By Jessica Toonkel
$Netflix (NFLX.US)$ showed that its password-sharing crackdown continues to bear fruit, delivering its strongest first-quarter customer additions since the pandemic and further strengthening its position as the dominant global streamer.
The company added 9.33 million subscribers in the first quarter, more than five times the number of customers it added during the same period a year earlier, with its efforts to limit password sharing continuing to bear fruit. Netflix began limiting password sharing in earnest about a year ago.
Netflix ended the first quarter with 269.6 million paying customers globally and said it now has an audience of more than a half billion people. It plans to stop providing investors quarterly membership numbers and the average revenue generated per member early next year because it now has multiple pricing tiers in a variety of markets and will add annual revenue guidance.
The streamer's continued growth comes as competitors like $Disney (DIS.US)$ and $Paramount Global-B (PARA.US)$ push to make their streaming services profitable. While some traditional entertainment companies grapple with password-sharing crackdowns and improving their recommendation engines, Netflix is already benefiting from such product features.
"We have built a hard to replicate combination of a strong slate, superior recommendations, broad reach and intense fandom," the company said in a letter to shareholders. Netflix said it must continue to improve the variety and quality of its programming as well as its product features and marketing.
The company's shares have gained ground, rising about 30% year to date ahead of its earnings report. Shares fell more than 3% in after-market trading Thursday.
Netflix's subscriber growth through March was slower than the fourth quarter of last year, when it added 13.1 million subscribers, but remained robust, topping some Wall Street analyst forecasts.
The company reported first-quarter revenue of $9.37 billion, up almost 15% from $8.16 billion a year earlier and ahead of its own projections for the period. Net profit rose nearly 80% to $2.33 billion in the quarter, beating the company's forecast of nearly $2 billion.
Netflix said it must continue to improve the variety and quality of its programming as well as its product features and marketing.
The service is able to offer an increasingly diverse slate. Netflix originals such as reality series "Love is Blind" and TV drama "Griselda" continue to appeal to subscribers, while the streamer's rivals are now willing to license more hit shows and movies like "Gossip Girl," and "Young Sheldon" from their libraries.
It has also pushed further into live events, livestreaming the annual Screen Actors Guild Awards and "The Netflix Slam," its first live tennis match featuring champions Rafael Nadal and Carlos Alcaraz. Earlier this year, Netflix announced a $5 billion, multiyear deal with WWE.
The company last month said it would livestream a boxing match between Mike Tyson and influencer-turned-boxer Jake Paul in July.
Write to Jessica Toonkel at jessica.toonkel@wsj.com