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Netflix (NASDAQ:NFLX) shares surged nearly 5% after-hours as the company’s global streaming paid net additions grew 7.66 million, well ahead of its 4.5M estimate, due to both strong acquisition and retention, driven primarily by the success of its Q4 content slate.
EPS came in at $0.12, worse than the consensus estimate of $0.59, while revenue was $7.85 billion (up 2% year-over-year), slightly better than the consensus estimate of $7.84B.
The company expects Q1 revenue of $8.172B (up 4% year-over-year), compared to the consensus estimate of $8.15B. EPS is expected to be $2.82, compared to the consensus estimate of $2.97.
The company expects modest positive paid net adds in Q1/23, compared to paid net adds of -0.2M in Q1/22. The fewer paid net adds in Q1/23 vs. Q4/22 is consistent with normal seasonality and factors in the company’s strong member growth in Q4/22, which likely pulled forward some growth from Q1/23.
The company expects to roll out paid sharing more broadly later in Q1/23, anticipating it to result in a very different quarterly paid net adds pattern in 2023, with paid net adds likely to be greater in Q2/23 than in Q1/23.
The company also announced that Reed Hastings stepped down as a co-CEO to take on the role of executive chairman. Greg Peters has stepped up from COO to become Ted Sarandos’ co-CEO and a member of the Netflix board.
