Netflix expects sustained double-digit revenue growth in 2027 on membership, pricing and ads, with expanding margins and higher free cash flow; full 2027 guidance comes in January. Ads grow over 80% this year but lag the ambitious target on rollout delays; churn improved and 2026 price rises were in line.

Good evening and welcome to Netflix's Q3 2026 results interview . I am Spencer Wang, Vice President of Finance and Capital Markets. Joining me today are Netflix co-CEOs Ted Sarandos and Greg Peters, and Chief Financial Officer Spence Newman.

Our first question comes from David Joyce of Seaport Research Partners. He says in his question that investors are looking for more clarity on what has always been Netflix's industry-leading strategy.

What role do live events, a shift to a centralized streaming portal, short-form video offerings, third-party content, or user-generated content play in your vision for Netflix to regain its competitive edge and improve market sentiment ?

I will answer, and thank you, Dave, for this question. It gives us the opportunity to explain, of course . But our strategy has not changed; it has always been and still is aimed at combining best-in-class entertainment, industry-leading discovery, global distribution, and the best possible revenue generation.

We want to be the indispensable entertainment service , the first choice for members when looking for a great series or a standout movie, and the last service they might consider canceling their subscription to .

Now, the cornerstone of this strategy is Netflix's original content. Exclusive, ambitious , and professionally produced series, films, and live events. The market has accustomed us to expecting something exciting and new to see every week.

Therefore, we must always provide both quality and quantity.

As for live events, in a world full of choices, we have acts like K- Pop, Wednesday and Bridgerton; With all those options available , live events such as the Canelo- Crawford fight or the sporting events we offer with the NFL and MLB are a huge success.

It stands out and attracts attention, brings in new members, supports our advertising revenue, satisfies our existing members, and generally enhances the value of Netflix. Therefore, we fully embrace this strategy , pairing those exclusive programs with a wide range of third-party programming, including recurring shows and deals we recently made with Sony, Disney, Universal, and others.

In addition, we are looking for new ways to bring third-party content into the service to complement those original works, as we just did with the TF1 network in France, where we are integrating a whole network of programs.

With all that said, it is very important to remember that about 95% of our spending and almost all of our revenue is focused on that core where we see broad prospects for future growth.

As for the other areas you mentioned, they are initiatives in their early stages aimed at exploring future expansions in programming, and we are keeping our focus and investments in those areas within a very narrow scope because the core of our work is the primary engine of growth.

Our next question comes from Eric Sheridan of Goldman Sachs. How would you describe recent interaction trends in the United States compared to other geographic regions? How can you frame any variables such as content, seasonality, and competition that might be behind any variations in engagement by region?

I will answer this question, and I will start with the overall level of interaction , which we consider to be the sum of the actual value we provide to members. It is about the quality, quantity, and variety of viewing.

This remains intact, and it drives our business model. Our best evidence that we offer that value is our cancellation rate. We have a healthy organ retention rate in every region.

The rate of subscription cancellations improved in the third quarter globally and in the United States on an annual basis, and was better than expected, and is already a leader in the sector .

The ultimate determinant of whether we deliver that value is the reaction to price changes. The recent price changes we have made, including in the United States, have gone well.

We have seen results consistent with previous changes and our expectations. In line with all this performance, we plan to achieve our full-year guidance.

I have spoken about specific interaction trends by geography, and as you saw in the message, we have achieved remarkable results in the Asia-Pacific, Latin America, Europe, the Middle East and Africa regions.

Our local operations from those regions foster interaction and drive business growth. You can see how our business model works here. We have highlighted India in particular, which had a strong list with works that performed very strongly.

As a result , viewing hours in the third quarter in India grew by 24% on an absolute basis. It also increased on a per-member basis, and all of this strengthens membership, and has driven membership, and revenue growth of about 20% year-on-year.

So, this is a great example of how the basic model works. We deliver value to our members, and we get the business results we look forward to.

Moving on to the United States, the other region, our interaction is solid and will allow us to continue to grow as we have over the past few years, but we know we can do better.

This "best" option is our potential profit side . Our goal is to move from a very good level to a great level in the performance of that list. But I just wanted to point out that we are very excited about what's to come.

So, for the United States in the fourth quarter, and in terms of TV series, we got off to a great start with the miniseries "East of Eden". All my acquaintances talk about him.

We have the fourth season of "The Diplomat," which is the best season of the show so far. Absolutely. Later this quarter, we have the series "The Body". And we have "The Murder of John Bennett Ramsay".

