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業績會第一現場

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奈飛2026财年Q2業績直播

Key Takeaways (AI-Generated)

Financial Performance

- Q2 2026 revenue growth of 12% year-over-year with strong momentum continuing

- Record $4.7 billion share repurchase in Q2, largest in company history

- Content expenses up 10% annually, disciplined growth below revenue expansion rate

- View hours increased 2% in first half, adding 1.5 billion incremental hours

Business Highlights

- Approaching 1 billion global audience with significant growth potential remaining

- 'I Will Find You' became biggest original series launch of 2026

- Live programming drives 6 of top 10 member sign-up days despite 1% view share

- Cloud gaming shows 11X increase in monthly active players since October launch

Financial Guidance

- Q3 2026 revenue guidance of 11% FX neutral growth expected

- Full year 2026 targeting 13-14% top line growth, approximately $6 billion incremental revenue

- Content investment growing at disciplined 10% pace, slower than revenue growth

- Continued focus on sustaining healthy revenue and profit growth trajectory

Opportunities

- Only 45% penetrated into 800 million addressable households globally

- Capturing just 7% of $670 billion addressable revenue market opportunity

- AI tools reducing production costs by half while doubling speed

- Strategic partnerships like TF1 showing promising early integration results

Full Transcript (AI-Generated)

Operator

Good afternoon and welcome to the Netflix Q2 2026 earnings interview. I'm Spencer Wong, VP of Finance and Capital Markets. Joining me today are Co-CEOs Ted Sarandos and Greg Peters and CFO Spence Newman. As a reminder, we will be making forward-looking statements and actual results may vary. We'll now take questions submitted by the analyst community.

Spencer Wong

We'll begin with a question on our guidance and our business outlook and this question comes from Steve Cahall of Wells Fargo. What is the main driver of FX neutral revenue growth slowing from 12% year over year in Q2 to 11% year over year as a guidance for the third quarter suggests? Spence, do you want to take that?

Spence Newman

Yeah, sure. Thanks Steve. So look, we don't manage the business on a quarter to quarter basis. Our goal is to sustain healthy revenue and profit growth. We talked about that in our letter. Every quarter we're guiding as you say to 12% revenue growth in Q3 reported 11% FX neutral. The Q3 revenue drivers are very similar to Q2. It's primarily growth in our subscription revenue from increases in memberships and pricing and higher ads revenue.

We continue to see healthy acquisition and retention trends on the membership side and our recent price adjustments are going well on the pricing side. Now recall there is a little bit of quarter to quarter choppiness and growth because last year was more back half weighted. So that may be a little bit of what you see in the deceleration. But honestly it's not what we managed to. We managed to the full year and halfway through the year we're making strong progress against our goals and we're tracking to our financial plan for 2026.

We expect to deliver another strong year with, as you see in the guide, 13 to 14% top line growth for the full year. That's roughly 12% FX neutral. We're about $6 billion of incremental revenue year over year. And by the way, when we finish 2026, it's worth saying also that in many ways we're still just getting started as a company. We're entertaining an audience approaching a billion people with still lots of room to grow into our addressable market.

On every measure we're under 45% penetrated into addressable households around the world is probably 800 million addressable households. We're capturing, you know we think just 7% of addressable revenue market is about 670 billion of addressable revenue in the countries and categories in which we operate today. And we estimate that we're only about 5% of TV view share globally. So we're delivering on our 2026 plan and we believe we got lots and lots of runway for solid growth ahead of us.

Spencer Wong

Thanks, Spence for that thorough answer. I'll now move us along to a topic on the topic of engagement where we do have several questions. This first one is from Rob Sanderson of Loop Capital Markets. His question is management has stated that engagement quality is improving even as reported viewing hours per member have softened. Can you help investors understand what internal metrics provide confidence and how these translate into lower churn pricing power, higher ads monetization, etcetera? At what point would slow growth in total viewing hours become a concern?

Greg Peters

I'll take this one and unpack it a bit, since I know that there's plenty of interest in this topic. Start by saying there is not a linear relationship between view hours and revenue and profit, because all hours are not created equal. All hours don't pervade the same kind of value to the business. And a really great example of this is live programming. So live events do a lot of lifting for us for acquisition, they're good for monetization, they drive ad revenue, fandom, they're also a promotional platform, but they do not yield typically as many raw view hours.

