Highlights From Netflix’s Conference Call
Netflix’s (NASDAQ: NFLX) soared higher by nearly 20 percent on Tuesday as investors embraced the headline numbers, including a better-than-expected top-and-bottom-line beat and subscriber additions.
Following the company’s earnings report, management hosts a conference call that is unique and different. Rather than discuss its results and field questions from a plethora of analysts, the company invited Scott Devitt from Stifel and Ben Swinburne from Morgan Stanley to pose a series of questions.
Netflix’s management team hosting the call consisted of its CEO Reed Hastings, its CFO David Wells and Chief Content Officer Ted Sarandos.
Here are some of the notable quotes from Netflix’s management team, courtesy of Seeking Alpha’s transcript.
Hastings on catching up to peers: “We mentioned [in] the [investment letter to shareholders] that we’ve only just now localized Poland and Turkey. That brings us up to 22 languages. YouTube is at 50. So we’ve got a long way to go in that localization effort.”
Hastings on Netflix’s guidance: “I think the main thing about one year guidance is we probably don’t have any more insights than investors do, whereas in the current quarter when we’re two or three weeks into it we do have a little bit of an advantage, so that’s why we do the current quarter guidance.”
Wells on why the U.S. market is different than the international market: “The U.S. is a much older market in terms of our ability to improve that product and have more time. We’ve kind of settled into a rate of churn that’s lower than some of our international markets. They get there over time, but I would say and this in terms of that conversation, we think that there’s room left to improve the U.S. as we is that sort of un-grandfathering effect fades out over time. But outside the U.S. we will definitely have more opportunity to improve churn turnover time as we improved these products outside the U.S.”
Sarandos on the competitive landscape: “This kind of frenemy model has existed for decades in television where competing studios produce for one another constantly. And it’s really the question I think that our suppliers want to make when they’re making decisions around their expansion over the top is, can they make better returns selling to Netflix or building their own thing? And that’s both a long-term and a short-term question and currently hypothetical.”