NetFlix Inc 2026 Q3 Earnings Call

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 will 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 will take that and thank you, David, for the question. It gives us an opportunity to clarify, obviously. Our strategy is unchanged and it has 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 would ever cancel. The anchor of that strategy are the Netflix originals. Differentiated, exclusive, ambitious, professionally produced series and films and live events. We have oriented the market to expect something great and new to watch every week, so we have to deliver on quality and quantity always.

As for the live events, in a world of so much choice, we have titles like KPop Demon Hunters and Wednesday and Bridgerton, and with all those things to choose from, live events like the Canelo-Crawford fight or the event-type sports that we do with the NFL and the MLB, these events break through. 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. We take all of that strategy, we pair that exclusive programming with a broad offering of third-party programming, including second-run titles, deals we just did with Sony, Disney, Universal, and others.

In addition to that, we look to new ways to bring third-party content onto the service as well to complement those originals, like we just did with TF1 in France, where you are ingesting a full network of programming. All that said, it is 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. 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?

I will pick up this one, and start with just overall engagement, which we think of as the sum total of actual value that we are delivering to members. This is quality, quantity, and variety of viewing. That remains healthy, and it drives our business model. The best evidence that we have that we are delivering that value is churn. We have healthy retention in every region. Q3 churn, both globally and in the United States, improved year-on-year. It is better than forecast. It is already industry leading. The ultimate determinant of are we delivering that value is the reaction to price changes. Those recent price changes that we did, including in the United States, have gone well. We have seen results that are consistent with past changes and our expectations. Consistent with all that performance, we do plan on delivering our full year guidance.

Now, you talked about specific engagement trends by geography, and as you saw from the letter, we had great results in APAC, LATAM, and EMEA. Our local titles from those regions are driving engagement and they are driving business growth. You can see how our business model works here. We specifically highlighted India, which had a strong slate with a couple titles really, really performing. As a result, view hours in Q3 in India grew 24% on an absolute basis. They were also up on a per member basis, all of which drives membership. It drove membership and nearly 20% year-over-year revenue growth. That is a great example of how the core model works. We deliver on member value, and we get the business outcomes that we are looking for.

Turning to the U.S., the other region, our engagement is solid, and it will allow us to continue to grow as we have for the last several years. We know that we can do better, and that better is our upside. It is our goal to go from very good to great on the performance of that slate. I just want to note that we are quite excited about what we have coming. Coming from the U.S. in Q4, on series side, we are already off to a great start with limited series East of Eden. My whole social group is talking about that. We have Season 4 of The Diplomat, the best season yet of this show.

100%. Later this quarter, we've got The Body, we've got The Murder of JonBenét Ramsey, we've got the final season of Emily in Paris.

On the film side, we've got The Further Misadventures of Cliff Booth with Brad Pitt, directed by David Fincher, written by Quentin Tarantino. You can't ask for a more star-studded lineup than that. We've got Bad Day with Cameron Diaz, and then we've got Steps, which is our new animated film featuring Ali Wong, Stephanie Hsu, and Amanda Seyfried. In addition to all that, we've got our Christmas Day NFL games, and we'll now have the first Thanksgiving Eve game, which we are going to spice up with U2 as the halftime show. U2 is just legendary, one of my favorites.

Moving to 2027, our slate includes Narnia, we've got Charlie and the Chocolate Factory, Here Comes the Flood, Runups 3, fifth season of Bridgerton, third season of Wednesday, Michael Fassbender starring in a new series about the Kennedys, God of the Woods, Rabbit, just to name a few. We're going to have NFL games, one NFL game in the final week of the regular season. This is the first time we're doing that. Of course, the Women's World Cup in the U.S. and Canada. So there is just a lot to look forward to.

Thanks, Greg. That was an impressive overview of the slate in Q4.

Yes. 2027. I think you made.

Reminded me of someone. Dan.