#1NETFLIX Q1'10 Financial Highlights | April 21, 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#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#4Q1 Results Subscribers Revenue Q1'10 Guidance 13,500k $490m GAAP Net Income $26m 13,800k $496m $32m Actual 13,967k $493.7m $32.3m NETFLIX#5Subscriber Growth (in thousands) 8,243 Netflix Subscribers 8,411 8,672 9,390 10,310 10,599 11,109 12,268 13,967 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 NETFLIX#6Record Net Additions (in thousands) 764 168 261 Net Subscriber Additions 718 920 289 510 1,159 1,699 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 NETFLIX#7Q1 Revenue (in millions) $305.3 1Q07 Note: Netflix implemented price reductions in July 2007 Total Revenue $326.2 1Q08 $394.1 1Q09 $493.7 1Q10 NETFLIX#8Q1 GAAP Net Income & Fully Diluted EPS (in millions) $9.8 1Q07 Net Income $13.3 1Q08 $22.4 1Q09 $32.3 1Q10 $0.14 1Q07 Earnings per Share $0.21 1Q08 $0.37 1Q09 $0.59 1Q10 NETFLIX#9Churn 4.4% 4.6% 4.2% 4.1% 3.9% 4.2% 4.2% 4.2% 4.2% 4.5% 4.4% 3.9% 3.8% 1Q07 2Q07 3Q07 4Q07 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 NETFLIX#10Subscriber Acquisition Cost $29.48 $28.89 $32.21 $26.67 $25.79 $23.88 $26.86 $25.23 $21.54 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 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 content library Proceeds from sale of DVDs Other assets Non-GAAP Free Cash Flow 1Q09 2Q09 3Q09 4Q09 $65,633 $75,302 $78,311 $105,817 $75,412 (6,572) (200) (46,499) 2,726 (2) $15,086 (6,933) (9,994) (22,433) (6,393) 1,159 (43,224) (46,273) (57,048) (36,902) 11 3,345 134 1Q10 $26,315 $25,523 3,934 (72) (130) 3,984 (172) $30,198 $35,799 NETFLIX#12Business Outlook *Fully Diluted Subscribers Revenue GAAP Net Income GAAP EPS* 2Q10 14.715.0M $34-40M FY '10 $0.62 -0.73 16.5 17.3M $517-525M $2.11 2.16B - $132 – 144M $2.41 -2.63 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 2Q09 10.3 10.6 25% 26% $394 $409 21% 21% $36 138% $22 68% $0.37 76% 36% $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% Mid-point of Guidance 2Q10 14.9 40% $521 28% $37 14% $0.68 26% 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 $997 36% 46% $3 -86% $42 96% $0.64 94% 2006 6.3 51% ΝΑ $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 16.9 38% $2,135 28% $138 19% $2.52 27% NETFLIX#15NETFLIX Q1'10 Financial Highlights | April 21, 2010