Netflix (NFLX) Q4 2024 Earnings Call Transcript

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Netflix (NFLX 1.35%)
Q4 2024 Earnings Call
Jan 21, 2025, 4:45 p.m. ET

Contents:

• Prepared Remarks
• Questions and Answers
• Call Participants

Prepared Remarks:

Spencer Wang — Vice President, Finance, Investor Relations, and Corporate Development

Good afternoon, and welcome to the Netflix Q4 2024 earnings interview. I’m Spencer Wang, vice president of finance, IR, and corporate development. Joining me today are co-CEOs, Ted Sarandos and Greg Peters; and CFO, Spence Neumann. As a reminder, we will be making forward-looking statements, and actual results may vary.

We will now take questions submitted by the analyst community, and we will begin with our first question from Dan Salmon of New Street Research. Dan asks, “Given the need to ensure safety and well-being of cast and crews, has there been any disruption to your L.A. based productions owing to the wildfires? If so, can you please quantify the impact on this year’s cash content spending?

Theodore A. Sarandos — Co-Chief Executive Officer

Thanks a lot, and thanks, Dan. Let me start by saying this is a really difficult time for a lot of people in Southern California. So, many people in our industry, including our employees, were deeply impacted by these fires. And the hardest-hit areas of these fires, the areas around Pacific Palisades, Altadena, Malibu, are very heavily populated with the folks above and below the line who we work with every single day.

So, we’re doing everything we can to help with relief, and we’re getting those folks who can back to work. To your question directly, no meaningful delays in the delivery of the projects and no meaningful impact to the cash in 2025, but very meaningful disruption in people’s lives. So, our goal is to keep everything on schedule safely, be mindful of folks who need time to work through the challenges of the fires, including, in some cases, loss of life and home. But this industry has been through a really tough couple of years, starting with COVID, going into the strikes, and now this.

So, it’s really important that we try not to delay anything and try to make sure that these jobs stay safe. But I definitely want to add that we are extremely grateful to the firefighters and first responders who are still fighting flames right now. These are the real heroes here. But, Dan, to your direct question, no impact in 2025 on cash or deliverable, nothing meaningful.

Spencer Wang — Vice President, Finance, Investor Relations, and Corporate Development

Thanks, Ted. We’ll take our next question from Jason Helfstein of Oppenheimer. Is it fair to assume that most of the upside in the 19 million subscriber additions came from the “Jake Paul” and the Christmas Day football games? And how was the attrition or retention, I guess, post the Christmas Day games versus normal post-holiday levels?

Gregory K. Peters — Co-Chief Executive Officer

Yeah, short answer to that question is no. At a high level, we’ve seen broad strength across content categories, across all regions. We’ve seen it throughout the entire year. And as we’ve consistently seen across our history, no single title really drives a majority of our acquisition or engagement.

So, even in an amazing quarter where we had three huge live events, we had an incredible fight, two NFL games; we had one of our biggest TV series ever in “Squid Game” season 2; all very successful events and titles that we are thrilled about, our estimates for subscriber ads driven by those titles combined represent a small minority of our total member acquisition in the quarter. So, it’s really the whole service that’s working that delivered the upside that we saw this quarter. The vast majority of our net ads were driven by a broad slate and our portfolio globally. And, Ted, maybe you want to pick it up for the last half of that?

Theodore A. Sarandos — Co-Chief Executive Officer

Yeah, just putting some color around that, you know, we really have built the business on variety and quality across countries, across regions, across genres. And we really focused that year-round of having a very strong slate of programming for our members. So, we’re thrilled that some folks came in for the fight and some folks came in for the games, but they stuck around for “Squid Game” and for “Carry-On” and for “Black Doves” and for “The Six Triple Eight” and “Senna” and Nate Bargatze’s new comedy special. All those things all performed really well in the quarter and continue to in the days and weeks after the fight and after the games.

And what’s really been most encouraging is that the retention behavior of those folks who did come in for those events look a lot like the folks who come in for all of our other big titles. And so, I just would add that it’s great that all these big swings worked very well in the quarter. But to be able to have that translate into revenue growth meaningfully, everything has to be working. The product, the pricing teams, the marketing, the advertising, all those things have got to be working well.

And we saw really strong execution across the board throughout the quarter and throughout the year.