Netflix Inc. added more subscribers than expected in the final quarter of 2022, sending shares higher in after-hours trading Thursday even as founder Reed Hastings prepared to step down from the chief executive role he has held since the company’s inception. Netflix
announced that Hastings has moved to an executive chairman role, while Chief Operating Officer Greg Peters moves up to co-CEO, joining Ted Sarandos.
“Since Reed started to delegate management to us, Greg and I have built a strong operating model based on our shared values and like-minded approach to growth,” Sarandos said in a letter to shareholders. “I am so excited to start this new chapter with Greg as co-CEO.” In a separate letter, Hastings said “in the last 2½ years, I’ve increasingly delegated the management of Netflix” to Sarandos and Peters. “It was a baptism by fire, given COVID and recent challenges within our business. But they’ve both managed incredibly well, ensuring Netflix continues to improve and developing a clear path to reaccelerate our revenue and earnings growth,” Hastings wrote. “So the board and I believe it’s the right time to complete my succession.” The company revealed on Thursday fourth-quarter revenue of $7.85 billion, compared with $7.71 billion a year ago. Earnings were $55 million, or 12 cents a share, down from $607 million, or $1.33 a share, last year; the decline was due to a $463 million noncash charge related to debt held in Europe, executives said. Wall Street analysts tracked by FactSet had estimated revenue of $7.86 billion on earnings of 55 cents a share. Shares increased more than 6% in after-hours trading immediately following the release of the results, after closing with a 3.2% decrease at $315.78. The streaming-video company reported that it added 7.7 million subscribers in the …