Netflix Inc co-founder Reed Hastings stepped down as chief executive of the company that upended Hollywood by delivering movies and TV shows online, handing the reins to longtime partner and co-CEO Ted Sarandos and chief operating officer Greg Peters.
Shares of Netflix rose 6.1% to $335.05 in after-hours trading as the streaming video pioneer also said it had picked up more subscribers than expected at the end of last year.
The company has been under pressure after losing customers in the first half of 2022. Its stock, a one-time Wall Street darling, had fallen nearly 38% in the past year.
Sarandos and Peters will share the title of chief executives, with Hastings serving as executive chairman. The change is effective immediately, representing the culmination of a decade of succession planning by the board. Both Peters and Sarandos were promoted in July 2020 amid a challenging time for the company.
“It was a baptism by fire, given Covid and recent challenges within our business,” Hastings said in a statement. “But they’ve both managed incredibly well … so the board and I believe it’s the right time to compete my succession.”
Hastings made his exit as Netflix said it added 7.66 million subscribers in the fourth quarter, beating Wall Street forecasts of 4.57 million with help from “Harry & Meghan” and “Wednesday” in the battle to attract streaming television viewers.
Earnings per share, however, came in at 12 cents, below the 45 cents expected by analysts polled by Refinitiv.
Netflix projected “modest” gains in subscribers through March. It forecast 4% year-over-year growth in revenue during the period with the help of new revenue streams.
The company is facing restrained consumer spending and competition from Walt Disney Co, Amazon.com Inc and others spending billions of dollars to make TV shows and movies for online audiences.
