Netflix subscriber growth beats expectations

San Francisco: Netflix on Tuesday reported that it gained more than 2 million subscribers in the recent quarter, calming investor fears that the streaming giant was losing paying customers.

The company said it ended the third quarter with slightly more than 223 million subscribers worldwide, up some 2.4 million, after seeing subscriber ranks ebb during the first half of the year.

Netflix shares shot up more than 14 percent in after hours trading to $275.80 on the earnings news.

"After a challenging first half, we believe we´re on a path to reaccelerate growth," the company said in an earnings letter.

"Our competitors are investing heavily to drive subscribers and engagement, but building a large, successful streaming business is hard - we estimate they are all losing money."

Netflix also reported a quarterly profit of $1.4 billion on revenue of $7.9 billion -- a net income slightly less than in the same period a year ago when it brought in more money.

The turn-around in subscriber growth comes as Netflix is poised to debut a subscription option subsidized by ads in November across a dozen countries.

The new "Basic with Ads" subscriptions will be priced at $6.99 in the United States -- three dollars less than a no-ads basic option, Netflix chief operating officer Greg Peters said in a briefing.

"The timing is great because we really are at this pivotal moment in the entertainment industry and evolution of that industry," Peters said.

"Now streaming has surpassed both broadcast and cable for total TV time in the United States."