Exhibit 99.1

FOR IMMEDIATE RELEASE	IR CONTACT:	Deborah Crawford
Monday, January 24, 2005		Director of Investor Relations
		408 317-3712
	PR CONTACT:	Shernaz Daver
		408 317-3723

Netflix Announces Q4 Results

2.6 million Subscribers, Churn of 4.4%,

Revenue of $144 million, GAAP Net Income of $4.8 million

Los Gatos, Calif. – January 24, 2005 – Netflix (Nasdaq: NFLX) today reported results for the fourth quarter and year ended December 31, 2004.

For the fourth quarter:

• Revenue increased 77 percent year over year to $143.9 million

• GAAP net income was $4.8 million representing a 112 percent year over year increase. Net income in the U.S. was $7.8 million. The U.K. net loss was $3.0 million.

• Free cash flow was $5.4 million and GAAP net cash provided by operating activities was $32.5 million

“2004 was a spectacular year for Netflix. We delivered strong revenue and earnings. We grew to more than 2.6 million subscribers, and we achieved our lowest churn ever in the fourth quarter, despite intense competition,” said Reed Hastings, co-founder and CEO of Netflix. ”We do online DVD rental better than anyone on the planet, and we continue to enhance our service everyday with innovative features like Friends and Profiles.”

“In 2005, you can expect us to maintain rapid subscriber growth and our category leadership position,” Hastings said.

Fourth Quarter and Fiscal Year 2004 Financial Highlights

Revenue for the fourth quarter was a record $143.9 million, representing 77 percent year over year growth from $81.2 million, and 2 percent quarter over quarter growth from $141.6 million. Revenue growth slowed sequentially as a result of the November 1, 2004 price reduction. Revenue for fiscal 2004 was $506.2 million, up 86 percent from $272.2 million for fiscal 2003.

GAAP net income for the fourth quarter was $4.8 million, or $0.08 per diluted share, compared to GAAP net income of $2.3 million, or $0.04 per diluted share, for the fourth quarter of 2003 and GAAP net income of $18.9 million, or $0.29 per diluted share, for the third quarter of 2004. GAAP net income included net income of $7.8 million in the U.S. and a net loss of $3.0 million for the U.K.

GAAP net income for fiscal 2004 was $20.8 million, or $0.32 per diluted share, compared to GAAP net income of $6.5 million, or $0.10 per diluted share, for fiscal 2003. GAAP net income included net income of $25.4 million in the U.S. and a net loss of $4.6 million for the U.K.

Non-GAAP net income was $9.2 million, or $0.14 per diluted share, for the fourth quarter of 2004 compared to non-GAAP net income of $6.1 million, or $0.09 per diluted share for the fourth quarter of 2003 and non-GAAP net income of $22.6 million, or $0.35 per diluted share, for the third quarter of 2004. Non-GAAP net income included non-GAAP net income of $12.2 million in the U.S. and a non-GAAP net loss of $3.0 million for the U.K.

Non-GAAP net income was $37.4 million, or $0.58 per diluted share, for fiscal 2004 compared to non-GAAP net income of $17.2 million, or $0.27 per diluted share for fiscal 2003. Non-GAAP net income included non-GAAP net income of $42.0 million in the U.S. and a non-GAAP net loss of $4.6 million for the U.K. Non-GAAP net income equals net income on a GAAP basis before stock-based compensation expense.

Free cash flow¹ for the fourth quarter 2004 was $5.4 million, compared to $9.2 million in the fourth quarter of 2003 and was $14.1 million for the third quarter of 2004. Free cash flow for fiscal 2004 was $34.8 million or 6.9 percent of revenue, up 30 percent from $26.8 million in fiscal 2003.

Cash provided by operating activities for the fourth quarter of 2004 was $32.5 million, compared to $31.4 million for the fourth quarter of 2003 and $49.3 million for the third quarter of 2004. Cash provided by operating activities for fiscal 2004 was $147.6 million, compared to $89.8 million for fiscal 2003.

Subscribers. Netflix ended the fourth quarter 2004 with approximately 2,610,000 total subscribers, representing 76 percent year over year growth from 1,487,000 total subscribers at the end of the fourth quarter of 2003. During the quarter Netflix acquired 783,000 gross subscriber additions, representing 76 percent year over year growth from 444,000 gross subscriber additions acquired in the fourth quarter of 2003 and 33 percent quarter over quarter growth from 590,000 gross subscriber additions acquired in the third quarter of 2004.

