Netflix (NFLX) founder Reed Hastings is stepping down as chief executive officer (CEO) but will remain with the company as chairman of its board of directors.
Co-CEO Ted Sarandos will remain in his current position, and Greg Peters, who had served as Netflix’s chief operating officer (COO), will be elevated to co-CEO and join the company’s board.
Hastings founded Netflix in 1997. Sarandos was promoted to co-CEO alongside Hastings in 2020. News of Hastings resignation comes as Netflix posted a big earnings miss, though its subscriber numbers beat Wall Street expectations.
Netflix added 7.66 million paid subscribers during the fourth quarter of 2022, more than the 4.57 million that Wall Street had forecast.
However, Netflix’s earnings per share (EPS) for the quarter came in at only 12 cents U.S. versus 45 cents U.S. that had been expected, according to Refinitiv data. Revenue in the quarter amounted to $7.85 billion U.S., matching analyst expectations.
Netflix’s EPS missed due to a loss related to euro-denominated debt, but its margins of 7% exceeded Wall Street’s forecasts.
Netflix highlighted new releases such as the television series “Wednesday,” the docuseries “Harry and Meghan,” and the film “Glass Onion” as popular content during the quarter.
This was also the first quarter that Netflix’s new ad-supported subscription tier was included in the company’s earnings results.
Looking ahead, Netflix said its revenue growth in the current first quarter of 2023 will rise 4%, higher than the 3.7% Wall Street had penciled in. The company said this growth will be driven by more paid memberships and more money per paid user.
Hastings tweeted that he plans to stay on as executive chairman of Netflix “for many years to come.”
The executive shake-up will also see Bela Bajaria, who previously served as Netflix’s global head of television, move into the role of chief content officer. Scott Stuber, who was head of global film, will become chairman of Netflix Film.
Netflix’s stock is down 38% over the last 12 months and trading at $315.78 U.S. per share.