Netflix shares shot up 15% late Tuesday after reporting net income as well as growth in subscribers that significantly beat the figures forecast by Wall Street analysts.
Netflix, traditionally the first tech company to report its earnings each quarter, said revenue grew 34% in the quarter, in line with analyst estimates. Net income came in at 89 cents per share, beating Wall Street’s number by 21 cents a share.
The number of net new subscribers, a closely watched figure among Netflix investors, increased by 7 million last quarter to a total of 137.1 million subscribers. Subscriber growth was stronger than expected in the U.S. and abroad.
Netflix added 1.1 million subscribers in its domestic market, above the 674,000 additions forecast. In overseas markets, which now accounts for 57% of Netflix’ total subscription base, Netflix saw 5.8 million net new subscribers, above the 4.5 million estimate.
The performance stands in stark contrast to Netflix’ earnings report three months ago, when the company’s stock fell as much as 14% after subscriber growth fell short of analyst estimates. During that quarter, Netflix had a dearth of new programming that resonated with viewers the way hits like House of Cards and Stranger Things had done in the past.
During the third quarter, however, Netflix added a record high of 676 hours of original programming, including new seasons of Ozark and Bojack Horseman as well as its first Indian original series, Sacred Games.
In the current quarter, Netflix is forecasting net new subscribers of 9.4 million, including 1.8 million new subscribers in its domestic market and 7.6 million in international markets.
Separately, Netflix announced it would expand its production capacity with a new production hub in Albuquerque, New Mexico. “We anticipate bringing $1 billion dollars in production over the next 10 years and creating up to 1,000 production jobs per year,” Netflix said in a letter to shareholders. “Our internal studio is already the single largest supplier of content to Netflix on a cash basis.”