Now playing
02:49
How Netflix is everything to everyone
Moviegoers sit, waiting for their movie to start at the AMC Burbank theatre on reopening day in Burbank, California, March 15, 2021.
Valerie Macon/AFP/Getty Images
Moviegoers sit, waiting for their movie to start at the AMC Burbank theatre on reopening day in Burbank, California, March 15, 2021.
Now playing
04:18
Here's why straight-to-streaming blockbusters might never work
TOPSHOT - Director Steven Spielberg arrives for the 90th Annual Academy Awards on March 4, 2018, in Hollywood, California.  / AFP PHOTO / Kyle GRILLOT        (Photo credit should read KYLE GRILLOT/AFP/Getty Images)
Kyle Grillot/AFP/Getty Images
TOPSHOT - Director Steven Spielberg arrives for the 90th Annual Academy Awards on March 4, 2018, in Hollywood, California. / AFP PHOTO / Kyle GRILLOT (Photo credit should read KYLE GRILLOT/AFP/Getty Images)
Now playing
02:49
Steven Spielberg is partnering with Netflix
B25_25594_R
James Bond (Daniel Craig) prepares to shoot in 
NO TIME TO DIE,
an EON Productions and Metro-Goldwyn-Mayer Studios film
Credit: Nicola Dove
© 2020 DANJAQ, LLC AND MGM.  ALL RIGHTS RESERVED.
Nicola Dove/EON Productions/Metro-Goldwyn-Mayer Studios
B25_25594_R James Bond (Daniel Craig) prepares to shoot in NO TIME TO DIE, an EON Productions and Metro-Goldwyn-Mayer Studios film Credit: Nicola Dove © 2020 DANJAQ, LLC AND MGM. ALL RIGHTS RESERVED.
Now playing
02:39
Amazon is buying MGM for $8.45 billion
PASADENA, CALIFORNIA - JANUARY 16: President and CEO, Discovery, Inc. David Zaslav speaks onstage during the Discovery, Inc. TCA Winter Panel 2020 at The Langham Huntington, Pasadena on January 16, 2020 in Pasadena, California. (Photo by Amanda Edwards/Getty Images for Discovery, Inc.)
Amanda Edwards/Getty Images for Discovery, Inc.
PASADENA, CALIFORNIA - JANUARY 16: President and CEO, Discovery, Inc. David Zaslav speaks onstage during the Discovery, Inc. TCA Winter Panel 2020 at The Langham Huntington, Pasadena on January 16, 2020 in Pasadena, California. (Photo by Amanda Edwards/Getty Images for Discovery, Inc.)
Now playing
02:24
AT&T spins off WarnerMedia, combines it with Discovery
Detail of a mans hand scrolling through Netflix on an Apple iPad Pro, taken on March 6, 2020. (Photo by Phil Barker/Future Publishing via Getty Images)
Future Publishing via Getty Imag
Detail of a mans hand scrolling through Netflix on an Apple iPad Pro, taken on March 6, 2020. (Photo by Phil Barker/Future Publishing via Getty Images)
Now playing
02:37
Netflix shares drop after subscribers miss
nickelodeon/from youtube
Now playing
01:33
'Real World,' 'Frasier,' 'Spongebob:' See the reboots coming to this new streaming service
Ben Affleck, Gal Gadot and director Zack Snyder on the set of 'Justice League.'
Warner Bros.
Ben Affleck, Gal Gadot and director Zack Snyder on the set of 'Justice League.'
Now playing
01:02
See the new trailer for the 'Justice League' director's cut
Detail of a mans hand scrolling through Netflix on an Apple iPad Pro, taken on March 6, 2020. (Photo by Phil Barker/Future Publishing via Getty Images)
Future Publishing via Getty Imag
Detail of a mans hand scrolling through Netflix on an Apple iPad Pro, taken on March 6, 2020. (Photo by Phil Barker/Future Publishing via Getty Images)
Now playing
04:27
2020 was supposed to be the year of streaming. Instead, it was the year of Netflix
Now playing
01:47
Discovery CEO: Discovery+ has a library as big as Netflix's
Paul Bettany is Vision and Elizabeth Olsen is Wanda Maximoff in Marvel Studios' WANDAVISION, exclusively on Disney+.
Marvel Studios/Marvel Studios
Paul Bettany is Vision and Elizabeth Olsen is Wanda Maximoff in Marvel Studios' WANDAVISION, exclusively on Disney+.
Now playing
01:07
See the Marvel 'WandaVision' series trailer
From Walt Disney Studios/Disney+/YouTube
Now playing
01:01
'Hamilton' movie trailer released ahead of Disney+ premiere
BURBANK, CALIFORNIA - OCTOBER 29: Robert Greenblatt, Chairman of WarnerMedia Entertainment & Direct-To-Consumer, speaks onstage at HBO Max WarnerMedia Investor Day Presentation at Warner Bros. Studios on October 29, 2019 in Burbank, California. (Photo by Presley Ann/Getty Images for WarnerMedia)
Presley Ann/Getty Images for WarnerMedia
BURBANK, CALIFORNIA - OCTOBER 29: Robert Greenblatt, Chairman of WarnerMedia Entertainment & Direct-To-Consumer, speaks onstage at HBO Max WarnerMedia Investor Day Presentation at Warner Bros. Studios on October 29, 2019 in Burbank, California. (Photo by Presley Ann/Getty Images for WarnerMedia)
Now playing
03:30
HBO Max is here. Its boss explains why it's worth the price
Ivan Marc/Shutterstock
Now playing
03:01
Disney is investing big in streaming. Here's why
BURBANK, CALIFORNIA - OCTOBER 29: Robert Greenblatt, Chairman of WarnerMedia Entertainment & Direct-To-Consumer, speaks onstage at HBO Max WarnerMedia Investor Day Presentation at Warner Bros. Studios on October 29, 2019 in Burbank, California. (Photo by Presley Ann/Getty Images for WarnerMedia)
Presley Ann/Getty Images for WarnerMedia
BURBANK, CALIFORNIA - OCTOBER 29: Robert Greenblatt, Chairman of WarnerMedia Entertainment & Direct-To-Consumer, speaks onstage at HBO Max WarnerMedia Investor Day Presentation at Warner Bros. Studios on October 29, 2019 in Burbank, California. (Photo by Presley Ann/Getty Images for WarnerMedia)
Now playing
02:15
Here's a first look at the new HBO Max
John General
Now playing
03:17
Why Amazon Prime Video isn't Netflix
New York CNN Business —  

