U.S. streaming big Netflix ended final 12 months with greater than 230 million world subscribers, it mentioned Thursday, beating analysts’ expectations as hits comparable to “Wednesday” and “Harry & Meghan” enticed new viewers.
“2022 was a tough year, with a bumpy start but a brighter finish,” the corporate mentioned in a letter saying bumper fourth-quarter earnings.
Netflix additionally introduced that co-founder Reed Hastings was standing down as CEO, ending a 25-year management that noticed the corporate develop from a rent-by-mail DVD service to an leisure juggernaut.
Hastings ceded management of Netflix to his two longtime associates Chief Operating Officer Greg Peters and Ted Sarandos, who has been the face of Netflix in Hollywood and had already been named co-CEO.
“It feels like yesterday was our IPO; we were covered in red envelopes,” Hastings mentioned throughout an earnings name.
“Hopefully, some of you have held the stock for all 21 years.”
Netflix grew to become a publicly traded firm in early 2002 at a gap worth of $15 a share.
Shares within the streaming tv service have been up almost 7% to $337.31 in after-market trades that adopted the discharge of the earnings figures.
The Netflix board has been discussing succession planning for a few years, Hastings identified in a weblog put up, joking “even founders need to evolve!”
He mentioned he would maintain the brand new job of the chief chairperson, noting this was a job that tech big founders typically take, utilizing Amazon’s Jeff Bezos and Microsoft’s Bill Gates as examples.
The altering of the guard was introduced as Netflix posted added subscribers that blew previous even probably the most optimistic expectations.
The streaming big mentioned it enticed 7.7 million new members in three months, bringing Netflix membership world wide to 230 million folks.
Netflix praised a profitable slate of latest content material that included horror-themed comedy “Wednesday,” saying the “Addams Family” spinoff was the corporate’s third hottest collection ever.
Royal tell-all documentary “Harry & Meghan” additionally scored, Netflix mentioned, in addition to “Glass Onion: A Knives Out Mystery” starring Daniel Craig.
“This is in stark contrast to the first half of the year. Creating the next biggest blockbuster drives subscribers,” mentioned tech and media analyst Paolo Pescatore.
New rivals
The recent titles helped appeal to customers to a brand new lower-priced “Basic with Ads” subscription, as shoppers in the reduction of on their leisure spending amid hovering inflation and an unsure financial system.
Revenue within the October to December interval, at $7.85 billion, was consistent with estimates.
Netflix insists that counting new customers is not a very powerful criterion for assessing the corporate’s well being and that income ought to as a substitute be the primary metric.
“What may be getting lost in the mix is that some number of new subscribers – we don’t know how many – likely came in on Netflix’s ad-supported tier,” mentioned Insider Intelligence principal analyst Paul Verna.
“That means, most likely, lower average revenue per subscriber, which is a measure Wall Street will be paying more attention to as Netflix’s ad businesses scales up,” he mentioned.
Netflix’s objectives this 12 months embody “nudging” viewers who use passwords shared by subscribers to pay their very own means.
“We have high confidence in our ability to accelerate revenue throughout the course of the year as we scale ads and we launch paid sharing (of accounts),” mentioned Netflix chief monetary officer Spencer Neumann.
Netflix faces sturdy competitors from deep-pocketed rivals, together with Disney+, which has additionally launched an ad-based subscription.
But regardless of the challenges, Netflix is among the uncommon tech giants to have garnered confidence from Wall Street with its share worth up nearly 50% prior to now six months.
Other tech giants and Disney have been hammered on the markets as corporations lay off staff and lower prices after an enormous hiring and spending spree on the peak of the coronavirus pandemic.