And we have the final season of "Emily in Paris". As for films, we have "The Extra Adventures of Cliff Booth" starring Brad Pitt, directed by David Fincher, and written by Quentin Tarantino.

You couldn't ask for a better list of stars than this. And we have the movie " Bad Day" with Cameron Diaz. Then we have " Steps," our new animated film featuring Ali Wong, Stephanie Hsu, and Amanda Seyfried.

In addition to all that, we have NFL games on Christmas Day , and now we're going to be featuring the first game on Thanksgiving Eve , which we'll be livening up with U2 in a halftime show .

U2 is a legendary band, and it's one of my favorite bands. Moving on to 2027, our list of works includes " Narnia". And we have " Charlie and the Chocolate Factory". Then comes "the Flood".

And "the third round". The fifth season of " Bridgerton," the third season of "Wednesday," Michael Fassbender starring in a new Kennedy family series, "The God of the Forest," and "Rabbit Rabbit, " to name a few .

We will have games in the National Football League , and one game in the last week of the regular season. This is the first time we have done this . And of course, the Women's World Cup in the United States and Canada. So there's a lot to look forward to.

This next question comes from Rob Sanderson of "Loop Capital". Given that Netflix is a massive, global content production operation, how might a new perspective in senior management impact the organization?

What are the elements of success from his time at Disney that you feel most optimistic Peter Rice can replicate at Netflix? Are there specific aspects where you believe the content organization could perform better under new leadership?

Okay Rob, that's a great question. First of all, I would like to take this opportunity to thank Bella Pagaria for all her wonderful contributions to Netflix. Bella has had an amazing career spanning a decade here.

I have achieved many outstanding successes. The teams led through many expansions into new types of content. She also did the hard work of building this amazing international team, which creates local content around the world, and that has become a great competitive advantage for us over the past decade.

So, I just wanted to take this moment to thank Bella. Also, going back to that great list you just heard from Greg , there's a lot to be excited about. But I know we can perform better, and we want to build on this momentum.

We saw an opportunity to take our agenda to the next level, especially in the United States, where we can make a big impact when we create a huge, exciting show that members love and talk about all over the world.

I am very pleased to have Peter Rice join us as our new Head of Content.

Let me give you some information about him. I've known Peter for about 15 years, and I have to tell you that the wave of excitement about his coming to Netflix from all over the industry and the creative community has been more than wonderful.

He is one of the truly rare people in this industry who have led television networks, film studios and streaming services. His creative instinct and business acumen are exceptional .

He is truly an expert in managing quality and scale on a massive scale, and he does so across every conceivable form of entertainment. Whether it's networks, prestigious satellite channels, broadcasting, theatrical performances, television movies, or live sports.

Most importantly, Rob, Peter Rice understands talent relationships, and in a competitive market, creative talent has choices about where they want to work , and we want Netflix to always be the place where they love to do the best work of their lives.

Peter is the perfect person to lead these efforts in the United States and around the world. This is a key aspect of what I believe Peter can improve in the future.

We have a follow-up question on the same topic. This question is from Matt Conden of Citizens Bank. With Peter Rice taking over as Chief Content Officer, what are the biggest opportunities you see for developing Netflix's content strategy under his leadership?

Should we expect any fundamental changes in the types of content you prioritize, in how you allocate content spending, or in your overall approach to boosting engagement, or is it more about improving execution within the current strategy ?

Yes, thank you, Beth. Look, our business and our business model are achieving success. There is no need to make a radical change in strategy. We really need better implementation in the United States .

Our content around the world is achieving great success, as you have heard from Greg's examples. We are seeing work in Latin America, Europe, the Middle East, Africa, and Asia Pacific that is boosting engagement, subscriber growth, revenue, and profits .

The United States is also achieving success. But it is not growing as fast as possible or as fast as we would like. As you know, we have achieved some very good results this year.

But other areas depend on some of those businesses being very successful to spread throughout the world. So, we really need to focus on that implementation, you know. When we talk about success in the Asia-Pacific region , India is a great example, but this success is also happening in Korea and Japan.

When we look at Europe, the Middle East and Africa, we look at the Nordic countries, which is a very mature market for us, and the content listings there are achieving amazing results .

This is proof that when we focus properly, make the right decisions, and are creative in execution, we can have a tremendous impact on our business around the world. Now, Peter brings expertise in both art and commerce, television and film.