Netflix added nearly 7 million new subscribers in its most recent quarter, about 2 million more than the streaming company expected.

Netflix (NFLX) now has more than 137 million people tuning in around the world.

The company’s stock surged nearly 14% after hours. That’s welcome news for a company that had been hammered by shareholders after July’s lackluster earnings and last week’s big tech sell-off.

Beating its own subscriber expectations is a big win for the company. Last quarter, the company said that it gained about 1 million fewer customers than it expected, sending its stock plunging.

Netflix expects to add another 9.4 million subscribers in the last part of this year.

During an investor presentation Tuesday, CEO Reed Hastings attributed the discrepancy between the company’s subscriber estimates and its actual totals to a “forecasting” issue, as opposed to anything changing with the business. He said that in the future, the company will focus on paid subscribers — right now, its overall totals include people who are using free trials. Without those trials, Netflix has about 130 million people who pay for a subscription.

Nearly 6 million of the new subscribers this quarter came from overseas. Analysts have widely expected that would be the case, but Netflix said its international gains were even greater than it had initially forecast.

Netflix has been making an aggressive push for members internationally over the past year. At a conference last February, chief financial officer David Wells said the company would have about 80 foreign-language productions in 2018. Several of those shows, including Germany’s “Dark” and India’s “Sacred Games,” have been well received by critics.

The company has not just been spending money on international programming, though. Wells said in February that Netflix expected to have more than 700 programs available to customers by the end of the year.

The company says some of those investments are already paying off. This summer, Netflix released six original romantic comedies on the platform, and it now says more than 80 million accounts watched at least one of them. One of those films, “To All the Boys I’ve Loved Before,” was one of Netflix’s most-viewed original films ever.

Netflix also touted its winter lineup. One film, director Alfonso Cuarón’s “Roma,” has already been floated as a contender for the upcoming Hollywood awards season. Netflix says it will debut simultaneously in theaters and on the streaming service.

All that content comes at a cost. Netflix is spending so heavily that it is burning a ton of cash — the company said it is expecting negative free cash flow of $3 billion this year, and has similar expectations next year. Free cash flow measures how much cash is generated after the company covers investments in its business.

“We recognize we are making huge cash investments in content, and we want to assure our investors that we have the same high confidence in the underlying economics as our cash investments in the past,” the company wrote in a letter to shareholders Tuesday.

Netflix said last year that it expected to spend about $8 billion on programing in 2018. Analysts at the research firm Cowen estimate that the company could actually spend about $13 billion on its content by the end of the year.

The streaming company is beefing up its programming in part so it can compete with others. There are plenty of challengers who are coming to market, including Disney (DIS), which is launching a streaming service next year. WarnerMedia, the division of AT&T (T) that includes HBO, Turner and Warner Bros, also just announced that it is working on its own new streaming service. (CNN is part of WarnerMedia.)

Others, including Amazon (AMZN) and Google parent Alphabet’s (GOOG) YouTube, already have products on the market.

Hastings said Netflix doesn’t focus that much on any one competitor.

“Some day, there will have to be competition for wallet share — we’re not naive about that,” he added. “But it seems very far off, from everything we’ve seen.”

The company also dismissed concerns about whether new competition would diminish its own library. Disney, for example, has already said it will pull content from Netflix ahead of its streaming launch.

Netflix Chief Content Officer Ted Sarandos said during the investor presentation that the company’s own original shows have been more valuable than licensing shows from other studios.

But he also said Netflix still sees opportunities to work with its competitors.

“We’ve been a pretty dependable buyer,” Sarandos said. He added that even if other studios launch their own services, they may find that Netflix will give them a better return on investment for some content.

Selling to Netflix, he said, has “proven to be very positive for them for many years.”