Netflix Inc NFLX outgoing Co-CEO Reed Hastings said The Walt Disney Co-in possession DIS Hi is a model when it comes to the advertising services level.

What happened: Hastings said when it announced its fourth-quarter results that Hulu has a “10-year lead” in the ad services tier.

Netflix chief financial officer Spencer Neuman said, “We won’t be any bigger than Hulu in the first year, but hopefully we can be at least that big in the next few years.”

Gregory Peters, who will replace Hastings, spoke about the ad-supported service, which launched in November. “We’ve already learned a lot,” he said, adding that “all technologies work; the product experience is good.”

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Why it matters: Peters said user engagement on ad plans was similar to the ad-free plans. He said “reception rate and growth” are solid, but there is more work to be done in terms of validation, measurement and relevance.

The streaming service said its fourth-quarter revenue rose 2% year over year to $7.85 billion, beating analyst estimates of $7.84 billion. Earnings per share came in at 12 cents per share, missing median estimates of 44 cents per share Benzinga data.

The company ended the quarter with 230.75 million paid subscribers and added 7.7 million for the period, beating its own expectations of 4.5 million additions.

Price promotion: On Thursday, Netflix shares surged 7.1% to $338.25 in extended trading after closing 3.2% lower in regular hours at $315.78 Benzinga Pro data.

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