It is precisely that balance of skills that will help guide us through our next semester. There is a lot to be excited about in our Q4 agenda , and a lot to look forward to in 2027.

I believe Peter will already be able to make an impact on those projects in the works, even in the short term. Therefore, we are very excited about him joining us.

The next question comes from Dan Carnos of StoneX. The question is: I wanted to address the recent staff reduction, the largest since 2022. I realize you may not want to go into details, but how should we understand the thinking behind it?

I can clarify some points here. Going back to basics, we have a big and ambitious task ahead of us. We aspire to bring entertainment to the entire world, literally. Achieving this great task requires us to be extremely disciplined with regard to where we focus, our investments, how our employees operate, and how we direct our resources.

When you achieve significant revenue growth, as we have done over the past few years, and you are in a highly dynamic and constantly changing market, I don't think it's unusual to find some areas that we built up quickly that we end up increasing investment in, or opportunities to adjust how we operate to best drive the business through the next phase of growth.

We prefer to make these adjustments organically and gradually. This is the best way to do it . We believe that our mission is essentially to continually try to adjust and modify.

But sometimes a team needs a driving force. The company needs a mandate that requires the entire organization to ask tough questions about where we can be most efficient, and where we can make tough decisions about what we can cut back on or redirect our investments into.

We do not take these decisions lightly, but we also believe in our responsibility to make difficult trade-offs in service of our members, partners, employees, investors, and ultimately, our long-term growth.

This was the simple thinking behind it and what motivated these recent changes.

Accordingly, our next question comes from Doug Anmuth of JP Morgan. Can Netflix increase revenue growth to a double-digit rate in 2027? What are the basic pillars for achieving this, and is it sustainable?

Spencer, I'll take care of answering that question. I should contribute a little to this call. I would like to say that I appreciate this question. We are achieving strong growth in 2026 initially, because all three of our revenue pillars are working and contributing to it.

These include membership growth, pricing, and advertising . We expect to achieve strong revenue growth in 2027 as well, based on the same three pillars. We know there are questions about the growth in viewing hours.

You know we talked about that. Greg and Ted just talked about it. To be clear, we want to increase viewing hours more quickly. We are not satisfied. We are working on it. And again, as both Greg and Ted have made clear, this will act as an accelerator for what is already a healthy underlying growth in revenue.

We saw that in India. We just talked about that . Strong content, a significant increase in watch hours, and revenue growth of nearly 20% , and that's just one of the many success stories across regions that TED also mentioned.

But as you know, even with the modest growth in watch hours we are achieving, we are delivering increasing value to our members through the quality, quantity and variety of viewing with a steady stream of hit shows in most regions.

And that's really the great thing about our business model. It's the stability of our growth engine. We do not rely excessively on any specific address or on exceptional performance from a single region to achieve healthy growth.

Therefore, it is too early to issue full guidelines for 2027 . We will do that in our next call or the fourth quarter call. But our financial goals have not changed. We look forward to maintaining double- digit revenue growth.

We look forward to expanding margins and increasing free cash flow.

The fourth-quarter guidance includes approximately 120 basis points of costs associated with staff reductions. What annual savings rate do you anticipate , and how much should we assume will be reinvested to support the expansion of operating margins in 2027?

Well, I may disappoint you again with regard to specific directions. We will not quantify the impact of the expenditures in 2027, but as we indicated in our letter, this hard work that Greg reviewed and the prioritization ensures that we can continue to invest heavily in the areas that have the most impact to improve our service and drive innovation and growth.

So, we are really focused on finishing this year strongly. We will provide guidance for 2027 in January, including margin guidance, but there is no change in our philosophy of, of course, investing in our business to drive that growth and innovation, and also to steadily increase margins each year.

How did the integration with TF1 perform in France during the first few months? How has this experience affected your perspective on distributing other services via Netflix? What guidelines do you use to evaluate these types of partnerships in the future?

As you consider the evolution of Netflix's offerings, how interested are you in third-party content partnerships or additional services that could be integrated into the Netflix experience?

Do you see an opportunity to expand the value of the platform through aggregation without necessarily owning or licensing all of that content directly?

Perhaps to begin answering this question, let's take a step back to put some context in place, because I know these may seem like new and innovative techniques or methods to us, but in fact they serve a purpose that has been with us for a long time , ever since we started the streaming service.