So live we expect will be 5% of our content budget this year, but we think that'll only be 1% of view hours. Having said that, you know 6 out of top 10 new member sign up days over the past five years have come from live events. And if you compare that to another content category, take animation series, kids, family TV, it's also about 5% of our content spends the same amount of spend, but it's going to drive, we expect 8% of you hours, so same spend and 8X the raw view hours.

You can see the differences there even though because as you indicated by the amount that we're investing in both those categories being the same, we think they're doing the same value for the business. So we're constantly looking to improve across every dimension of engagement. We look at these as 3 dimensions, quality, variety, quantity because they taken collectively drive acquisition, they drive retention, they drive the value that our consumers and our advertising partners ascribe to our service.

We described in the last few earning calls the progress we've made in quality of the years. We're not going to go into the details of that quality metrics because is frankly, it's taken years for us to develop it and vet it and assess it and improve it. And we think that those details are a competitive advantage. We're also continue to expand the variety of our entertainment offering. You see us launch new types of content like live like video, podcast, cloud TV, games. Those are all doing things, different things in our portfolio to support different needs from our members.

And then on quantity, few hours grew 2% in the first half of 2026. That's an incremental 1.5 billion hours relative to the same period last year. It's a slight acceleration compared to 1.5% growth in 2025. And just to be very clear, like all those other dimensions, we remain focused on continuing to grow that number and better understanding how we are doing at delivering member value. Member love is critical to our business. We get it. We geek out on improving that understanding, operationalizing, understanding.

And with regard to engagement, when I started about 20 years ago, we had one number to describe engagement hours, just flat hours, no waiting, no adjustments. And very similar to how we've evolved other metrics in the business since then, we've gone through about a dozen major iterations of our understanding that we get more and more sophisticated because we know ultimately it's combined quality, variety and quantity of engagement that translates into satisfaction and value for members and that drives the strong business outcomes we see right now industry leading retention.

We see increased willingness to pay, strong advertiser demand and those ultimately drive the top level metrics of our business revenue and operating profit, which are really the ultimate signs of our health.

Spencer Wong

I have this visual of you geeking out Greg. It's hard to see, it's hard to see Spencer geeking out, but I can see us geeking out. Those are those are 20 years of debates and and wonkiness. Well, let me geek out on the next question which comes from Steve Cahall of Wells Fargo. His question is amortization expense for content growth is accelerating in 2026. How is the slate performing and what metrics are we watching to see how this growth in content drives increase member value? How do we think about the expense acceleration converting into revenue acceleration?

Ted Sarandos

I'm going to take that, Steve. Look, I think when it comes to programming spend, there are three really important takeaways. First, the to remember is that the vast majority of our programming spend goes into the core TV series and film where we have a really strong track record, more than a decade of translating those investments into value for our members and returns for the business. I'm going to come back to that core in just a second, but the second one is that we're really disciplined investors.

So there isn't some hyper acceleration of content investment. We grow the content spend slower than revenue while we're continuing to invest in a huge addressable market. So we're forecasting content expense up about 10% this year. It's a little higher than the 8% we averaged over the last five years and below the 14% that we averaged over the past decade. The third thing we want you to remember here is that when we expand into new entertainment offerings, new initiatives, we do it gradually. We do it where we believe we can add more value for our members and we do it where we believe we have the right to win.

And then we look for the positive signals before we invest at material scale. This is our MO. It's been our MO for some time. You asked how the slates performing. There's a lot to be happy with in Q2. I will find you. It was our biggest launch of the original series. This year, Swapped is on track to become the second biggest original animated film, right behind K pop Demon Hunters, which is exciting. Speaking of K Pop, we have K dramas like Teach You a Lesson, which is on track to become the second most watched South Korea show ever globally.

And it's on track to be our biggest series in South Korea of all time. There's a show called The Polygamist. You probably is not on your radar, maybe Steve, but it's out of Amia. It's another great example of the understand of our understanding of the local markets and the local regions. The Polygamist was a popular novel from Zimbabwe more than 10 years ago from an author named Sue Nyathi, and the teams adapted that into a soapy series for South Africa, where it's now a huge hit and is traveling all over the region and all over the world.

