Netflix added more Q4 subscribers than expected ahead of a shakeup in its executive ranks

• Netflix added more than 7 million subscribers in the fourth quarter, significantly more than expected.
• The strong growth comes as Reed Hastings announced he is stepping down as co-CEO.
• Greg Peters, the company's former COO who led its push into advertising, will take over the role. 

Netflix added 7.66 million subscribers in last year's fourth quarter, significantly more than the 4.5 million additions the company had projected three months ago. 

The stronger-than-anticipated subscriber growth comes as the company announced a shakeup in its top ranks: Netflix's co-founder Reed Hastings has stepped down as co-CEO. The company's former COO, Greg Peters, has stepped into the co-CEO role, joining Ted Sarandos, who has been co-CEO since 2020. Hastings will stay on as executive chairman.

Netflix said it is "increasingly focused on revenue as our primary top-line metric" in its Q3 report, but revenue for the fourth quarter was $7.85 billion, in line with expectations but the lowest since the company went public, according to Reuters.

Shares of Netflix wer up more than 6% in recent after-hours trading.

Following this report, Netflix will no longer provide subscriber forecasts but will continue to provide revenue guidance.

In his role as COO, Peters led the company's expansion into advertising as the company sought new revenue drivers. In November, Netflix launched its cheaper ad-supported plan, something it had previously pushed back against doing. Netflix Basic with Ads costs $6.99 per month in the US.

The company noted in the Q3 report that it didn't expect a "material contribution" in Q4 from the new ad plan and that it expected to grow the membership for the plan "gradually over time."

Even so, reports indicated that Netflix Basic with Ads was off to a slow start. The Wall Street Journal reported last month that it was Netflix's least popular plan in November, citing data from the analytics firm Antenna.

Content-wise, Netflix had a strong quarter to end the year, releasing one of its biggest TV shows in "Wednesday" and one of its most popular movies with "Glass Onion: A Knives Out Mystery."

But 2022 brought with it unique challenges. It lost subscribers in the first two quarters of the year, marking the first time the company lost members for two quarters in a row. It cut at least 500 roles in sweeping layoffs. 

The company rebounded in Q3 by adding subscribers, and executives appeared to take a victory lap during that earnings call in October by defending the company's strategies.