Netflix cofounder Reed Hastings stepped down as co-CEO after 25 years at the company’s helm, Netflix announced Thursday in its fourth quarter earnings report, after the streaming service added over 7 million subscribers in the last three months of 2022, surpassing expectations as it reported slightly increased revenue after a difficult first half of the year for the content giant.
Former COO Greg Peters will replace Hastings as co-CEO of Netflix, joining the company’s existing Co-CEO Ted Sarandos, while Hastings—a cofounder of the brand—will stay on as the brand’s Executive Chairman.
The streaming giant reported 230.75 million subscribers, an increase of 7.66 million from the third quarter—more than the 4.5 million it expected to add.
Netflix reported revenue of $7.85 billion in the fourth quarter, roughly 1.2% more than the $7.7 billion reported in the same period last year and falling in line with analyst forecasts.
Net income, meanwhile, went down from last year to $55 million, or $0.12 per share, compared to $607 million one year ago and below average analyst expectations of $0.45 per share.
Netflix shares increased nearly 5% in after-hours trading immediately after the announcement; shares have plunged 37% over the past year, far more than the tech-heavy Nasdaq’s 23% decline.
Hastings is worth an estimated $3.3 billion, according to Forbes estimates. The 62-year-old owns about 2% of Netflix, which went public in 2002. Sarandos was promoted to co-CEO in 2020.
The earnings report marks the end of one of the rockiest years in Netflix’s history. In the first quarter, it reported subscriber losses for the first time in a decade, which continued into the second quarter. The streaming giant began adding subscribers again in the third quarter, however, reversing its subscriber losses in the first half of the year. The company blamed the losses in part on households that share accounts and passwords with one another, and launched test programs in some countries to combat the issue. It’s been reported this program will roll out to the U.S. sometime this year. Netflix also launched a cheaper, ad-supported tier in November to increase its subscriber base, though Digiday reported last month the company is falling behind on viewership expectations it promised to advertisers, and the Wall Street Journal reported data showing only 9% of new Netflix users were those who signed up for the ad-supported tier in its first month. Still, Netflix shows released in 2022 saw record viewership. Five of the top 10 most viewed English-language shows in their first month on Netflix were released last year.
Hastings, 62, tweeted that he will stay on as executive chairman for “many years to come,” and he’s “so confident” in Peters and Sarandos’ leadership. “Twice the heart, double the ability to please members & accelerate growth,” Hastings wrote. He said he plans to spend “more time on philanthropy” and focus on Netflix’s stock. In a statement, Hastings compared himself to Microsoft’s Bill Gates and Amazon’s Jeff Bezos, who have passed “the CEO baton to others.”
By Marisa Dellatto, Forbes Staff