ALBAWABA — Reed Hastings, the co-founder and CEO of Netflix for 25 years, announced on the company’s blog that he was stepping down as part of a planned next era of leadership by the Netflix Board, as its subscriber base outpaced forecasts.
Hastings will stay on as executive chairman of the board, following a precedent shared by other prominent tech founders, including Amazon’s Jeff Bezos and Microsoft’s Bill Gates.
The change in leadership comes as Netflix has seen a decline of more than a third of its market value in the past year, following the realization that the company’s period of fast growth has tapered off.
Greg Peters, the Chief Operating Officer, was promoted to the role of co-CEO alongside Ted Sarandos, who was promoted to co-CEO in 2020.
Sarandos and Peters will be responsible for steering the company in a different direction and leading it through a more challenging period for the entertainment industry.
“It was a baptism by fire, given COVID and recent challenges within our business,” Hastings said of Sarandos and Peters taking the helm.
“But they’ve both managed incredibly well, ensuring Netflix continues to improve and developing a clear path to reaccelerate our revenue and earnings growth. So the board and I believe it’s the right time to complete my succession,” added Hastings.
The news came shortly before Netflix reported its fourth-quarter earnings. The company beat expectations in the fourth quarter of 2022, adding 7.7 million subscribers — well over the 4.5 million it anticipated, bringing in $7.85 billion but extending its recent trend of slowing revenue growth.
Netflix had more than 230 million global subscribers at the end of last year, representing a 4 percent year-over-year growth, it said Thursday, beating analysts' expectations.
"2022 was a tough year, with a bumpy start but a brighter finish," the company said in a letter announcing bumper fourth quarter earnings — $32 billion revenue, alongside $5.6 billion in operating income, $2 billion of net cash from operating activities and $1.6 billion of free cash flow.
Netflix which became a publicly traded company in early 2002, at an opening price of $15 a share, saw its share price jump nearly 7 percent to $337.31 in after-market trading after the release of its earnings figures.
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