, I want to start with subs. which came in better than expected. So just help us kind of dissect the outperformance there.

Sure. I can take that one, Nidhi. Well, so great to see you. And thanks for the kind words in the opening. In terms of what we saw this quarter for Q3, I guess it really boils down to what we saw is sort of what we expected. We talked about in the last call that we hope that we were getting towards that kind of tail end of the COVID choppiness of the pull forward of sub growth into 2020 and those production delays that we're working through as well. And that's kind of what we're seeing. So throughout the quarter, the business remained healthy as it had been throughout the year with churn at low levels down prior to the comparable periods, both in 2020 and two years ago, pre-COVID in 2019. So retention was very healthy and viewing was up. Viewing, remember, maybe slightly down compared to the very COVID distorted 2020 Q3, but up. healthy compared to 2019 comparable period. And then what we saw as the quarter continued into September, we saw acceleration in our growth, which is what we had been hoping for and expecting, but it was good to see as we got into the strength of our schedule. We had a couple big hits. As you know, you mentioned one with Squid Game, La Costa de Papel, the first part of Season 5, but a lot of variety and quality programming throughout the quarter with things like Never Have I Ever and He's All That. Chestnut Man and Copenhagen at the end of the quarter. So just that's basically the way it played out is as we got into the strength of the schedule on top of already kind of healthy business fundamentals, we saw a bit of an uptick in growth.