Exhibit 99.1
July 16, 2018

Fellow shareholders,

We had a strong but not stellar Q2, ending with 130 million memberships. Membership growth was 5.2m, the same as Q2 last year, but lower than our 6.2m forecast. Earnings, margins, and revenue were all in-line with forecast and way up from prior year. Internet video is growing globally and we are fortunate to be one of the leaders. In addition to succeeding commercially, we are starting to lead artistically in some categories, with our creators earning enough Emmy nominations this year to collectively break HBO’s amazing 17-year run.1 
 (in millions except per share data and Streaming Content Obligations)
Q2'17
Q3'17
Q4'17
Q1'18
Q2'18
Q3'18 Forecast
Total (Including DVD):
 
 
 
 
 
 
Revenue
$
2,785

$
2,985

$
3,286

$
3,701

$
3,907

$
3,988

Y/Y % Growth
32.3
 %
30.3
%
32.6
%
40.4
%
40.3
%
33.6
%
Operating Income
$
128

$
209

$
245

$
447

$
462

$
420

Operating Margin
4.6
 %
7.0
%
7.5
%
12.1
%
11.8
%
10.5
%
Net Income
$
66

$
130

$
186

$
290

$
384

$
307

Diluted EPS
$
0.15

$
0.29

$
0.41

$
0.64

$
0.85

$
0.68

 
 
 
 
 
 
 
Total Streaming:
 
 
 
 
 
 
Revenue
$
2,671

$
2,875

$
3,181

$
3,602

$
3,814

$
3,900

Y/Y % Growth
35.8
 %
33.2
%
35.3
%
43.2
%
42.8
%
35.7
%
Paid Memberships
99.04

104.02

110.64

118.90

124.35

129.50

Paid Net Additions
4.67

4.99

6.62

8.26

5.45

5.15

Total Memberships
103.95

109.25

117.58

125.00

130.14

135.14

Net Additions
5.20

5.30

8.33

7.41

5.15

5.00

 
 
 
 
 
 
 
US Streaming:
 
 
 
 
 
 
Revenue
$
1,505

$
1,547

$
1,630

$
1,820

$
1,893

$
1,930

Contribution Profit
$
560

$
554

$
561

$
697

$
740

$
730

Contribution Margin
37.2
 %
35.8
%
34.4
%
38.3
%
39.1
%
37.8
%
Paid Memberships
50.32

51.35

52.81

55.09

55.96

56.66

Paid Net Additions
0.95

1.02

1.47

2.28

0.87

0.70

Total Memberships
51.92

52.77

54.75

56.71

57.38

58.03

Net Additions
1.07

0.85

1.98

1.96

0.67

0.65

 
 
 
 
 
 
 
International Streaming:
 
 
 
 
 
 
Revenue
$
1,165

$
1,327

$
1,550

$
1,782

$
1,921

$
1,970

Contribution Profit (Loss)
$
(13
)
$
62

$
135

$
272

$
298

$
290

Contribution Margin
(1.1
)%
4.7
%
8.7
%
15.3
%
15.5
%
14.7
%
Paid Memberships
48.71

52.68

57.83

63.82

68.39

72.85

Paid Net Additions
3.73

3.97

5.16

5.98

4.58

4.45

Total Memberships
52.03

56.48

62.83

68.29

72.76

77.11

Net Additions
4.14

4.45

6.36

5.46

4.47

4.35

 
 
 
 
 
 
 
Consolidated:
 
 
 
 
 
 
Net cash (used in) operating activities
$
(535
)
$
(420
)
$
(488
)
$
(237
)
$
(518
)
 
Free Cash Flow
$
(608
)
$
(465
)
$
(524
)
$
(287
)
$
(559
)
 
EBITDA
$
190

$
273

$
313

$
534

$
563

 
Shares (FD)
446.3

447.4

448.1

450.4

451.6

 
Streaming Content Obligations* ($B)
15.7

17.0

17.7

17.9

18.4

 
*Corresponds to our total known streaming content obligations as defined in our financial statements and related notes in our most recently filed SEC Form 10-K
1 http://www.vulture.com/2018/07/emmys-2018-nominations-netflix-hbo.html

nflxlogo2015a15.jpg
1

The following information was filed by Netflix Inc (NFLX) on Monday, July 16, 2018 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-Q Quarterly Report statement of earnings and operation as management may choose to highlight particular information in the press release.

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