A：For 2026, Netflix expects organic revenue growth of 12% to 14%, with an operating margin at 31.5%. They anticipate roughly doubling the advertising business to about $3 billion. The company ended the previous year with more than 325 million paid members and projects addressing the remaining 75% of the addressable market could potentially add 275 million more members.

A：Netflix believes they are under 45% penetrated in terms of addressable households, which currently stands at about 800 million potential members. They estimate that they currently account for only 5% of global TV view share.

A：Netflix's three main priorities for the coming year include delivering more entertainment value to members by strengthening their core offering of series and films, as well as pushing into new categories like live sports events and kids gaming apps; leveraging technology to improve service delivery, content discovery, and production; and enhancing monetization through broad distribution, sophisticated pricing plans, and continuing their robust ad business.

A：The initial forecast for the year included $275 million of costs for M&A-related activities, but due to the acquisition of Warner Brothers not materializing as planned, the costs were not fully realized. However, some costs that were expected to carry into 2026 were pulled forward, resulting in an impact on operating margin. Despite this, Netflix remains within the projected range for M&A-related expenses and there is no material impact on the operating margin outlook.

A：The key learnings from the Warner Brothers experience include confidence in the core business, the importance of focus, successful execution of a large deal, early integration, and the strength of teams involved. Netflix also learned about investment discipline, having the courage to walk away from deals that no longer provide value, and the growth of their M&A muscle. The company's capital allocation philosophy remains unchanged, and M&A will continue to be a disciplined tool for achieving their goals.

A：The primary quality metric for engagement achieved an all-time high in 2025 and, as of Q1 in 2026, it has maintained a positive performance with hours up at a similar rate of growth to what was seen in the second half of 2025, aided by the Winter Olympics.

A：While specific data points are not detailed, member quality is considered an important part of the engagement measurement and it includes several associated signals. One primary member quality metric has recently hit another all-time high.

A：Improving the member quality metric is deemed to improve the business, as it is closely related to important primary metrics like retention.

A：Netflix is investing in understanding the different kinds of value that new programming, such as live content, provides. It acknowledges the need to learn how new programming affects member engagement, build models for that programming, and determine how it supports the business.

A：Nielsen's methodology change, which reduces the weight of streaming-only households and increases the weight of linear TV households, is not expected to impact Netflix's advertising revenue as the Nielsen Cross-Platform Metric (CA) is not the currency for the video marketplace. Consumer behavior and the amount of viewing have not changed due to this shift, and Netflix continues to expect to deliver $3 billion in advertising revenue for the year.

A：The World Baseball Classic was a significant event for Netflix, being the most watched program in Japan and the biggest global baseball streaming event of all time, with 31.4 million viewers. It drove the largest single sign-up in Japan, led Q1 member growth worldwide, and had the highest quarter of paid net adds in Japan's history.

A：The World Baseball Classic drove the largest single sign-up in Japan, led the Q1 member growth worldwide, and resulted in Japan's highest quarter of paid net adds in history. It also showcased Netflix's capability to stream multiple games concurrently, marking a successful regional live event for the company outside the U.S.

A：The APAC region was Netflix's strongest market in terms of FX-neutral revenue growth for the quarter. It had strong performance across several areas, with standout results in India, Korea, and Southeast Asia. The quarter was highlighted by increased viewing of recent original series and content, with some shows re-entering the top 10, supported by the halo effect of the World Baseball Classic.

A：While specific strategies are not disclosed, Netflix's sports strategy has remained pretty much unchanged. Robert Fishman's question suggests a desire to understand if Netflix assesses the return on investment for live events (like NFL games) the same way as scripted content. The transcript indicates that Netflix is likely to evaluate the performance and value of live events in a similar manner to scripted content, although specific strategies or impacts on CPMs and ad growth are not explicitly discussed.

A：The sports component is an important part of the live business strategy and has had several successes, including events with the New York Yankees and the San Francisco Giants, a Christmas Day NFL game, and significant fights. The NFL is considered a valuable property that contributes to the overall live strategy and is currently being discussed for potential expansion.

A：The impact of the new podcasting strategy is positive, with data indicating incremental mental engagement to the platform. This is evidenced by increased daytime viewing and the mobility of podcast consumption compared to traditional TV and film. The strategy has also led to the creation of a diverse range of podcasts, both licensed and owned, that are performing well and attracting a growing audience.

A：The advertising business for Netflix has seen significant growth, with the number of advertisers increasing over 70% year to year to more than 4000, attributed to the ease of buying on the service, the addition of more demand-side platforms (DSPs), improving market capabilities, and more salesforce capacity. The company is focusing on larger advertising accounts and expects continued growth in the number of advertisers, with an increasing proportion buying programmatically.

A：Netflix raised subscription prices as part of a planned strategy, prompted by continuous monitoring of member signals such as quality-weighted engagement, plan selection, and retention. These indicators showed improvements in value delivered to members well before any price adjustment, with the recent change being in line with historical performance and expectations.

A：The early impact of the price increase on customer acquisition and churn is in line with expectations and consistent with historical observations in the United States. While the rollout of the change is still ongoing, initial data suggests that the impact is consistent with past price changes, indicating that member retention remains strong.