This is the ongoing expansion of entertainment offerings, providing greater value to members. Our members constantly tell us that they want more from us . We see this in their preferences for how to use the service.

Therefore, fulfilling this desire over many years has been a goal, and I would say it is the main driver of our expansion and our ability to maintain subscribers at an industry-leading level.

Therefore, we are fully focused on that. We are always looking for new ways to expand our offerings, new ways to provide more professionally produced movies, TV shows and live events, and more intrinsic entertainment value.

This means we do things like licensing. It also means that we are looking for new creative partnerships, just as we did with TF1.

And perhaps a moment about why partners are interested in working with us. We have a wide distribution network . We have a first-class product experience , which is a good home for all the work they do and the content they create.

We have industry-leading revenue generation. All of this makes us a great partner for studios, networks, and creative talent. We can find new fans. We can generate additional revenue for them. That's why they want to partner with us.

So, specifically with regard to your question about TF1, we are very pleased with the early performance we have seen in that integration. We have been able to enhance an already very compelling service for our French members with more popular local French programs .

We have seamlessly integrated the TF1 product experience in a way that supports their brand, but also keeps things unique. We believe this approach is beneficial to them, supports their value proposition, and is also beneficial to us.

It's good for the customer too, because it shows what they're getting . We grow TF1 views on our service every month. Therefore, we are constantly working to improve that product experience.

We see a whole path and opportunities for improvement that we know we will be able to achieve based on our past track record of being able to improve these things. In addition , our early analysis and testing indicate that interaction with TF1 adds value to our platform.

So, basically, everything is going well with regard to that partnership.

Regarding what can be expected in the future, we certainly believe in our ability to replicate similar positive results with other partners where this approach meets their needs well.

These are opportunities that we will schedule and prioritize among all other growth opportunities available to us. We have many ongoing projects that we are working to achieve .

Regarding the second question about additional services that I believe Matthew was asking about, they are similar to other subscriptions or hybrid services that a customer can choose to add to their offerings.

That would be another way to expand our entertainment offerings. We believe that the same intrinsic benefits for partners, such as increased access and additional profit-making, will also apply in this model.

We also believe that much of the product experience we have built will be successful and appropriate for this type of service integration as well. So, there is nothing to announce today, but you should expect that we will continue to find new ways to deliver more core entertainment value to our subscribers.

Please discuss how you will handle film screenings in the future. I believe you have released 30 films in theaters. We are excited for Cliff Booth's IMAX film and Narnia next year.

Do you see the potential to create more buzz by showing in theaters first, or does the decision depend on each project individually? What is the appropriate time period with regard to the cinema screening window?

That's a great question. A fascinating set of questions, I must say. But as a reminder, we are a company that relies primarily on live streaming . This is the essence of our work.

But with each new film, we take into account the film itself, the target audience, and the filmmaker when setting the release plan. Yes, we will be releasing around 30 films in theaters this year, which is roughly the same as we did last year.

Each of these films has its own special and designed release style . So, we start by looking at the projects we have, and asking ourselves, how do we best serve movie lovers, many of whom are our subscribers, who would like to see that movie in a theater?

And how do we do that without harming the viewing experience on Netflix? Therefore, part of that involves looking at specialized film releases. We have done this for the better part of the past decade.

At the other end of the spectrum are big family movies that get lots of rewatches as well as Netflix premieres. We look at and deal with these two categories of films in completely different ways .

So, for specialized releases, we are currently showing the film "La Bola Negra" in cinemas for 47 days. It is simply a wonderful film in Spanish. We also have a theatrical release coming soon for " Mosquito Bowl", a little sooner .

We are collaborating with IMAX to release David Fincher's film "The Further Adventures Misadventures of Cliff Booth". It's worth repeating over and over again because it's very exciting for us too.

We made a deal with IMAX to show it on the biggest screens for a few weeks, four weeks before it was released on Netflix. As for the big family movies you mentioned , we have already announced a 45-day theatrical run and wide-ranging release for Greta Gerwig's new film "Narnia: The Magician's Nephew" and our animated film "Charlie versus the Chocolate Factory".

Both films possess huge global intellectual property and a large global fan base. So, we are very excited to see how they will perform next year. Our cinematic strategy has therefore evolved.

It has evolved to include a traditional 45-day screening period for a limited number of films . But the other thing that was important to people was that we now announce box office revenues for these releases.

This is something new, and it seems we have chosen a good title to start with, which is "La Ballena Negra". We have announced our first box office figures this week for the opening weekend.

