Netflix Inc (NASDAQ:NFLX) shares rose more than 5% in after-hours trading on Thursday after the company reported mixed fourth quarter results, including subscription growth that topped expectations but earnings per share (EPS) that fell short.
Netflix also told investors that its CEO Reed Hastings, who co-founded the company in 1997, would be stepping down from the role and taking up the job of executive chairman. Greg Peters has stepped up from chief operating officer to become Ted Sarandos’ co-CEO, it said.
The streaming giant added 7.7 million new subscribers in 4Q, far exceeding the forecast 4.5 million, bringing its total number of global paid memberships to 231 million.
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It posted revenue for the quarter of $7.85 billion, in line with the consensus analyst expectation and up 1.9% from the $7.7 billion recorded in the year-ago quarter.
However, it fell short on the EPS front, reporting EPS of $0.12 for the quarter, down from $1.33 in the same quarter last year and far below the consensus expectation of $0.58.
In a letter to shareholders, Netflix noted the strong performance of new content in 4Q, with Wednesday the platform’s third most popular series ever, Harry & Meghan its second most popular documentary series, Troll its most popular non-English film, and Glass Onion: A Knives Out Mystery its fourth most popular film.
The company also noted that it was “pleased with the early results” of its new ad-supported subscription tier “Basic with Ads” which was launched in 12 countries in November.
“2022 was a tough year, with a bumpy start but a brighter finish,” the company said.
“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.”
Shortly after the release of its quarterly earnings, Netflix shares had added 5.9%, trading at about US$334.30.
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