CEO Reed Hastings steps down, COO Greg Peters takes on co-CEO role

Netflix (NFLX) co-CEO and co-founder Reed Hastings announced on Thursday that he will step down from his role at the helm of the company. COO Greg Peters will join current Netflix co-CEO Ted Sarandos in this role. Hastings will now serve as the company’s executive chairman.

Netflix also reported mixed financial results in the fourth quarter, with subscriber growth beating expectations, reaching 7.66 million against a forecast of 4.5 million, with adjusted earnings falling short of expectations.

Shares of Netflix rose 6% on the news.

Here are Netflix’s fourth quarter results compared to Wall Street consensus estimates, as compiled by Bloomberg:

  • Returned: $7.85 billion vs $7.86 billion expected

  • Adj. earnings per share (EPS): $0.12 against $0.58 expected

  • The subscribers: 7.66 million vs. 4.5 million net additions expected

Quarterly net additions rose by 7.66 million, above the company’s forecast of 4.5 million, as the streaming giant rolled out new initiatives such as a crackdown on password sharing and a Recently launched ad-supported tier to help support growth.

A slew of high-profile, record-breaking content releases, including “Glass Onion”, “Troll”, “All Quiet on the Western Front”, “My Name is Vendetta” and “Wednesday”, also contributed to the follower momentum.

Forecasts have proven strong with revenue guidance for the first quarter of 2023 pegged at $8.17 billion as currency headwinds begin to ease amid a weaker US dollar. As previously reported, the company did not provide guidance on subscriber growth, as “revenue is our primary measure of revenue.”

Netflix also said it expects earnings per share to hit $2.82 with free cash flow forecasts for 2023 estimated at at least $3 billion.

Netflix stock has seen a tear in recent weeks, up about 60% in the past six months with a gain of about 10% so far in January, outperforming the Nasdaq Composite’s 5% gain.

“2022 has been a tough year, with a bumpy start but a brighter end. We believe we have a clear path to re-accelerate our revenue growth: continue to improve all aspects of Netflix, launch paid sharing, and grow our advertising offer,” the company wrote. in a letter to shareholders. “As always, our northern stars continue to please our members and further increase their profitability over time.”

Investors will be watching the company’s earnings call closely for further updates regarding its new ad-supported tier, in addition to its crackdown on password sharing.

Analysts have warned investors that the impact of Netflix’s foray into advertising will take some time to be felt given the level that just launched in November.

The ad plan, dubbed “Basic with Ads,” costs $6.99 per month in the US and serves as an add-on to Netflix’s existing ad-free tiers: the Standard plan ($15.49/month) and the Basic plan. ($9.99). )

Other questions include whether or not Netflix will slow down its $17 billion content spending, in addition to the possibility that the company will embark on more mergers and acquisitions with WWE for sale.

Alexandra is a senior entertainment and media reporter at Yahoo Finance. Follow her on Twitter @alliecanal8193 and email her at alexandra.canal@yahoofinance.com

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