People aren't freaking out about Netflix's price hike anymore.
The streaming video service on Monday reported skyrocketing profit and membership numbers that brushed away worries its subscriber growth, almost always the main way people take Netflix's pulse, might go off a cliff. The company's shares soared 19 percent in after-hours trading.
The funny thing is its subscriber growth doesn't appear to be reignited. But don't tell that to investors eager to banish a sinking feeling Netflix can't grow like it once did.
Netflix's previous quarterly report included its weakest new member numbers in three years. When the company raised the price for its most popular plan by a dollar, to $9.99 last year, it decided to soften the blow on existing members by "grandfathering" them in at the cheaper rate. When those free passes started timing out in the spring, it caused membership to grind to a near halt earlier this year.
All the while, Netflix's competition is intensifying. Amazon, like Netflix, has been pouring money into original shows and movies for its video service included with its Prime memberships. Then in April, Amazon made it easier for Netflix customers to switch by offering its own standalone Prime Video for $8.99 a month, a dollar cheaper than Netflix's main plan.
Netflix appears to have righted the ship in its membership rolls, but it doesn't seem to be charting the right course. Net additions, which are the number of overall new subscribers from one quarter to the next, are growing again, after the distressing lows earlier this year. But the membership growth rate -- the percentage difference in subscribers from a year earlier -- is continuing to sink lower, both in the latest period and Netflix's predictions for the next one.
Netflix delivered earnings per share of 12 cents in the latest period, when analysts were expecting only half that. Its outlook for the fourth quarter nearly doubled the expectation too.
Shares closed at $99.80, but soared $18.75, up 19 percent, after hours. The stock had fallen on hard times since hitting an all-time high in December. Through the close Monday, it was down 13 percent so far this year after it was the strongest stock in the S&P 500 index last year.
Overall, Netflix reported a profit of $51.5 million, or 12 cents a share, compared with $29.4 million, or 7 cents a share, a year earlier. Revenue jumped 32 percent to $2.29 billion. Analysts on average expected per-share profit of 6 cents -- compared with Netflix's guidance for 5 cents -- and $2.28 billion in revenue.