The streaming giant Netflix added 4.38 million subs in the third quarter of 2021, well ahead of the consensus of 3.60 million. Netflix also guided 8.5 million net adds in the fourth quarter, which doesn't seem like an aggressive target to beat in our opinions given its entering "uncharted territory" of content release. The cash spending on content came in at $4.7 billion, a 55% YoY increase, as Netflix ramped up production globally. Netflix's long-term thesis remains unchanged for three reasons:

• A long runway for penetration, especially in LATAM (39M subs) and APAC (30M subs).

• Ability to raise price consistently. The streaming ARPU is still materially lower than the cable TV services in US and EU.

• Returning capital to shareholders, as the FCF is about to grow significantly over the next few years.

During the earnings call, the management discussed extensively on their mobile gaming venture. Netflix has historically been the most "focused" tech company: it axed data centers, put all resources in AWS in early 2010, and entered the original series in 2013 and original movies in 2017. These moves were very controversial back then, but all turned out highly successful later on. As Netflix starts entering gaming, we don't have many reasons to doubt it could become the leader in Metaverse or AR/VR games.

"We're an uncharted territory, and we have so much content coming in Q4 like we've never had." -- Ted Sarandos, Netflix Co-CEO

"...and maybe imagine three years from now and some future Squid Game is launching, and it comes along with an incredible array of interactive gaming options, and it's all built into the service." -- Reed Hastings