In Latin America, we've got a big season that just came back for Rosario Tiaras. This was a show that started its life as a license show from TV Azteca in Mexico. After three successful seasons, we picked it up and it produced an original season 4, Season 5, and just screened that season 6. So you're seeing the slate perform around the world? Which is way in a real differentiated part of our business. Now with that said, the with the core, we're also really pleased with with the investment so far in our live programming.

It plays a really important role as Greg mentioned earlier, driving acquisition, accelerating ad revenue, fueling conversation, helping us to launch new shows. It's helped us build our and it's also helping us to understand what are the benefits of live over the over the entire catalog. So, you know, we're ramping up our live event slate. You saw the Kevin Hart roast in Q2, the Major League Baseball Home Run Derby earlier this week. What was really fun at the Derby we had, we produced an original exclusive Hot 1 special that we shot at a baseball field to promote Will Ferrell's new series, The Hawk, which just launched today actually.

And I think it's a cool example of the intersection between our core, you know that core series, The Hawk, our expansion of the new exclusive creator content with Hot Ones with Sean Evans is a best in class creator. We're thrilled to be in business together. Plus live sports all coming together on a baseball field and on Netflix around the world. The result there is a highly attractive scalable return on content investment and it ladders up to healthy business metrics that Greg just detailed and our strong growth in revenue, dollar profit and profit margin.

Spencer Wong

Thanks, Ted. Our next question on engagement comes from David Joyce of Seaport Research Partners. The question is attention is being raised that your second season viewing of series is dropping and therefore affecting engagement growth. How would you address this? Are you going to revert to releasing 1 episode at a time or making longer seasons with more episodes or managing the production process so there is less time between seasons?

Ted Sarandos

Yeah, Ted, thanks for asking David a real really appreciate the question because in aggregate we are not seeing any material change in our second season viewing compared to season ones. Our our second seasons are performing well within our bands of expectation. We you know very often we see drop off from season 1 to season 2. It's very common in the industry and it's even more so with us because we launch our show so big. So you know our global reach, our discovery mechanism releasing all at once.

This enables us to find a very large audience early. So our shows tend to start really big while most other, you know, places, their shows start pretty small and occasionally grow from there. For example, may I just mentioned the polygamist from South Africa that shows already had 24 million views in five weeks and it's still charting. When we look across the entire portfolio, across all the regions, all the content categories, our Season 2 fall off is actually slightly improved this year relative to last year.

Now of course, you can pick any five data points to tell any story you want, but I'm going to repeat this. Our Season 2 fall off is actually slightly improved this year relative to last year. So no changes in release strategies.

Spencer Wong

Thanks, Ted. The next question comes from Vikram Kesava Bodla of Baird. Last quarter, you shared that the World Baseball Classic was a significant driver of sign ups in Japan. What have you observed with respect to the retention and engagement of these members since then? How has this influence your perspective on the value of regional live programming?

Greg Peters

Yeah, you look great. Thanks for asking Our. We talked about this a lot last quarter. It was World Baseball Classic on Netflix in Japan was a huge hit. It became our most watched program ever in Japan. It was the biggest baseball streaming event ever. World Baseball Classic is kind of like these other big live events and they behave a lot like our returning seasons of our big shows. They drive disproportionate sign ups and because of that acceleration, they can exhibit slightly higher churn.

But the results are exactly consistent with that trend and in line with our expectations and all of our modeling. So we're thrilled and we're continuing to see, you know, to lean into live events because they have a big outsize positive on the business. They drive conversation, drive net acquisition. So we're going to continue to build out that global live event calendar and include expanded to include some regional live events as well.

Spencer Wong

Great. I'll now move this on to a series of questions around content strategy. We have actually 2 that are pretty similar, so I will do my best to combine them. They're from Robert Fishman. Of Moffett, Nathanson and Rich Greenfield of Light Shed Partners. First, from Robert Fishman, What is your openness to leverage Netflix's leading global scale to bundle with other streaming services like Peacock, or even consider a streaming channel store to compete with Amazon, YouTube, or Roku?

