#1NETFLIX Q3'10 Financial Highlights | October 20, 2010#2Forward-Looking Statements and Non-GAAP Financial Measurements This presentation contains forward-looking statements relating to 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#3Q3 Results Subscribers Revenue Q3'10 Guidance 16,300k $546m GAAP Net Income $33m 16,700k $554m $40m Actual 16,933k $553.2m $38.0m NETFLIX#4Subscriber Growth (in thousands) 8,672 9,390 Netflix Subscribers 10,310 10,599 11,109 12,268 13,967 15,001 16,933 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 NETFLIX#5Net Additions (in thousands) 261 718 920 Net Subscriber Additions 289 510 1,159 1,699 1,034 1,932 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 NETFLIX#6Q3 Revenue (in millions) $294.0 3Q07 Note: Netflix implemented price reductions in July 2007 Total Revenue $341.3 3Q08 $423.1 3Q09 $553.2 3Q10 NETFLIX#7Q3 GAAP Net Income & Fully Diluted EPS (in millions) $15.6 3Q07 Net Income $20.4 3Q08 $30.1 3Q09 $38.0 3Q10 Earnings per Share $0.23 3Q07 $0.33 3Q08 $0.52 3Q09 $0.70 3Q10 NETFLIX#8Churn 4.2% 4.1% 3.9% 4.2% 4.2% 4.2% 4.2% 4.5% 4.4% 3.9% 3.8% 4.0% 3.8% 3Q07 4Q07 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 NETFLIX#9Subscriber Acquisition Cost $32.21 $26.67 $25.79 $23.88 $26.86 $25.23 $21.54 $24.37 $19.81 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 NETFLIX#10Free 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 3Q09 $78,311 $105,817 (9,994) (22,433) (46,273) 3,345 4Q09 134 $25,523 1Q10 2Q10 3Q10 3,934 $77,205 $60,252 $42,227 (6,393) (130) 3,984 (5,671) (57,048) (36,902) (24,191) (29,900) (172) 3,815 (7,342) (375) 10 (72) $30, 198 $37,592 $34,215 $7,767 3,109 48 NETFLIX#11Business Outlook Revenue Subscribers 19.0 -19.7M 19.0 19.7M GAAP Net Income 4Q10 *Fully Diluted FY'10 $32 - 40M GAAP EPS* $0.59-0.74 $586-598M $2.15-2.16B - $146-154M $2.682.83 NETFLIX#12Quarterly 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 Subscribe Watching Instantly > 15 minutes *Fully Diluted 2009 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% 1Q10 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% 3Q10 16.9 52% $553 31% $70 41% $38 26% $0.70 35% 66% NETFLIX#13Fiscal 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 19.4 58% $2,159 29% $150 29% $2.76 39% NETFLIX#14NETFLIX Q3'10 Financial Highlights | October 20, 2010