Netflix, Inc.

Welcome to the Netflix Q2 2024 earnings interview. I'm Spencer Wong, VP of Finance, IR, and Corporate Development. Joining me today are co-CEOs Ted Sarandos and Greg Peters and CFO Spence Newman. As a reminder, we'll be making forward-looking statements and actual results may vary. We'll now take questions from the sell-side community that have been submitted and we'll begin with a set of questions on our Q2 results and our forecast. So the first question on our results come from Doug Anmuth of JP Morgan. So Spence, Doug asks, can you provide some color on how churn is trending and perhaps share some color on what drove revenue growth in the quarter?

Yeah, sure. Thanks, Doug. And thanks, Spencer. We're pleased with our performance in Q2. There was strong performance across the board, good momentum across the business, strong revenue growth, member growth, and profit growth. In terms of that member growth, in turn, I'd say that the kind of outsized paid net ads in the quarter was primarily driven by a stronger acquisition, a little stronger than we expected, but also very healthy, continued healthy retention in the quarter. and that's across all regions. In terms of growth generally, there's probably kind of three key factors that drove member growth. First, strong performance of our content slate, the wide variety of titles that delivered across genres and regions, and I'm sure we'll talk more about that. There was some positive impact from paid sharing that continues. As we've said on recent calls, it's tougher and tougher to tease that out. We're clearly seeing healthy organic growth in the business, but we're also continuing to get better and better at translating improvements in our service into business value, including getting better and better at converting unpaid accounts. And at least on the paid member front, we're also probably benefiting from that attractive entry point in terms of price point and feature set for our ads plan. So you put all that together and it was a nice quarter for subscriber growth, but even more importantly, a nice quarter in terms of driving healthy revenue growth and healthy profit growth. So 17% reported revenue growth and margins that were up five percentage points year over year.

Thanks, Spence. Doug also has a follow-up question on the results. Netflix noted that India was our number two and number three country in terms of paid net ads and percent revenue growth in the second quarter. Do you feel like you're hitting more of an inflection point in that market, or is that more about a very specific successful content slate in Q2?