The film opened with an average of over $69,000 per screen, the second-highest average per screen ever for a non-English language film in the United States . It comes in second place after the film " Parasite," which won the Academy Award for Best Picture.

So, we are really excited about the position we have reached . Of course, we now have one week of public box office reports under our belt, and we are very happy about that. So, let's review this again after about 6 months.

Sean also has a follow-up question . How would you describe the third-party licensing market? Disney’s deal for “ Ice Age” and other content appears to be a win-win for both parties, and this comes after the renewal of “ The Walking Dead” and the power of games.

How should we think about the mix between self-produced content and future-proof licensed content?

Yes, well, remember that exclusive original titles have always been a cornerstone of the service. We recognized this value more than a decade ago when we entered the field of original production.

This is why we continue to expand our investments in original content across all categories and geographic regions. But we are very pleased to license the titles that are being shown for the second time and that complement our original exclusive offerings.

It's thanks to our extensive distribution and best-in- class technology. This makes us ideal partners for studios, networks, and creative talent. As you know, as a result of these things, we still enjoy strong access to content around the world.

I would like to tell you about two great examples from past years, namely the series "The Walking Dead". It is a timeless series with a large number of episodes and people love it very much.

The series "Power" is a great show, but it did not receive enough distribution. On Netflix, this series will introduce a whole new wave of viewers to the world of " Power". So, this is very exciting.

But I really want to focus on two recent deals that we are very excited about. I mentioned the Disney deal that we just launched in October. That deal brought all the "Ice Age" movies to Netflix.

Along with a selection of other Disney movies and series, and some upcoming films. As I mentioned, it's a win-win deal for both sides . The reason it's a win-win deal is that we definitely benefit from expanding our entertainment offerings.

Disney benefits from the revenue and from putting that content in front of our large global member base . Our members, of course, benefit from receiving additional Disney content.

We are already seeing some of those benefits from the "Ice Age " movies. All five films have made it into our top 10 list. This is really exciting. This benefits Disney, because as they prepare to release the next "Ice Age" movie in theaters in February, titled "Ice Age: The Boiling Point," there will be even more new fans of the "Ice Age" series.

And by the way, yes, Netflix just promoted a Disney movie during our earnings call. You're very welcome, Josh.

the revenue and from putting that content in front of our large global member base . Our members, of course, benefit from receiving additional Disney content. We are already seeing some of those benefits from the "Ice Age" movies.

All five films have made it into our top 10 list.

Another deal to talk about is in Brazil. Last week, we and Globo announced our largest ever content licensing agreement. This is the most important licensing deal we have ever done in Brazil.

We are excited to be working with "Globo". They are the leading producer and distributor of TV series and movies in that country . They also long refused to license content to us locally.

In the past, we have featured a lot of Brazilian "Globo" content on Netflix throughout Latin America and around the world, but not in Brazil. Therefore, we are excited to be in this new phase of our business.

We believe this will benefit us and our members in Brazil. It includes local titles of various types. Among them is the Oscar-winning film "I'm Still Here". And the series "India: A Love Story" which won the International Emmy Award.

This deal covers a good mix of local, regional and global rights. So, we are very excited about this . This step forward with Globo in Brazil represents an exciting time in our journey together.

Access to licensed content and available titles will always be in a state of flux. But we expect to have ongoing opportunities for the best series and films with all suppliers.

It's a bit complicated because all our suppliers are also our competitors. But our deals bring in revenue that we desperately need. It certainly increases awareness. This awareness benefits them because it helps increase the value of their intellectual property.

Therefore, these deals are truly beneficial for both parties. As we stand here today, we are not really dependent on any single supplier, but we are happy to work with almost every supplier in the world.

Our advertising business has achieved impressive growth since its launch, and we see a long road of continued growth ahead. Since then, we have been committed to building an innovative advertising platform, delivering a superior offering to our clients, combining the best of digital and TV advertising, all while respecting the privacy of our members and ensuring we maintain our advantage in first-party data.

Our integration models and partner integration models maintain that advantage while achieving the best possible targeting.

We set ambitious growth targets for our advertising business this year. We have also developed an ambitious product roadmap aligned with this strategy, and I would point out that our build process is the fastest for a similar advertising group in our industry.

However, we are currently slightly behind our ambitious target for this year. We are still in a growth phase, and to put things in perspective, we are growing our advertising business by more than 80% this year.