Of the 2,610,000 total subscribers at quarter end, 95 percent or 2,486,000 were paid subscribers. The other 5 percent, or 124,000, were free subscribers. Paid subscribers represented 95 percent of total subscribers at the end of the fourth quarter of 2003 and 96 percent of total subscribers at the end of the third quarter of 2004.

Household penetration in the San Francisco Bay Area rose to 9.0 percent of households at the end of the fourth quarter of 2004, up from 5.9 percent at the end of the fourth quarter of 2003 and up from 8.1 percent at the end of the third quarter of 2004. Household penetration in the rest of the country reached 2.3 percent at the end of the fourth quarter of 2004, up from 1.3 percent at the end of the fourth quarter of 2003 and up from 1.9 percent at the end of the third quarter of 2004.

SAC for U.S. operations for the fourth quarter was $35.61 per gross subscriber addition compared to $32.89 for the same period of 2003 and $36.97 for the third quarter of 2004. SAC for U.S. operations for fiscal 2004 was $35.66 per gross subscriber addition compared to $31.79 for fiscal 2003.

Churn² for the fourth quarter of 2004 reached a record low of 4.4 percent, compared to 4.8 percent for the fourth quarter of 2003 and 5.6 percent for the third quarter of 2004. Churn

¹ Free cash flow is defined as cash provided by operating activities less cash provided by (used in) investing activities after excluding purchases and sales of short-term investments.

² Churn is defined as customer cancellations in the quarter divided by the sum of beginning subscribers and gross subscriber additions, divided by three months.

includes free subscribers as well as paying subscribers who elect not to renew their monthly subscription service during the quarter.

Gross margin for the fourth quarter was 45.5 percent compared to 45.2 percent for the fourth quarter of 2003 and 49.5 percent for the third quarter of 2004.

Business Outlook

The Company’s performance expectations for the first quarter of 2005 and the full year of 2005 are as follows:

First Quarter 2005

• Ending subscribers of 2.85 million to 3.05 million

• Revenue of $149 million to $154 million

• GAAP net loss of $16 million to $19 million

Full Year 2005

• Ending subscribers of 3.85 million to 4.15 million

• Revenue of $700 million to $730 million

• GAAP net loss of $5 million to $15 million

Float and Trading Plans

The Company estimates the public float at approximately 45,543,522 shares as of December 31, 2004, up 1 percent from 45,059,814 shares as of September 30, 2004, based on registered shares held in street name with the Depository Trust and Clearing Corporation. No outstanding shares are subject to a lock-up agreement of any kind. From time to time executive officers of Netflix may elect to buy or sell stock in Netflix. All open market sales are made pursuant to the terms of 10b5-1 Trading Plans approved by the Company and generally adopted no less than three months prior to the first date of sale under such plan.

Earnings Call

The Netflix earnings call will be webcast today at 5:00 p.m. Eastern Time / 2:00 p.m. Pacific Time, and may be accessed at http://ir.netflix.com. Following the conclusion of the webcast, a replay of the call will be available via Netflix’s website at http://ir.netflix.com. For those without access to the Internet, a replay of the call will be available from approximately 5:00 p.m. Pacific Time on January 24, 2005 through January 31, 2005. To listen to a replay, call (719) 457-0820, access code 622676. The Company also plans to include discussion of its business outlook in the conference call.

Use of Non-GAAP Measures

Management believes that non-GAAP net income is a useful measure of operating performance because it excludes the non-cash impact of stock option accounting. In addition, management believes that free cash flow is a useful measure of liquidity because it excludes the non-operational cash flows from purchases and sales of short-term investments and cash flows from financing activities. However, these non-GAAP measures should be considered in addition to, not as a substitute for, or superior to net income and net cash provided by operating activities, or other financial measures prepared in accordance with GAAP. A reconciliation to the GAAP equivalents of these non-GAAP measures is contained in tabular form on the attached unaudited financial statements.