On a related point, Rich Greenfield asks, while it's only been a few weeks, the integration of TF One in France, is that integration driving higher engagement for Netflix including non TF One content? Do you think there is a meaningful opportunity for Netflix to become a distributor or platform for 3rd party streaming services around the world?

Greg Peters

I can take this one. Since the very beginning when we launched our streaming service, we've always sought to expand the entertainment offering we've got in that service. We wanted to provide more value for our members. Our members consistently tell us that they want more from us. We see that in sort of usage behavior. We see it any kind of testing or modeling we do around the space. And I would say that fulfilling on that customer desire for more has really been the driver for growth for our business for the last two decades.

This partnership with TF1 is yet just another approach to expanding that offering. We're just adding to the range of capabilities we have to do that and the mechanisms we have to do that. We built leadings to streaming entertainment service by combining an unparalleled selection of high quality programming, best in class product experience. We've got a global footprint, big reach and the ability then to deliver huge audiences, deep engagement, industry leading monetization.

So whether through licensing or through new partnerships like TF1, we believe that we can help other producers, other services maximize the value, the relevance of the content that they invest in by finding those bigger audiences. And we have many, many examples of this effect, including now in this new model with TF1. We also believe that such partnerships are good for our members. They enhance the variety of our offering. They're also effective for our business.

And it's early in the TF1 partnership. We're literally 4 weeks in. So there's a bunch that we'll learn through this process. But we are pleased with the performance we are seeing in that integration. We've been able to enhance our already compelling service for our French members with even more local French programming, programming we know that they want to watch. We've seamlessly integrated the TF1 product experience in a way where it supports their brand, but it also keeps things distinct.

And we actually think this approach is advantageous for both them and for us. And the early results from how members are reacting, how they're interacting are very promising. So we don't have anything new to announce today. We're going to continue to learn. There's a lot that we'll dig into over time. We also think that there's a lot we can improve and the product experience already that we've seen. But if we see additional deals that similarly serve our members, that work for our partner, that work for us, we'll certainly consider them.

Spencer Wong

Thanks, Greg. Robert Fishman has another question in this category. What what's the opportunity for Netflix to launch a FAST platform given the rapid engagement growth in that space? Could Netflix library program programming be used as an on ramp for new subscribers or would you be open to adding third party license content to compete with other FAST channels for incremental ad dollars?

Greg Peters

Yeah. So if you go back, you know, more than a decade when we transition from one tier one offering to sort of a set of offerings, we've been consistently seeking to expand the range of those offerings. So think about that as price and plan choices and widen the spread of those, give customers more options, more range of choice both at the lower end and also on the premium side, maintaining and increasing accessibility, especially as we expand our content offering around the world, add new customer segments. That's a critical focus and goal for us. Also optimizing long term revenue is the other big goal.

A free offering could make sense in some markets, but we have to be thoughtful about cannibalization of paid tiers. We've got to ensure that we've got the right offering, the right differentiating differentiation of that offering. It's probably also worth noting that having an effective scaled ads business in any candidate country for such an offering is clearly an important enabling factor to make those economics work. So that's all to say that free is something that we're going to continue to consider, but we have no near term plans to long term of something great.

Spencer Wong

Thanks, Greg. From next is from John Hoodlick of UBS. With the addition of video games and more recently vertical video clips and podcasts, what other content formats are interesting from a long term road map perspective and how should we gauge the success of these initiatives?

Ted Sarandos

Well, let's not get into areas that we may be exploring here and let's not pre announce anything, but I am pleased with the early progress we're making with vertical clips for choosing on mobile and certainly video podcasting. We mentioned in the letter, we announced A partnership with the publishers like. Nast and Hearst and people. So we're going to bring on some lifestyle content on the service next month. And with the podcast, we're super encouraged with the the viewing patterns that we're seeing.

They have convinced us that this viewing is definitely incremental for us. We're seeing that in daytime viewing. So we're engaging our members outside of prime time where we historically have have done most, you know, most of the engagement on Netflix. And keeping in mind since professional long form content is pretty small part of mobile, it's exciting to see that our video podcasts are out indexing on mobile for us. So it's a really great progress on both fronts.

