Netflix Q3 2015 Revenues, Profits, and Subscribers Growth Analysis

1. Netflix Business Analysis Q3’15
Revenues and Profits
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2. Presentation Outline
2
‣ Overall Revenues And Profits Analysis
‣ Business Segment Revenues Analysis
‣ Key Business Metrics Analysis

3. Netflix Overall Revenues Analysis
3
Revenues (In $ Millions)
Q3’14 Q4’14 Q1’15 Q2’15 Q3’15
$1,738
$1,645
$1,573
$1,485
$1,409
Revenue YoY Growth
Q3’14 Q4’14 Q1’15 Q2’15 Q3’15
27.4%
26.3%
23.9%
22.7% 23.3%

4. Netflix Costs Analysis
4
Costs (In $ Millions)
Q3’14 Q4’14 Q1’15 Q2’15 Q3’15
$111
$96
$91$76
$78
$172
$155
$143$126
$121
$208
$197
$195$204
$146
$1,174
$1,122
$1,046$1,014
$954
Cost of Revenue
Research & Development Expenses
Sales & Marketing Expenses
General & Administrative Expenses
Costs As A Percentage Of Revenue
Q3’14 Q4’14 Q1’15 Q2’15 Q3’15
6.4%5.8%5.8%5.1%
5.5%
9.9%9.4%9.1%8.5%
8.6%
12.0%12.0%12.4%
13.7%
10.3%
67.5%68.2%66.5%68.3%67.7%
Cost of Revenue as a % of Total Revenue
Research & Development Expenses as a % of Total Revenue
Sales & Marketing Expenses as a % of Total Revenue
General & Administrative Expenses as a % of Total Revenue

5. Netflix Gross Income Analysis
5
Gross Income (In $ Millions)
Q3’14 Q4’14 Q1’15 Q2’15 Q3’15
$564
$523$527
$470$455
Gross Margin
Q3’14 Q4’14 Q1’15 Q2’15 Q3’15
32.5%31.8%33.5%31.7%32.3%

6. Netflix Operating Income Analysis
6
Operating Profit (Loss) (In $ Millions)
Q3’14 Q4’14 Q1’15 Q2’15 Q3’15
$74$75
$97
$65
$110
Operating Margin
Q3’14 Q4’14 Q1’15 Q2’15 Q3’15
4.2%4.6%6.2%4.4%
7.8%

7. Netflix Net Income Analysis
7
Net Profit (Loss) (In $ Millions)
Q3’14 Q4’14 Q1’15 Q2’15 Q3’15
$29
$26$24
$83
$59
Net Margin
Q3’14 Q4’14 Q1’15 Q2’15 Q3’15
1.7%1.6%1.5%
5.6%4.2%

8. Netflix Business Segment Revenues Analysis
8
Business Segments Revenues (In $ Millions)
Q3’14 Q4’14 Q1’15 Q2’15 Q3’15
$158
$164
$173
$180
$187
$517
$455
$415
$388
$346
$1,064$1,026$985
$917$877
Domestic Streaming International Streaming
Domestic DVD
Business Segments Revenue Share
Q3’14 Q4’14 Q1’15 Q2’15 Q3’15
9.1%10.0%11.0%12.1%13.2%
29.7%27.7%26.4%26.1%24.5%
61.2%62.4%62.6%61.8%62.2%
Domestic Streaming International Streaming
Domestic DVD
Business Segments YoY Revenue Growth
Q3’14 Q4’14 Q1’15 Q2’15 Q3’15
-15.9% -15.8% -15.2% -15.8% -15.6%
88.8%
75.1%
55.5%
47.9% 49.5%
25.1% 23.9% 23.3% 22.4% 21.3% Domestic Streaming
International Streaming
Domestic DVD

9. Netflix Subscribers Analysis
9
Netflix Total Subscribers (In Millions)
Q3’14 Q4’14 Q1’15 Q2’15 Q3’15
5.1
5.3
5.6
5.8
6.0
26.0
23.3
20.9
18.3
15.8
43.242.341.4
39.137.2
Domestic Streaming International Streaming
Domestic DVD
Netflix Net Subscriber Addition (In Thousands)
Q3’14 Q4’14 Q1’15 Q2’15 Q3’15
-254-250-203-219-275
2,736
2,374
2,600
2,434
2,042
881903
2,283
1,895
975
Domestic Streaming International Streaming
Domestic DVD
Netflix Total Subscribers YoY Growth
Q3’14 Q4’14 Q1’15 Q2’15 Q3’15
-16.3% -16.8% -16.4% -15.1% -15.5%
72.4%
67.2% 64.6% 68.5%
64.0%
19.7% 17.0% 16.0% 16.7% 16.0%
Domestic Streaming
International Streaming
Domestic DVD

10. Thank You
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