Netflix, Inc.

Good afternoon and welcome to the Netflix Q3 2026 earnings interview. I'm Spencer Wang, VP of Finance and Capital Markets. Joining me today are co-CEOs Ted Sarandos and Greg Peters and CFO Spence Neumann. As a reminder, we will be taking forward-looking statements and actual results may vary. We'll now take questions submitted by the analyst community. Our first question comes from David Joyce of Seaport Research Partners. His question is, investors are looking for more clarity in what has typically been Netflix's industry-leading strategy. What role do live events or becoming a centralized streaming portal or offering short-form video, third-party or user-generated content play in how you see Netflix regaining a competitive edge that can help sentiment?

I'll take that. And thank you, David, for the question. It gives us the opportunity to clarify, obviously. But our strategy is unchanged. And it's always been and it continues to be to combine best-in-class entertainment with industry-leading discovery, global distribution, and the best possible monetization. We want to be the must-have entertainment service. The first one members check for a great series or a great film and the last service they'd ever cancel. Now, the anchor of that strategy are the Netflix originals. Differentiated, exclusive, ambitious, professionally produced series and films and live events. Now we've already ended the market to expect something great and new to watch every week. So we have to deliver on quality and quantity always. And as for the live events, in a world of so much choice, you know, we have titles like K-pop and Wednesday and Bridgerton. And with all those things to choose from, live events like the Canelo Crawford fight or the eventized sports that we do with the NFL and the MLB, these events break through. You know, and they stand out, they drive new membership, they add fuel to our ad revenues, they please our existing members, and they just generally enhance the value of Netflix. So we take all of that strategy. We pair that exclusive programming with kind of a broad offering of third-party programming, including second-run titles, deals we just did with Sony, Disney, Universal, and others. And in addition to that, we look to new ways to bring third-party content onto the service as well to compliment those originals, like we just did with TF1 in France, where you're ingesting a full network of programming. Now, all that said, it's really important to remember roughly 95% of our spend and nearly all of our revenue is focused on that core where we see a long runway for future growth. Now, other areas that you mentioned, these are early stage initiatives meant to explore future programming expansions. And we keep our focus and our investment in those areas very tight because the core is the critical growth engine.

Great. Thank you, Ted. Our next question comes from Eric Sheridan of Goldman Sachs. How would you characterize recent engagement trends in the U.S. relative to other geographies? How would you frame any variables such as content, seasonality, competition that might be driving any such divergences in engagement by region?