Netflix announced on Tuesday that it has added millions more subscribers in the fourth quarter of 2022 than Wall Street had expected, causing shares of the streaming giant to rise despite a significant earnings miss. The company also announced that co-CEO Reed Hastings would be stepping down from his position and transitioning to the post of executive chairman. Greg Peters, the company’s chief operating officer, has been promoted to co-CEO alongside the already established Ted Sarandos.
The fourth quarter results showed EPS at 12 cents compared to the 45 cents per share expected by Refinitiv, while revenue came in at $7.85 billion, in line with Refinitiv’s survey. However, the company exceeded expectations with global paid net subscribers, adding 7.66 million compared to the 4.57 million expected by StreetAccount estimates. Netflix’s EPS missed largely due to a loss related to euro-denominated debt, but its margins of 7% still topped Wall Street’s expectations.
This is the first quarter that Netflix’s new ad-supported service is included in its earnings results. The company launched this cheaper tier in November, but has not disclosed what portion of the new subscriptions are from users who have opted for this service.
During the company’s pre-recorded earnings call, Netflix said that it has seen comparable engagement from its new ad tier members as it has seen with its regular consumers. Additionally, it noted that it has not seen a significant number of people switching plans.
