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New shows like "Altered Carbon" and "O Mecanismo" helped Netflix smash analysts' subscriber estimates, and its better-than-expected second-quarter outlook soothed concerns about competition from Apple Inc
Wall Street expected Netflix to add 6.5 million new subscribers, according to FactSet data. Netflix topped that and also said it would bring in 6.2 million more customers from April through June, 1 million more than analyst predictions.
Netflix says it will spend up to $8 billion on global TV shows and movies in 2018. As it has expanded to some 190 countries, investors accepted negative free cash flow in exchange for the potential of outsized growth in future years.
Non-English programming also is gaining traction, Netflix said. "O Mecanismo" is on pace to become one of the service's most-viewed original series in Brazil, and Spanish-language heist thriller "La Casa de Papel" was the most-watched non-English series ever on Netflix, according to the company.
For the just-ended quarter, revenue grew 40 percent year-over-year to $3.7 billion, the fastest pace in the company's history. The average cost of a Netflix membership rose 14 percent during that time, and customer ranks swelled to 125 million.
In a quarterly letter to shareholders, Netflix said it will "continue to raise debt as needed to fund our increase in original content," adding that its debt levels were "quite modest as a percentage of our enterprise value."
The company's market capitalization stands at $137.2 billion, more than double a year earlier.
But it faces growing competition as technology companies such as Apple and Amazon pour money into premium programming, international rivals jump into streaming and traditional media companies pursue digital customers.
Investors have appeared bullish on the company's ability to add more members. Netflix recently traded at 93 times expected earnings for the next 12 months, versus Amazon at 133 times earnings and Disney at 17 times earnings, according to Thomson Reuters data.
Net income rose to $290.1 million, or 64 cents per share, in the quarter ended March 31 from $178.2 million, or 40 cents per share, a year earlier.
Revenue grew 40 percent year-over-year to $3.7 billion, the fastest pace in the company's history.