Netflix's Q4 2022 report has revealed that the streaming service exceeded expectations in terms of subscriber growth, adding over 7 million subscribers. This is also the first quarter in which Netflix's new ad-supported tier is taken into account. The report shows that Netflix saw a 2% year-over-year (YoY) revenue growth during the quarter, driven by a 4% increase in average paid memberships. The company attributes its acquisition of nearly 7.7 million paid subscribers to its Q4 content slate, but it's worth noting that this total is down compared to Q4 2021's 8.3 million. Netflix's operating income for the quarter is $550 million, down from Q4 2021's $632 million.
It's interesting to note that this quarter is the first in which Netflix's ad-supported tier is incorporated, however, the company does not disclose how many subscribers were brought in through this entry-level tier, which was introduced in November at $5.99 per month. Netflix's earnings per share (EPS) for the quarter is 12 cents, compared to $1.33 in Q4 2021, which the company attributes to a $462 million non-cash unrealized loss from the F/X remeasurement on its Euro-denominated debt.
Looking ahead, Netflix projects that Q1 2023 revenue growth will fall around 4%. The company expects F/X neutral revenue growth to be driven by a combination of year-over-year growth and ARM, which it projects will translate into "modest paid net adds" for subscribers in the quarter. However, the company expects to see some "cancel reaction" due to its planned rollout of paid sharing, based on its experience in Latin America. Nevertheless, Netflix expects these borrower accounts to activate standalone services, which translates into an improved subscriber base and overall revenue
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