It's really important for us to meet our members where they are with the kind of entertainment that they're trying to enjoy. So we've been building out this great lineup of podcasters include a mix of owned and licensed with creators like Martha Stewart, Kate and Oliver Hudson have a great new one. We're thrilled to have Jay Shettys On Purpose exclusively on Netflix, and our members are starting their day with The Breakfast Club. They're loving, the Official Bridgerton Podcast, Bill Simmons, Pete Davidson, Brian Williams, just to name a few.

These are examples of us continuing to evolve and deliver members more entertainment value and in more ways to engage with stuff they love. But to take a step back and kind of contextualize this, over the last 15 years, the definition of TV has broadened and our definition has changed along with it. So it's easy to forget, But if you rewind the clock to say, 2013, we had a single prestige English language scripted drama show, no unscripted, no local language, no originals, no no, no comedies, no competition shows.

And now we're the number one creator of original programming around the world. Just this week, the Emmy nominations were announced, and we have an Emmy nomination on nearly every category. We didn't even know back in that first year if House of Cards would qualify for the Emmys. There was a bunch of debate as to whether or not it was TV, so these just announced nominations, I think are a testament to the quality, the quantity and the variety of our original programming.

These expansions, though, are evolutionary, not revolutionary. This is our expansions on the same continuum that we started on years ago, adding new things as as they become available to us, as we see signals that our consumers will get value including in their Netflix subscription. That continuum, that continuum has served our members and our business really well. So we're really excited about the progress on.

Spencer Wong

Thanks, Ted. I'll ship this now to a a new topic which is monetization and I'll begin with advertising. The question is from CK Hall, also of Wells Fargo. As you look at the ad tier average revenue per membership today, what are the biggest opportunities for increasing that monetization?

Greg Peters

Yeah, maybe worth starting by noting that we manage the ads business for total revenue, total revenue growth. So those are the optimization functions. ARM and fill rate sort of come along for the ride and achieving those goals. Having said that, there's still a gap between ad tier ARM and then ARM for our standard without ads tier. That gap is narrowing. And I think of that gap is essentially near term under realized revenue growth. So it represents an opportunity for us as we improve Ads capabilities, we can close that gap or the time and you've seen us do exactly that over the last year.

How have we done it? We've expanded demand sources. We continue to execute quickly on our own ad tech stack. We're adding features, we're adding more Ads products, we're adding more measurement. We're making it easier for us for for folks to transact with us. Those all drive demand. They drive competitiveness. That yields increased fill rates. It pushes ads arm higher. Those improvements are really the bulk of the opportunity we have to improve unit performance and monetization for the next few years.

Spencer Wong

Thanks, Greg from Sean Diffley of Morgan Stanley. There's a question on pricing. Has there been a change in the reset receptivity to price hikes this cycle? And how do you think about the timing and magnitude of taking price, in other words, first quarter versus fourth quarter seasonality, which is historically a stronger?

Greg Peters

Yeah, our first half price changes, these are markets like US, Mexico, Spain, they've gone well. The results are consistent with prior price changes. They're consistent with our expectations. So we aren't seeing any real changes in that performance. And then with regard to timing and magnitude, we really go back to that top level macro question we've got of, you know, have we delivered sufficient value to our members. We're constantly looking at the signals that help us understand that question of course, plan selection, planned movement, we've got retention which is industry leading.

So we see. Improvements in value delivered start to move well in advance of making price adjustments and then we price behind that value that we are delivering. Those same signals inform all of our price change. They include the ones that we've made in the in the first half of this year and they help us determine that timing and magnitude that you're getting at. I think also I would be remiss if I didn't use this opportunity to state that I believe that we are delivering one of the best entertainment values that has ever existed.

You know, it's a comparison point if you go to the US and you take what Netflix subscribers are paying, they pay the least per hour viewing compared to comparable S mod offerings. In some cases, they would have to pay twice as much per hour for a competitive service. And our ads plan at 899 in the United States we think is an amazing entry point. It's an incredible value, highly accessible. You think about all the entertainment you get for that, it's a pretty good deal.

