Reed Hastings, a co-founder of Netflix Inc., is stepping down as CEO of the business he has run for more than 20 years, handing the reins to two of his close friends, Ted Sarandos and Greg Peters.

The company’s public face in Hollywood is Sarandos, who was already co-CEO, while Peters, who was formerly chief operating officer, has been in charge of its product development and drive into advertising. Hastings, 62, will lead the business as executive chairman.

“Our board has been discussing succession planning for many years (even founders need to evolve!),” Hastings said in a blog post. “The board and I believe it’s the right time to complete my succession.”

Doug Anmuth, an analyst at JPMorgan Chase, said in a research note that he expects a “seamless transition to new leadership and for Hastings to “remain very close to the company in terms of strategy & important product decisions.

Netflix ended the year on a high note. The company added 7.66 million subscribers in the final quarter of 2022, easily topping the 4.5 million average estimate of Wall Street analysts. Revenue, at $7.85 billion, was in line with estimates. Although its earnings, at 12 cents per share, fell well below the same period a year ago, the company forecast that its profit margin and free cash flow would improve in the year ahead.

The stock rose about 7 percent in premarket trading Friday at 8:12 a.m. New York time. Shares of Paramount Global, Walt Disney Co. and Warner Bros. Discovery also rose at least 1 percent, although some on Wall Street cautioned about extrapolating broader trends for streaming services.

“Netflix’s impressive cost discipline has helped protect margins and cash flow” and “even improve the return on its spending,” Morgan Stanley analyst Benjamin Swinburne wrote in a research note. “This offers hope for investors throughout the streaming industry, although just because Netflix has delivered streaming cash flows does not guarantee its competitors will.”

Sarandos and Peters must guide Netflix through a turbulent time in the media industry. The company just reported its slowest year of subscriber growth since 2011, the year it split its streaming business from its DVD-by-mail service.

Shares in the company lost half of their value last year, while its growing frugality alienated some of the creative people who once hailed Netflix as a champion of the arts.

The programming slate was one of Netflix’s strongest, however. The company released its third most popular TV show ever with Wednesday, its most popular foreign-language movie with Troll and its fourth most popular movie ever, Glass Onion. Its programming accounted for more than 80 percent of the 10 most-watched streaming titles every week during the quarter, according to Nielsen.

Hastings has been signaling he would step aside for a few years. He elevated Sarandos to co-CEO in 2020 and named Peters COO at the same time. He already delegated almost all Hollywood decisions to Sarandos, and has gradually pulled back from the day-to-day affairs of the business.

“There’s no big strategy shift or big culture shifts,” Peters said during an interview with analyst Jessica Reif Ehrlich after the earnings were released. “We don’t have a bank of changes that we have been holding for this moment.”