Netflix is spending around $17B on content this year and next but has hinted that it may boost this after a strong quarter.
The streamer reported positive subscriber numbers today after two quarters of subs losses, giving it more confidence that the great comeback has started.
Co-CEO Ted Sarandos said, during its quarterly YouTube investor video, that it will “revisit” the $17B figure, which has been spent on hit shows such as Stranger Things 4, Dahmer and The Gray Man.
“What we’re seeing is that the both the scope and scale, as well as the range and the cadence of hits is improving, so I feel better and better about that $17B of content spend because what we have to do is be better at getting more impact per billion dollar spend than anybody else. That’s how we’re focusing on it. I think we’re spending at about the right level. As we re-accelerate revenue, we’ll revisit that number, of course, but we’re pretty disciplined bunch about that,” he said.
This comes three months after CFO Spencer Neumann said $17B was “the right ZIP code” for spending.
Netflix posted global subscriber levels of 223.09 million, up from 220.67 million in the prior quarter. Revenue and earnings per share also both came in ahead of Wall Street expectations.
Revenue of $7.93 billion and earnings per share of $3.10 exceeded forecasts for $7.84 billion and $2.19, respectively.
After years of relying on debt and having negative cash flow as it sought scale, Netflix has become a consistently cash-flow-positive company. Free cash flow in the quarter was $472 million, compared with -$106 million in the same period a year ago. For all of 2022, the company expects to be north of $1 billion before experiencing what the letter called “substantial growth” in free cash flow in 2023.