About Netflix

Netflix (Nasdaq: NFLX) is the world’s largest online movie rental service, providing more than two million subscribers access to over 30,000 DVD titles. For $17.99 a month, Netflix subscribers rent as many DVDs as they want, and keep them as long as they want, with three movies out at a time. There are no due dates, no late fees and no shipping fees. DVDs are delivered for free by first-class mail from regional shipping centers located throughout the United States. Netflix can reach more than 85 percent of its subscribers with generally one business-day delivery. The company provides subscribers extensive information about DVD movies, including critic reviews, member reviews, online trailers, ratings, and personalized movie recommendations. For more information, visit www.netflix.com.

Forward-Looking Statements

This press release contains certain forward-looking statements within the meaning of the federal securities laws, including statements regarding our subscriber growth, revenue and GAAP net income for the first quarter and full year of 2005. The forward-looking statements in this release are subject to risks and uncertainties that could cause actual results and events to differ, including, without limitation: impacts arising out of competition, our ability to manage our growth, in particular managing our subscriber acquisition cost as well as the mix between revenue sharing titles and titles not subject to revenue sharing that are delivered to our subscribers; our ability to attract new subscribers and retain existing subscribers; changes in pricing and availability for advertising space; fluctuations in consumer usage of our service, customer spending on DVD players, DVDs and related products; disruption in service on our website or with our computer systems; deterioration of the U.S. economy or conditions specific to online commerce or the filmed entertainment industry; conditions that effect our delivery through the U.S. Postal Service, including increases in first class postage; increases in the costs of acquiring DVDs; and, widespread consumer adoption of different modes of viewing in-home filmed entertainment. A detailed discussion of these and other risks and uncertainties that could cause actual results and events to differ materially from such forward-looking statements is included in our filings with the Securities and Exchange Commission, including our Annual Report on Form 10-K filed with the SEC on February 27, 2004. We undertake no obligation to update forward-looking statements to reflect events or circumstances occurring after the date of this press release.

Netflix, Inc.

Consolidated Statements of Operations

(unaudited)

(in thousands, except per share data)

	Three Months Ended									Year Ended
	December 31, 2003			September 30, 2004			December 31, 2004			December 31, 2003			December 31, 2004
Revenues:
Subscription	$	80,780		$	140,414		$	140,664		$	270,410		$	500,611
Sales		405			1,230			3,229			1,833			5,617
Total revenues		81,185			141,644			143,893			272,243			506,228
Cost of revenues:
Subscription		44,334			71,130			76,223			147,736			273,401
Sales		130			471			2,219			624			3,057
Total cost of revenues		44,464			71,601			78,442			148,360			276,458
Gross profit		36,721			70,043			65,451			123,883			229,770
Operating expenses:
Fulfillment		9,348			15,013			16,433			31,274			56,609
Technology and development		4,840			6,325			5,890			17,884			22,906
Marketing		14,602			22,525			29,089			49,949			98,784
General and administrative		2,566			4,122			5,749			9,585			16,287
Stock-based compensation		3,832			3,660			4,358			10,719			16,587
Total operating expenses		35,188			51,645			61,519			119,411			211,173
Operating income		1,533			18,398			3,932			4,472			18,597
Other income (expense):
Interest and other income		782			579			1,118			2,457			2,592
Interest and other expense		(44	)		(52	)		(57	)		(417	)		(170	)
Net income before income taxes		2,271			18,925			4,993			6,512			21,019
Provision for income taxes		—			—			181			—			181
Net income	$	2,271		$	18,925		$	4,812		$	6,512		$	20,838
Net income per share:
Basic	$	.05		$	.36		$	.09		$	.14		$	.40
Diluted	$	.04		$	.29		$	.08		$	.10		$	.32
Weighted average common shares outstanding:
Basic		50,154			52,211			52,553			47,786			51,988
Diluted		64,282			64,449			63,702			62,884			64,713
Reconciliation of Non-GAAP Financial Measures
(Unaudited)
Non-GAAP net income reconciliation:
Net income	$	2,271		$	18,925		$	4,812		$	6,512		$	20,838
Add back:											—			—
Stock-based compensation		3,832			3,660			4,358			10,719			16,587
Non-GAAP net income	$	6,103		$	22,585		$	9,170		$	17,231		$	37,425
Non-GAAP net income per share:
Basic	$	.12		$	.43		$	.17		$	.36		$	.72
Diluted	$	.09		$	.35		$	.14		$	.27		$	.58

Netflix, Inc.