A：The key learnings from the past five years of gaming strategy include the understanding that platform games can significantly impact user consumption habits, the identification of market opportunities, especially in China ex Russia, and the recognition that addressing issues such as new player acquisition and low friction game discovery and play can be effectively improved. The company has also learned that gameplay can positively impact member retention and drive acquisition.

A：Platform games have been instrumental in changing user consumption habits by providing high-quality experiences that not only extend engagement but also reinforce both the interactive and non-interactive media sides. The most interesting areas to invest in include extending beloved IP or events into interactive experiences and focusing on games that are played on TV, providing a new canvas for players and developers, and dedicated experiences for kids.

A：Netflix is still in the early stages of its gaming strategy, having built foundational infrastructure and core capabilities. The company is now able to deliver more experiences aligned with its vision, which includes significant potential for growth. Future expectations involve ramping up investment in gaming, which is currently small relative to content spend, based on demonstrated performance and growing returns.

A：Netflix will measure success with its gaming strategy, particularly with the Netflix Playard announcement, by assessing engagement growth with new and existing titles, as well as ensuring that the experience aligns with the core philosophy of providing kid-friendly worlds through games and interaction. The company is excited about the positive signals received, such as strong growth in engagement with added kids games.

A：Netflix plans to differentiate its gaming offerings for children by providing a separate app, Netflix Playard, which includes a growing collection of age-appropriate games based on beloved shows. The app is designed without ads or in-app purchases, fitting all content to a child's natural viewing habits on mobile and tablets, and is included in the membership. This approach extends Netflix's core philosophy of special care for kids into the gaming realm.

A：The competitive landscape for Netflix in content acquisition remains intense, with great projects being highly competitive. However, Netflix continues to grow by offering immense value to members and successfully acquiring competitive projects, such as 'Strangers with Gwyne Petro' and 'Rabbit Rabbit'. The company emphasizes relationships and providing a great experience for creators and audiences. This strategy has led to repeat business, indicating a successful approach to content acquisition.

A：The highlights include the start of season 2 of 'Beef', created by Sonny Lee and featuring Oscar Isaac, which won 5 individual awards and is a massive hit worldwide. Netflix has an overall deal with Sonny Lee to create content for years. Oscar Isaac has another film and project in the works with Netflix. Carrie Mulligan, who has multiple projects for Netflix including an Oscar-nominated performance, is in 'The Erna' and 'Mudbound'. Charles Melton, Golden Globe-nominated for 'May December', is in the new season of 'Beef'.

A：Netflix views its relationship with content creators as mutually beneficial, with a focus on creating a Netflix family where the cast and crew feel like a part of the company. They manage their dual role by recognizing that they are both a customer and a competitor in the industry. They manage these relationships well and invest in various aspects of the movie ecosystem around the world.

A：Netflix plans to leverage AI to improve content and creative processes, believing it will enhance tools and processes. The acquisition of Inceptionist is seen as an acceleration of Netflix's generative AI capabilities due to its proprietary technology tailored for filmmaking. This technology is different from other AI video applications and is creating interest among creators, leading to real momentum for adoption.

A：Netflix's decisions regarding technology investment are informed by the uniqueness and scale of data, potential for product and business process innovation, and areas where they can leverage AI to deliver value. AI benefits content production by providing tools for various stages of production, including pre-visualization, visual effects, and on-set safety. For member experience, AI enhances personalization and recommendation systems, improving engagement with the service. Additionally, AI aids in the design of new creative formats and improves contextual relevance in the Netflix ad suite.

A：Reed Hastings decided not to stand for reelection due to his philosophy of succession planning and the belief that the company should be around long after him. He had previously announced that he would stay with the company for about another decade, and now, six years later, he is following through with this plan. Hastings will remain as chairman and a member of the board through his current term, and the board will take the next steps in shaping the board in the months to come.

A：According to the speaker, drawing from Max Pree's quote, the core components of leadership include defining reality, becoming a servant and debtor to the team, and finally saying thank you. Reed Hastings is seen as the ultimate artful leader who embodies these components.

A：Reed Hastings has established the standard for leadership and culture at Netflix, shaping the company's vision, willingness to take risks, embracing change, motivating innovation, and commitment to values. His efforts have not only built Netflix but also advanced the industry, expanded possibilities for storytellers and audiences worldwide, and made it possible to bring stories from around the world to audiences.

A：Reed has influenced the speaker and others at Netflix by pushing them to think bigger, be more honest, own their decisions, and supporting them with passion even when he disagreed personally. His interaction style has shaped many at Netflix, encouraging them to celebrate successes and learn from each other's perspectives.

A：The speaker learned the importance of transitioning leadership in a selfless, disciplined, and graceful manner from Reed. This lesson emphasizes that building something meaningful is as important as planning and carrying out a smooth transition to the next generation or team.

A：The speaker thanks Reed Hastings for the trust placed in them and for serving as an example of exemplary leadership. They express an aspiration to transition their role with the same selflessness and grace that Reed has demonstrated. The speaker concludes by echoing gratitude to Reed, summarizing the sentiment with the memorable gesture of Reed's role in the Netflix logo.