Netflix successfully exceeded analyst estimates when it came to its performance for the winter quarter. For the period October-December 2022, the streaming giant added 7.66 million paid subscribers on the backs of successful shows such as “Wednesday” and “Harry & Meghan.”
To coincide with this news, Netflix co-founder will be ending his two-decade-long run at the top of the streaming service by stepping down from his role as co-CEO. Hastings’ leadership saw Netflix grow to one of the biggest names in the streaming service segment with an international reach.
With Hastings stepping down from his role, the mantle will be taken up by Greg Peters, who served as the Chief Operating Officer of Netflix. Peters will now lead Netflix alongside Ted Sarandos, who has been co-CEO since July 2020. Hastings will not sever his ties with Netflix, and will now serve as Executive Chairman of the streaming behemoth – Hastings noted that this was a role that tech giant founders often take and cited Amazon’s Jeff Bezos and Microsoft’s Bill Gates as examples. He will also put a greater focus and spend more time on philanthropy, according to an official blog post. The post added that Bela Bajaria will, going forward, serve as the Chief Content Officer of Netflix, while Scott Stuber will be the Chairman of Netflix Film.
“We start 2023 with renewed momentum as a company and a clear path to reaccelerate our growth. I’m thrilled about Ted and Greg’s leadership, and their ability to make the next 25 years even better than the first,” Hastings said in the blog post.
The change in its top leadership comes amidst a successful day for Netflix, which fuelled a rise in its shares after the bell (Netflix shares are currently priced at $315.78 per share). The streaming giant, on the back of successful shows, added millions of subscribers in the winter quarter to end an otherwise-tough year on a high note. With an additional 7.7 million new members added in the fourth quarter of the year, Netflix brings its global subscriber base to nearly 231 million. Netflix even called “Wednesday” – the “Addams Family” spinoff – as the company’s third most popular series ever.
Coming to its financials, we find the revenue in the final quarter to be in line with Wall Street estimates – $7.85 billion – and clocked an annual growth of 1.9%. Its earnings per share (EPS) were well short of the 45 cents/share that was expected by Wall Street. Its EPS for the quarter amounted to 12 cents/share. Its operating income for the period amounted to $550 million, while its net income clocked an annual decrease to $55 million.
“We wouldn’t be getting into this business if it couldn’t be a meaningful portion of our business,” said Spencer Neumann, the company’s chief financial officer, during the earnings call. “We’re over $30 billion in revenue, almost $32 billion in revenue, in 2022 and we wouldn’t get into a business like this if we didn’t believe it could be bigger than at least 10% of our revenue.” This is also the first quarter that Netflix’s new ad-supported service has been included in its earnings results, although it will refrain from providing subscriber guidance in the future.
“We believe we have a clear path to reaccelerate our revenue growth: continuing to improve all aspects of Netflix, launching paid sharing, and building our ads offering. As always, our north stars remain pleasing our members and building even greater profitability over time,” the company said, further predicting revenue growth of 4% in the first quarter of 2023.