Consolidated Balance Sheets

(unaudited)

(in thousands, except share and par value data)

	As of
	December 31, 2003			December 31, 2004
Assets
Current assets:
Cash and cash equivalents	$	89,894		$	174,461
Short-term investments		45,297			—
Prepaid expenses		2,231			2,741
Prepaid revenue sharing expenses		905			4,695
Other current assets		619			4,692
Total current assets		138,946			186,589
DVD library, net		22,238			42,158
Intangible assets, net		2,948			961
Property and equipment, net		9,772			18,728
Deposits		1,272			1,600
Other assets		836			1,000
Total assets	$	176,012		$	251,036
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	32,654		$	49,775
Accrued expenses		11,625			13,131
Deferred revenue		18,324			31,936
Current portion of capital lease obligations		416			68
Total current liabilities		63,019			94,910
Deferred rent		241			600
Capital lease obligations, less current portion		44			—
Total liabilities		63,304			95,510
Stockholders’ equity:
Common stock, $0.001 par value; 80,000,000 and 160,000,000 shares authorized at December 31, 2003 and December 31, 2004, respectively; 50,849,370 and 52,732,025 issued and outstanding at December 31, 2003 and December 31, 2004, respectively		51			53
Additional paid-in capital		270,836			292,843
Deferred stock-based compensation		(5,482	)		(4,693	)
Accumulated other comprehensive income (loss)		596			(222	)
Accumulated deficit		(153,293	)		(132,455	)
Total stockholders’ equity		112,708			155,526
Total liabilities and stockholders’ equity	$	176,012		$	251,036

Netflix, Inc.

Consolidated Statements of Cash Flows

(unaudited)

(in thousands)

	Three Months Ended									Year Ended
	December 31, 2003			September 30, 2004			December 31, 2004			December 31, 2003			December 31, 2004
Cash flows from operating activities:
Net income	$	2,271		$	18,925		$	4,812		$	6,512		$	20,838
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation of property and equipment		1,129			1,569			1,727			4,720			5,871
Amortization of DVD library		14,790			20,450			20,628			43,125			80,346
Amortization of intangible assets		756			453			454			3,146			1,987
Stock-based compensation expense		3,832			3,660			4,358			10,719			16,587
Stock option income tax benefits		—			—			176			—			176
Loss on disposal of property and equipment		—			—			135			—			135
Loss on disposal of short-term investments		—			—			—			—			274
Gain on disposal of DVDs		(275	)		(941	)		(1,180	)		(1,604	)		(2,912	)
Noncash interest expense		19			11			11			103			44
Changes in operating assets and liabilities:
Prepaid expenses and other current assets		(560	)		(3,478	)		(3,373	)		(290	)		(8,373	)
Accounts payable		4,195			5,116			2,107			12,304			17,121
Accrued expenses		671			1,988			(2,709	)		2,523			1,506
Deferred revenue		4,553			1,407			5,278			8,581			13,612
Deferred rent		(22	)		108			113			(47	)		359
Net cash provided by operating activities		31,359			49,268			32,537			89,792			147,571
Cash flows from investing activities:
Purchases of short-term investments		(582	)		—			—			(1,679	)		(586	)
Proceeds from sale of short-term investments		—			—			—			—			45,013
Purchases of property and equipment		(4,315	)		(4,165	)		(6,941	)		(8,872	)		(14,962	)
Acquisitions of DVD library		(18,717	)		(31,986	)		(23,332	)		(55,620	)		(102,971	)
Proceeds from sale of DVDs		405			1,230			3,229			1,833			5,617
Deposits and other assets		423			(206	)		(99	)		(339	)		(492	)
Net cash used in investing activities		(22,786	)		(35,127	)		(27,143	)		(64,677	)		(68,381	)
Cash flows from financing activities:
Proceeds from issuance of common stock		2,266			373			1,538			6,299			6,035
Principal payments on notes payable and capital lease obligations		(115	)		(100	)		(107	)		(1,334	)		(436	)
Net cash provided by financing activities		2,151			273			1,431			4,965			5,599
Effect of exchange rate changes on cash and cash equivalents		—			(44	)		(178	)		—			(222	)
Net increase in cash and cash equivalents		10,724			14,370			6,647			30,080			84,567
Cash and cash equivalents, beginning of period		79,170			153,444			167,814			59,814			89,894
Cash and cash equivalents, end of period	$	89,894		$	167,814		$	174,461		$	89,894		$	174,461
Non-GAAP free cash flow reconciliation:
Net cash provided by operating activities	$	31,359		$	49,268		$	32,537		$	89,792		$	147,571
Purchases of property and equipment		(4,315	)		(4,165	)		(6,941	)		(8,872	)		(14,962	)
Acquisitions of DVD library		(18,717	)		(31,986	)		(23,332	)		(55,620	)		(102,971	)
Proceeds from sale of DVDs		405			1,230			3,229			1,833			5,617
Deposits and other assets		423			(206	)		(99	)		(339	)		(492	)
Non-GAAP free cash flow	$	9,155		$	14,141		$	5,394		$	26,794		$	34,763

