Netflix founder and co-CEO Reed Hastings announced Thursday that he would step down after more than two decades at the company.

While news of his departure comes as a shock, Hastings noted that Netflix has planned its next era of leadership “for many years” in the announcement, which was shared on the company’s blog.

In 2020, Netflix named Ted Sarandos, who has long led content efforts at the company, as co-CEO alongside Hastings. At the time, Netflix characterized the change as formalizing the way that the company was already operating.

Netflix will maintain the co-CEO structure in Hastings’ absence, promoting COO Greg Peters to the tandem role with Sarandos.

“It was a baptism by fire, given COVID and recent challenges within our business,” Hastings said of Sarandos and Peters taking the reins.

“But they’ve both managed incredibly well, ensuring Netflix continues to improve and developing a clear path to reaccelerate our revenue and earnings growth. So the board and I believe it’s the right time to complete my succession.”

Hastings will stay involved with the company as executive chairman of the board, following a precedent shared by other prominent major tech company founders, including Amazon’s Jeff Bezos and Microsoft’s Bill Gates.

The news came shortly before Netflix reported its fourth-quarter earnings. The company beat expectations in Q4, adding 7.7 million subscribers — well over the 4.5 million it anticipated. The company brought in $7.85 billion during the final quarter of 2022, extending its recent trend of slowing revenue growth.

Netflix credited the popularity of content it released in Q4 for the huge subscriber boost, including the “Addams Family” reboot “Wednesday,” the stand-alone “Knives Out” sequel “Glass Onion” and the royals documentary “Harry & Meghan.”

Like most of tech, Netflix’s stock price has fallen well short of previous pandemic highs over the last year, but the company did recover from its midyear lows of $180 a share, trading at $315 before its Q4 report hit late Thursday.

The company introduced an ad-supported subscription tier in November and Thursday’s report offered the first real glimpse into how that new product might shift the company’s fortunes now that streaming’s early pandemic boom times are over. In the report, Netflix called the launch of its lower-cost ad-supported tier a success for Q4 but noted that it had “much more still to do” around the new product.

At CES earlier this month, a Netflix ad executive noted the range of advertisers that the company has already attracted, describing that as a boon for consumers who are eager to offset their monthly costs with a Hulu-like ad-supported subscription.

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