As part of its quarterly earnings report, Netflix blew past expectations and revealed that it now has over 231 million paid subscribers. Netflix added 7.66 million paid subscribers in the fourth quarter, almost double the figure Wall Street expected.
Netflix reported a net income of $55 million on revenues of $7.85 billion in the quarter ending December 31, with revenues growing 1.1 percent year-over-year (YOY).
“2022 was a tough year, with a bumpy start but a brighter finish,” a Netflix letter to shareholders explains. “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. As always, our north stars remain pleasing our members and building even greater profitability over time.”
Netflix’s revenue, operating profit, and membership growth also beat the firm’s internal expectations in the quarter, and it claims to continue to lead the industry in streaming engagement, revenue and profit. This was also the first quarter in which Netflix recognized revenues from its new, lower-priced but ad-supported tier: Netflix says it is pleased with that offering and has seen little plan switching and excellent engagement.
But Netflix also warned, again, on account sharing, and noted that it will more broadly roll out its new and more expensive paid sharing plan in the current quarter. “Today’s widespread account sharing—100M+ households—undermines our long-term ability to invest in and improve Netflix, as well as build our business,” it noted. It expects some near-term pain as customers’ bills increase but says that its early experiences in a limited Latin America rollout suggest that is a temporary condition.
Finally, Netflix also revealed that founder Reed Hastings will step down as CEO and will assume a new role as executive chairman. Greg Peters will leave his previous role as COO and will become co-CEO with Ted Sarandos, the firm says.
“Ted, Greg, and I have been working closely together in different capacities for 15 years,” Mr. Hastings says. “As is common in long, effective relationships, we’ve all learned how to bring out the best in each other. I look forward to working with them in this role for many years to come.”