Spencer Wong

Thanks, Greg. The next question is from Rich Greenfield of Light Shed Partners. How should we think about reports of Netflix bringing back free trials and select markets? What provoked these tests and are there? Are they a function of increased competition, market saturation or both?

Greg Peters

Now, Rich, you know well, we are always testing, we're always assessing, trying to improve the service. That definitely includes trying to understand the best ways to bring new members into Netflix. And our investment in several product capabilities over the last several years for a variety of reasons have now given us even greater flexibility and capabilities to test different approaches and different markets, different market segments, different conditions to see how we best bring those folks on.

So for example, we've tested a low cost first month in Japan that was coincident with the World Baseball Classic that served us incredibly well. We've been testing upgrade on US options in various different countries in various different conditions around the world. And you know, as a general part of this test and learn strategy now we're testing free trials for non rejoining new members in a number of countries. And obviously we'll see how they perform and then we'll react appropriately.

Spencer Wong

Thanks, Greg. Our next question is from Vikram Kess of a Boat Love Baird. His question is Netflix has made progress on its cloud first video game strategy this year, including the addition of several new titles. How are these games performing on the platform so far? And how should we expect the video game offering to evolve going forward?

Greg Peters

Yeah, I'll start by reminding folks of the market opportunity here. This is roughly 150 billion in consumer spend X China, X Russia, doesn't include ads revenue. We've been building some solid foundations. Now we're seeing exciting positive signals that help inform and give us increased conviction in our future growth and the nature of that growth here. So you mentioned the cloud based strategy, those cloud based TV games, we really see it working. FIFA and Unhinged became our two most successful cloud game debuts, really solid numbers that put it in the top tier of game performance for us.

Another big positive sign is that since last October, so eight months ago when we really sort of scaled up this cloud initiative, monthly active players for cloud games have increased 11X and adoption is significantly ahead of that curve that we had for mobile games with even higher retention value. So we're definitely excited about that and focused on scaling up cloud games. We're also seeing positive signals with kids games. So Netflix Playground, which is our app for kids games, no ads, no in app purchases, curated set of games, very safe space.

We've seen 3X growth in daily players since that launched. That's driven more engagement in kids mobile games, which is up 600% year over year. So that's super exciting to see as well. Again, we're just getting started here. We're scratching the surface in terms of what we think the total potential of the space offers for us. You're going to see us continue to calibrate, refine our level of investment here, which is still very small relative to our overall content spend, based on demonstrated performance, based on what is working for our members and what's delivering returns to our business.

Spencer Wong

Thanks. I'll move us on now to a question from Jessica Reef Erlich of Bank of America. Given Netflix's global footprint of approximately 330 million subscription households, how do you think about leveraging that scale as a strategic asset? How does the currently consolidating media landscape impact these decisions?

Ted Sarandos

I'll take that. So you're right, Jessica, we do benefit in a number of ways from the tremendous scale that we worked so hard to build over the last 20 years. We've invested in a number of areas of the business. Look at our tech investment where we spend billions of dollars every year and as a result we have best of best in class discovery personalization, plus a bunch of great R&D and innovative, including in production, in distribution, in data. That we can draw on to constantly improve every aspect of the business on the breadth and depth of our content catalog.

These in combination all deliver this kind of flywheel of advantages. We have the biggest, most engaged audience in the world. Creators and advertisers love that we lead the industry in monetization. We have better programming ROI because we're we anmored across this global footprint and that very often that programming is very travelable. This is good for our members, it's good for our business. It creates a really healthy model for organic growth. Greg mentioned TF One earlier. I think it's being able to bring that scale to work with partners like TF One in France to bring content to our members in multiple ways and multiple business models.

I think that really helps when we could bring that distribution scale to local players. And finally, Jessica, I'd say regarding consolidation, the industry's been consolidating for over 10 years, so this isn't new. We focus all of our energy on pleasing our members and sustaining healthy growth for the business.

Spencer Wong

Thanks, Ted. Our next question comes from Sean Diffley of Morgan Stanley. What have been the early learnings from the interpositive deal and how should we think about potential cost savings and content creation? Could the impact of your $20 billion cash content budget, could this impact your $20 billion cash content budget on a go forward basis or is it more likely to be reinvested into more content and better compensating talent?

