Netflix blows past earnings estimates as subscribers jump 16%

LOS ANGELES — Netflix will no longer provide quarterly membership numbers or average revenue per user starting next year, the company said Thursday as it reported earnings that beat on the top and bottom lines.

Total memberships rose 16% in the first quarter, reaching 269.6 million, well above the 264.2 million Wall Street had expected. However, the quarter marks one of the last glimpses investors will get of the company's subscriber base going forward.

"As we've noted in previous letters, we're focused on revenue and operating margin as our primary financial metrics — and engagement (i.e. time spent) as our best proxy for customer satisfaction," the company said in its quarterly letter to shareholders. "In our early days, when we had little revenue or profit, membership growth was a strong indicator of our future potential."

Netflix said now that it is generating substantial profit and free cash flow — as well as developing new revenue streams like advertising and a password-sharing crackdown — its membership numbers are not the only factor in the company's growth. It said the metric lost significance after it started to offer multiple price points for memberships.

The company said it would still announce "major subscriber milestones as we cross them."

Netflix also noted that it expects paid net additions to be lower in the second quarter compared to the first quarter "due to typical seasonality." Its second-quarter revenue forecast of $9.49 billion was just shy of Wall Street's estimate of $9.54 billion

Shares of the company fell around 4% in extended trading.

Here are Netflix's first-quarter results:

Netflix reported first-quarter net income of $2.33 billion, or $5.28 per share, versus $1.30 billion, or $2.88 per share, in