As Netflix sees it, “2022 was a tough year, with a bumpy start but a brighter finish.”
What will come in 2023 for the OTT giant will now be under the day-to-day purview of co-CEOs Ted Sarandos and Greg Peters.
That’s because Reed Hastings is going by the titles of founder and Executive Chairman. And, that seems to be positive news for investors, as Netflix was up sharply in immediate after-hours trading on Thursday.
The shift in the top leadership at Netflix was shared subtly, with a simple note indicating the new titles of the three executives, who were poised to sit alongside Chief Financial Officer Spence Neumann and VP of Investor Relations and Corporate Development Spencer Wang at 6pm Eastern for an interview in which they’ll discuss the Q4 and full-year 2022 earnings report.
Moderating the conversation: longtime Wall Street financial analyst for media Jessica Reif Ehrlich, of BofA Securities.
Peters ascends from Chief Operating Officer and Chief Product Officer; Sarandos became co-CEO in July 2022.
Sarandos commented on the leadership evolution, thanking Hastings “for his visionary leadership, mentorship and friendship over the last 20 years. We’ve all learned so much from his intellectual rigor, honesty and willingness to take big bets and we look forward to working with him for many more years to come. Since Reed started to delegate management to us, Greg and I have built a strong operating model based on our shared values and like-minded approach to growth. I am so excited to start this new chapter with Greg as co-CEO.”
Meanwhile, Bela Bajaria, formerly Head of Global TV, has become Chief Content Officer and Scott Stuber has become Chairman of Netflix Film. Sarandos said of them, “Bela and Scott are outstanding creative executives with proven track records at Netflix. In 2022 we premiered many of our most popular series and films in Netflix history — a testament to their leadership and creativity. I couldn’t be more excited to work alongside them as we seek to delight audiences for years to come.”
With Hastings’ “succession process” now complete, Netflix believes it is on “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.”
But what about the Q4 and full-year 2022 fiscal report card?
Profit for the final three months of last year saw revenue, operating profit and membership growth exceed Netflix’s forecast. “We continue to lead the industry in streaming engagement, revenue and profit,” the company noted in a shareholder letter.
Wednesday became Netflix’s third-most popular series ever, while Glass Onion: A Knives Out Mystery was its fourth-biggest exclusive feature film to be released.
While revenue was up, operating income decreased year-over-year. As such, net income slid to $55 million ($0.12 per diluted share) from $607 million ($1.33).
Furthermore, the Q1 2023 forecast calls for some of Netflix’s biggest quarterly revenue yet. However, year-over-year net income will be down.
While the financial outlook is mixed for Netflix, NFLX, which trades on the Nasdaq GlobalSelect market, was up 6.1% to $335.08 in after-hours trading as of 4:45pm Eastern after finishing the day down 3.2%.
The short-term, mid-term and long-term performance outlook for Netflix remains positive, with a 1-year target price of $318.11 reflecting softer pricing than what is being seen today.
To view the Netflix shareholder letter in full, please click here:
FINAL-Q4-22-Shareholder-Letter