Ted Sarandos

Ted, great. Well, look, it's early days of for interpositive, but we're broadly seeing the Gen. AI is starting to have an impact across hundreds of our productions. So important to note that we have other Gen. AI tools in addition to interpositive. We're thrilled with the with all the the speed they're bringing to market for us. But we also have eye line and we have our animation lab. And what's cool is that they're all working together to drive innovation.

We said in the letter, but Gen. AI is scaling quickly across the entire creative process from concept to pre vis, through post in delivery. We're making higher quality output more quickly and efficiently than we could have using traditional methods. So Gen. AI workflows now have been used in roughly 300 of our titles with the largest concentration right to date is on post production. But we're leveraging Gen. AI, you know, for really complicated shots and sequences. We called this out in the letter, but things like enhancing crowds or historical battle scenes, those kind of things.

And we keep in mind that in many of the cases, productions would have left out those key shots because they just wouldn't have been able to afford them. They wouldn't have been able to do them in the time frames that they're working on. So those sequences are saved by the availability and access to these JII tools. On the content side, we believe it takes great artists to make something great, and AI is not changing that. AI will give creators better tools to bring their visions to life. Movies are being made by people who make movies. AI provides them with better tools to make them even better.

So today our town, you know, our talent leverages tools for things like set references and previs and VFX and sequence prep and shop planning. You know what? It's all makes the production itself so much more smooth and efficient and fast. And that's just the beginning. You know, we're seeing it across the, you know, the entire production life cycle and AI, those use cases are scaling faster and faster. So our documentary series we just released called American Experiment. That series features 17 minutes of AI enhanced footage.

It enabled us to expand the scope of the series in ways that just wouldn't have been feasible before. Those 17 minutes, Sean, they were produced twice as fast and at half the cost of previous options. So by equipping creators with these tools, we believe they're going to enhance their abilities and we are going to have better and more impact for every dollar we spend on our programming. So content creation timeline can be shortened and quality can be enhanced. So the cost savings will likely be reinvested in the more content on the service, which fuels high quality engagement and that whole kind of revenue profit flywheel that's going to come from that we've been talking about from day one.

Spencer Wong

Thanks, Ted. We have time for one last question and we'll take that from Dan Ernos of Stone X. And it's a question around capital allocation. Given recent reports around Lionsgate that Netflix has denied and broader speculation around interest in NBC Universal, how should investors think about the line between opportunistic IP and library acquisitions and larger scale M&A that could change Netflix's capital allocation or strategic profile?

Ted Sarandos

Well, if you, I'll take this, if you don't mind guys. Dan, we're not going to comment on market speculation, but I'd like to take the opportunity to remind everyone what our about our core philosophy. You know, we have multiple ways to achieve our goals, producing, licensing, partnering and we're constantly seeking ways, you know, to allocate our resources in the most attractive options to maximize value for our members and delivering for for a return for our investors. As we said, we're primarily builders, not buyers and that remains the case today.

So others will speculate about our intent to, you know, in here because they have their own reasons for that. But our track record is clear that we have a very high bar to do any big M&A. Spence, you want to add anything maybe maybe I'll I'll chime in a little bit specific to capital allocation, Ted.

Spence Newman

So thanks Dan. So look there there's, I just want to be really clear, there is no change to our capital allocation philosophy. We we invest in the business both organically and opportunistically through M&A. And again, as as Ted said, we are primarily builders, not buyers. We also maintain strong liquidity and a strong healthy balance sheet. And lastly, we return excess cash to shareholders through share repurchase. And on that last point, you can see that very clearly in Q2.

We repurchased 4.7 billion of share shares this quarter. That's our largest quarter of share repurchase in our history. And we still have about 27 billion of capacity on our remaining authorization. So we feel really good about our growth path. As Ted said, we've got a really high bar and we have no change in our capital allocation philosophy.

Spencer Wong

Great. Thank you, Spence, and thank you all for your questions and for joining us for our quarterly earnings call. And we will see you next quarter. Thank you.

Details at Netflix IR

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