The year. So, we're excited about the pace at which we're moving.

I think it's worth noting that if you're ambitious enough in your roadmap, you'll sometimes fall behind on some objectives. In this particular case, we've experienced some delays in rollout and partner integration for some of these new advertising products.

So, getting to the integration model we want sometimes requires more work with our partners, but we strongly believe that a small short-term sacrifice for a better long-term strategic position is a good trade-off in the end .

We also don't see this impacting our long-term gains. In fact, striving for a more challenging delivery model tends to maximize our overall speed. It's a strategy we've used very successfully many times historically .

We see the benefits when we continue to roll out other products, such as new ad formats, which help us grow.

So, to take a step back for a broader perspective, our priorities for this advertising activity have n't changed. We want to enhance our full ad funnel optimization solutions. We want to deliver new ad formats and new ad products.

We want to increase the availability of our first-party measurement and reporting tools. Regarding the specific question, it still Overall demand is strong. Our advertiser base continues to expand, and ultimately, advertisers want our new products and features, which is a huge growth mechanism for us.

So, we're very focused on getting them there as quickly as we can .

Yes, we're very excited to be making our first expansion into advertising countries since launching the service. But to answer the question, I'll start by pointing out that we run our advertising business for overall revenue and growth.

So , we look at average revenue per membership and fill rates as a means to an end, not an end goal in itself. That said, there is still a gap between the average revenue per membership in the combined Ads Pack and the average revenue for the Standard Ad-Free Pack, but that gap is narrowing.

And that gap represents revenue growth that we haven't been able to fully realize in the near term. That means it's an opportunity for us. We can improve our advertising capabilities.

We can close that gap over time. We've seen exactly that process happen over the past year . We've broadened our demand sources. We're continuing to implement rapidly on our ad technology suite.

We're adding more features, more ad products, more metrics, and making us easier for everyone to use. All of these things boost demand, drive competition, and those returns increase fill rates and drive average revenue per member upward.

And of course, while we're doing that , we're also signing up more subscribers to ad plans. So that drives inventory upward and creates more room for us to grow . So this double-double-growth phenomenon, where we're growing inventory and growing in monetization from that inventory, I expect will continue for some time.

Probably as we gradually close the average revenue gap, as we've seen, we'll push to improve our ad technology products and market reach capabilities, all of which drives better unit performance and monetization for the next several years .

Well, regarding the first part of Sean's question, the 2026 price changes went well. So, across all the types of markets where we've made price changes, the member response you mentioned regarding opting out and subscribing isn't typically affected by these factors.

But that member response is consistent with previous price changes and our expectations. Again, we believe this is a strong indicator of the value we offer members, measured by quality, quantity, and healthy viewing variety.

And perhaps also as an external benchmark for that value, take the US as an example: Netflix subscribers pay less per hour of viewing compared to other on-demand video services in the country.

In some cases, they would have to pay more than double per hour for a competing service. We believe this is a really good indicator of how much value we offer for the price.

Note also that we've seen continued strong subscriber retention in every region. The churn rate has improved globally and in the US year-over-year , so it's better than expected.

These things also reinforce the signs That value makes us increasingly confident in it.

Now, regarding the second part of your question, we operate globally, in approximately 190 countries. These countries vary considerably . They differ in our level of penetration.

They also differ in market maturity, which means the presence of enabling conditions in the market, such as smart TVs, good internet connectivity, payment methods, and everything that allows subscribers and consumers to access our service and have a good experience.

These countries also differ in whether we currently have an advertising product in them. We are working to increase the number of these countries, but this is an important part of the equation.

Therefore, the drivers of business growth have significantly different weights across all these countries and their diverse patterns.

If we look at our more mature markets, such as the US, UK, and Australia, where we have a deeper penetration, the drivers of revenue growth in those markets will lean towards average revenue per member (ARM) growth and advertising growth.

In newer markets, such as India, Indonesia, and Colombia, we have significant room for growth in membership. So, we will continue to offer affordable entry-level packages. We expect member growth to be the primary driver of overall revenue growth in these types of countries.

There are also many middle markets where we believe we can achieve a balanced mix of both member growth and average revenue per member (ARM). This includes advertising markets like Mexico and Japan.

We have a lot of people we can recruit in those countries, and we can offer greater value in our offerings there, which will boost ARM and advertising revenue. There are also countries with no advertising presence, like the Philippines and Turkey, where we believe there are opportunities for both member growth and increased ARM .