Netflix Posts Strong Subscriber Growth to End 2022; Hastings Transitioning to Chairman Role

Netflix continued its rebound from a weak first half, ending 2022 by adding 7.66 million net subscribers, well ahead of guidance of 4.5 million. The firm expects to rollout its effort to crack down on password sharing in the first quarter as it looks for more revenue-boosting initiatives. While the firm didn’t provide any specifics, we expect the program to look broadly like the tests run in Latin America. The pilot programs offered subscribers the ability to add additional users for a charge roughly equal to 20% of the plan cost which implies around $3 per month in the U.S. While we think this plan will boost revenue, we don’t believe it will significantly increase new subscriber growth from users not added on to existing plans and could increase churn.