Netflix’s stock price dropped as low as $461 after the bell from an earlier peak of $534 in mid-day trading.
The news was announced in a letter to shareholders that accompanied Netflix’s second quarter earnings report posted on Thursday.
Sarandos will remain in the role of chief content officer, where he oversees the development of original programming as well as license acquisition, in addition to his new co-CEO role, Netflix said.
“Ted has been my partner for decades,” said Hastings in the letter. “This change makes formal what was already informal—that Ted and I share the leadership of Netflix.”
Boosted by the shelter in place orders prompted by the coronavirus pandemic, Netflix once again smashed its projections for subscriber growth, adding a Q2 record 10 million global paid memberships. The company had given guidance for 7.5 million addition, though it cautioned that “[g]iven the uncertainty on home confinement timing, this is mostly guesswork.” Last year, the company added just 2.7 million in the same quarter.
Some analysts had actually pegged Netflix to reach close to 15 million subscribers, close to its’ previous quarter haul of 15.8 million. Still, Netflix more than doubled its subscriber growth in the first half of this year compared to 2019, with 26 million this time around compared to 12 million last year.
“As a result, we expect less growth for the second half of 2020
compared to the prior year,” Netflix warned.
Revenues for the quarter came in at $6.15 billion, a year over year increase of 25%. That beat Wall Street consensus estimates of roughly $6.05 billion. Operating income exceeded $1 billion for a total of $1.36 billion. Earnings per share increased 2 cents from the previous quarter, coming in at $1.59, though below consensus estimates of $1.81.
This is a developing story and will be updated.