(CNN) — Last year, Netflix made a particularly risky bet by pushing users who share passwords to create their own accounts — but it’s paid off.

Netflix, the dominant player in streaming, added more than 9 million subscribers in the first three months of the year, hitting a record high of 269.6 million subscribers.

“It added more subscribers than many analysts, myself included, expected,” said eMarketer senior analyst Ross Benes. “This signals that password sharing was even more common than previously thought as Netflix keeps converting freeloader viewers into paid users.”

While the subscriber additions topped Wall Street’s estimates, the company still reported a drop in growth from its blowout fourth-quarter report, when Netflix added 13 million subscribers. Netflix announced Thursday that it plans to stop sharing its quarterly subscriber numbers in 2025.

The company also reported $9.37 billion in revenue and earnings per share of $5.28 for the first quarter, beating Wall Street’s estimates, according to FactSet.

However, the stock, which has been a darling of Wall Street this year, fell in after-hours trading.

Much of the company’s past growth and success, analysts say, has come from its old, well-established business model. In recent months, Netflix has made moves to expand and even radically reinvent its business in an effort to juice profit.

While streaming competitors like Disney+, Hulu, Max (owned by CNN’s parent company Warner Bros. Discovery) and Peacock work to draw in subscribers with original programming, Netflix has made big bets lately in live sports, video games, and in deals to license other providers’ content — all while transitioning from an advertising-free subscription service to a full-blown ad-supported juggernaut.

Netflix’s reinvention

For Netflix, last month’s Oscars were a disappointment: Though the streaming service led its rivals in nominations, it took home just one award, for best live-action short film. Going forward, the company seems to be moving away from what it was known for: spending its money on developing the big-budget films and TV shows able to win those awards.

The company’s first-quarter letter to shareholders laid out several goals to “sustain healthy growth long term,” including: “Improve the variety and quality of our entertainment — with more great TV shows and movies, a stronger slate of games and must-watch live programming.”

In recent months, after “Suits” exploded in popularity on the platform, Netflix has indicated that it plans to license more content from other studios. New generations are rediscovering iconic shows from the 90s and the early aughts, like “Seinfeld” and “Sex and the City” after they show up on Netflix’s platform.

“They’re getting tons of viewership on both original content and licensed content,” Alicia Reese, an equity analyst who covers Netflix for Wedbush Securities, said. “It’s productive and it’s cheaper for them.”

Netflix has also expanded into live and sports programming this year, encroaching on traditional TV’s domain. In February, Netflix aired its first-ever awards show, the Screen Actors’ Guild Awards, and announced a 10-year deal to air “WWE Raw” live, valued at more than $5 billion.

In the fight for eyeballs, Netflix has gotten creative, partnering with Rockstar Games’ “Grand Theft Auto,” the wildly popular action-adventure video game franchise, to further push into the video game space.

“We’re stoked by the performance of GTA,” Netflix co-CEO Greg Peters said in January. “We were in the top mobile game downloads for several weeks, which shows it was not only big for us, but big numbers for mobile gaming in general.”

Reese has faith in Netflix’s new direction.

“Netflix has that winning formula right now,” she said. “They have a lot of content of various types that keep people using the service at various price points.”

TV with ads, again

Reese said she believes Netflix also has other avenues of growth including the company’s newer advertising-supported subscription tier.

The ad tier, which costs $6.99 per month in the United States, significantly less than Netflix’s other subscription plans, has seen explosive growth since it was introduced in late 2022, according to the company. In January, Netflix’s president of advertising, Amy Reinhard, shared that Netflix’s ad-tier had more than 23 million users.

While the company did not share an updated number of ad-tier users, in Thursday’s shareholder letter, Netflix said its ads membership grew 65% quarter-over-quarter.

Reese said Netflix’s future growth could hinge on its success in the advertising space.

In January, Peters said the company aimed to snatch more ad dollars from traditional TV competitors.

“We know ad dollars follow engagement. We’ve got the most engaged audience so we believe we’re well positioned to capture some of that ad spend that shifts from linear to streaming,” he said.

Netflix will stop sharing quarterly subscribers

On the company’s earnings call, Netflix co-CEO Greg Peters discussed the company’s decision to stop sharing quarterly paid subscriber numbers beginning in 2025.

“We’ve evolved, and we’re going to continue to evolve, developing our revenue model and adding things like advertising and our extra member features. Things that aren’t directly connected to number of members,” he said. “So, each incremental member has a different business impact.”

Benes from eMarketer, said Netflix’s decision to stop sharing subscriber numbers allows the company to “quit while its ahead and go out as the world heavyweight champ in subscribers”

“Netflix is emphasizing what benefits them,” Benes said. “The password sharing boosts will eventually recede and it will be very difficult to continue to add as many subscribers as they have added in the last few quarters.”

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