#1NETFLIX Q2'10 Financial Highlights | July 21, 2010#2Forward-Looking Statements and Non-GAAP Financial Measurements This presentation contains forward-looking statements relating future events or future financial performance that involve risks and uncertainties. Actual results may differ materially from those anticipated in these statements based on a number of factors, including those identified in the company's annual report on Form 10-K filed with the SEC on February 22, 2010. This presentation also contains references to non-GAAP financial measures. A presentation of and reconciliation to the most directly comparable GAAP financial measure, where such can be done without unreasonable effort, can be found on our Web site at http://ir.netflix.com. NETFLIX#3Netflix Goals > Be a great Internet movie and TV show service by combining Internet streaming with DVD by mail > Materially grow subscribers and EPS every year NETFLIX#4Q2 Results Subscribers Revenue Q2'10 Guidance 14,700k $517m GAAP Net Income $34m 15,000k $525m $40m Actual 15,001k $519.8m $43.5m NETFLIX#5Subscriber Growth (in thousands) 8,411 8,672 Netflix Subscribers 9,390 10,310 10,599 11,109 12,268 13,967 15,001 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 NETFLIX#6Net Additions (in thousands) 168 261 718 Net Subscriber Additions 920 289 510 1,159 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1,699 1,034 4Q09 1Q10 1Q10 2Q10 NETFLIX#7Q2 Revenue (in millions) $303.7 2Q07 Note: Netflix implemented price reductions in July 2007 Total Revenue $337.6 2Q08 $408.5 2Q09 $519.8 2Q10 NETFLIX#8Q2 GAAP Net Income & Fully Diluted EPS (in millions) $25.5 2Q07 Net Income $26.6 2Q08 $32.4 2Q09 $43.5 2Q10 Earnings per Share $0.36 2Q07 $0.42 2Q08 $0.54 2009 $0.80 2Q10 NETFLIX#9Churn 4.6% 4.2% 4.1% 3.9% 4.2% 4.2% 4.2% 4.2% 4.5% 4.4% 3.9% 3.8% 4.0% 2Q07 3Q07 4007 1Q08 2008 3008 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 NETFLIX#10Subscriber Acquisition Cost $28.89 $32.21 $26.67 $25.79 $23.88 $26.86 $25.23 $21.54 $24.37 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 NETFLIX#11Free Cash Flow (in thousands) Non-GAAP Free Cash Flow Reconciliation: Net cash provided by operating activities Purchases of property and equipment Acquisition of intangible asset Acquisitions of DVD content library Proceeds from sale of DVDs Other assets Non-GAAP Free Cash Flow 2Q09 (6,933) (43,224) $75,302 $78,311 $105,817 $77,205 1,159 11 3Q09 $26,315 (9,994) (46,273) 3,345 134 4Q09 $25,523 1Q10 2Q10 (22,433) (6,393) 3,934 (72) (130) (57,048) (36,902) (24,191) 3,984 (172) $60,252 $30,198 $37,592 (5,671) 3,815 10 $34,215 NETFLIX#12Business Outlook Subscribers 16.3 -16.7M Revenue GAAP Net Income 3Q10 *Fully Diluted $33-40M GAAP EPS* $0.61 -0.74 4Q10 17.7 18.5M $546-554M $580-596M - $32 - 40M $0.58 0.73 FY '10 17.7-18.5M $2.14 -2.16B $141 - 156M $2.582.86 NETFLIX#13Quarterly Summary Financials Subscribers (M) Y/Y Change Revenue (M) Y/Y Change Operating Profit (M) Y/Y Change Net Income (M) Y/Y Change EPS* Y/Y Change % of Subscribers Watching Instantly > 15 minutes *Fully Diluted 1Q09 10.3 25% $394 21% $36 138% $22 68% $0.37 76% 36% 2Q09 10.6 26% $409 21% $53 54% $32 22% $0.54 29% 37% 3Q09 11.1 28% $423 24% $49 45% $30 48% $0.52 58% 41% 4Q09 12.3 31% $445 24% $53 41% $31 36% $0.56 47% 48% 1010 14.0 35% $494 25% $58 60% $32 44% $0.59 59% 55% 2Q10 15.0 42% $520 27% $77 47% $44 34% $0.80 48% 61% NETFLIX#14Fiscal Year Summary Financials Subscribers (M) Y/Y Change Revenue (M) Y/Y Change Operating Profit (M) Y/Y Change Net Income (M) Y/Y Change EPS* Y/Y Change % of Subscribers Watching Instantly > 15 minutes *Fully Diluted 2005 4.2 60% $682 36% $3 -86% $42 96% $0.64 94% ΝΑ 2006 6.3 51% $997 46% $65 2387% $49 17% $0.71 11% ΝΑ 2007 7.5 18% $1,205 21% $92 41% $67 36% $0.97 37% ΝΑ 2008 9.4 26% $1,365 13% $122 32% $83 25% $1.32 36% 28% 2009 12.3 31% $1,670 22% $192 58% $116 40% $1.98 50% 48% Mid-point of Guidance 2010 18.1 47% $2,150 29% $149 28% $2.72 37% NETFLIX#15NETFLIX Q2'10 Financial Highlights | July 21, 2010