Netflix, Inc.

Consolidated Other Data

(unaudited)

(in thousands, except percentages and subscriber acquisition cost)

	As of / Three Months Ended									As of / Year Ended
	December 31, 2003			September 30, 2004			December 31, 2004			December 31, 2003			December 31, 2004
Subscriber information:
Subscribers: beginning of period		1,291			2,093			2,229			857			1,487
Gross subscriber additions: during period		444			590			783			1,571			2,716
Gross subscriber additions year-to-year change		41.0	%		54.0	%		76.4	%		37.8	%		72.9	%
Gross subscriber additions quarter-to-quarter sequential change		15.9	%		1.2	%		32.7	%
Less subscriber cancellations : during period		(248	)		(454	)		(402	)		(941	)		(1,593	)
Subscribers: end of period		1,487			2,229			2,610			1,487			2,610
Subscribers year-to-year change		73.5	%		72.7	%		75.5	%		73.5	%		75.5	%
Subscribers quarter-to-quarter sequential change		15.2	%		6.5	%		17.1	%
Free subscribers: end of period		71			94			124			71			124
Free subscribers as percentage of ending subscribers		4.8	%		4.2	%		4.8	%		4.8	%		4.8	%
Paid subscribers: end of period		1,416			2,135			2,486			1,416			2,486
Paid subscribers year-to-year change		77.9	%		71.9	%		75.6	%		77.9	%		75.6	%
Paid subscribers quarter-to-quarter sequential change		14.0	%		5.5	%		16.4	%
Churn		4.8	%		5.6	%		4.4	%
Subscriber acquisition cost - Consolidated	$	32.89		$	38.18		$	37.15		$	31.79		$	36.37
Subscriber acquisition cost - U.S.	$	32.89		$	36.97		$	35.61		$	31.79		$	35.66
Margins:
Gross margin		45.2	%		49.5	%		45.5	%		45.5	%		45.4	%
Operating margin		1.9	%		13.0	%		2.7	%		1.6	%		3.7	%
Net margin		2.8	%		13.4	%		3.3	%		2.4	%		4.1	%
Expenses as percentage of revenues:
Fulfillment		11.5	%		10.6	%		11.4	%		11.5	%		11.2	%
Technology and development		6.0	%		4.5	%		4.1	%		6.6	%		4.5	%
Marketing		18.0	%		15.9	%		20.2	%		18.3	%		19.5	%
General and administrative		3.2	%		2.9	%		4.0	%		3.5	%		3.2	%
Operating expenses before stock-based compensation		38.6	%		33.9	%		39.7	%		39.9	%		38.4	%
Stock-based compensation		4.7	%		2.6	%		3.0	%		3.9	%		3.3	%
Total operating expenses		43.3	%		36.5	%		42.7	%		43.8	%		41.7	%
Year-to-year change:
Total revenues		79.7	%		96.2	%		77.2	%		78.2	%		85.9	%
Fulfillment		71.6	%		80.4	%		75.8	%		61.5	%		81.0	%
Technology and development		22.2	%		33.5	%		21.7	%		22.3	%		28.1	%
Marketing		39.2	%		84.9	%		99.2	%		39.6	%		97.8	%
General and administrative		33.6	%		53.9	%		124.0	%		42.3	%		69.9	%
Operating expenses before stock-based compensation		43.7	%		71.9	%		82.3	%		42.1	%		79.0	%
Stock-based compensation		41.0	%		31.8	%		13.7	%		21.4	%		54.7	%
Total operating expenses		43.4	%		68.2	%		74.8	%		39.9	%		76.8	%