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Netflix beats Q4 expectations, Reed Hastings steps down as co-CEO

Netflix now has 230.75 million customers globally, adding a further 3.2 million customers in EMEA (Europe/Middle East/Africa)

Netflix beat expectations for both revenues and subscribers in the fourth quarter of 2022, adding 7.66 million subscribers globally.

The streamer announced it made $7.852 billion in revenue during the final three months of the year, a 3.9 per cent year-over-year increase.

Netflix now has 230.75 million customers globally, adding a further 3.2 million customers in EMEA (Europe/Middle East/Africa).

The company said it is still too “early days” to talk about whether its new discounted and partially ad-supported tier helped with the strong quarter.

In its letter to shareholders, Netflix said that it accounts for nearly 8 per cent of TV viewing in the United States, a market in which streaming still overall accounts for only 40 per cent of total viewing. In comparison, in Poland streaming accounts for only 6 per cent of TV watching.

“We believe ultimately the vast majority of time spent on TV will happen via streaming, which should provide a long runway for growth as we continue to improve our service,” the company added.

Meanwhile, co-CEO Reed Hastings announced he is stepping down from his role as co-CEO but will remain as executive chairman.

Greg Peters will join Ted Sarandos as the company’s co-CEO.

The co-founder of Netflix, Hastings was the only chief executive officer the streaming company had ever had until Sarandos was moved up to co-CEO in 2020.

“Ted and I have worked together for many years — building tremendous trust and respect for each other,” said Peters. “We’re also motivated by the same goal: a desire to better serve our members so that we can continue to grow our business.”

Analyst Paolo Pescatore said that while Hastings’ decision to step down seems like a shock, timing is key. “He has been at the helm for some time and every company needs to change, move with the times,” he added. “Hastings will still be closely affiliated with the company. From a leadership perspective he has played an influential role in making Netflix a success and a driving force in streaming. The company must not lose its focus on driving innovation and disruption.”

“Expect to see a roller-coaster of year due to seasonality and uncertainty with consumer behaviour. Fundamentally, greater focus must be placed on driving revenue through new features and services.”