Netflix reported Thursday that its subscriber growth slowed dramatically over the summer, a sign the enormous profits The video streaming service’s crackdown on freeload viewers is easing.

The 5.1 million subscribers Netflix added in the July-September period represented a 42% decline from total gains in the same period last year. Still, the company’s sales and profits grew faster than analysts had predicted, according to FactSet Research.

Netflix ended September with 282.7 million global subscribers – far more than any other streaming service.

The Los Gatos, California-based company earned $2.36 billion, or $5.40 per share, up 41% from the same period last year. Sales rose 15% year over year to $9.82 billion. Netflix management forecast that the company’s October-December revenue would rise 15% year over year, slightly better than analysts expected.

Last quarter’s strong financial performance, coupled with optimistic guidance, overcame any concerns about slowing subscriber growth. Netflix’s share price rose nearly 4% in extended trading after the earnings release, building on a more than 40% rise in the company’s shares this year.

“We had a plan to accelerate growth again, and we executed on that plan,” Netflix co-CEO Ted Sarandos said during a video call discussing the results.

Subscriber growth last quarter was the lowest in any three-month period since the start of last year. This decline suggests that Netflix is ​​moving into a new phase after benefiting from it a ban about the once-widespread practice of sharing account passwords, which allowed an estimated 100 million people to watch the popular service without paying.

The raid, triggered by a rare loss of subscribers After emerging from the pandemic in 2022, Netflix added 57 million subscribers from June 2022 to June of this year – an average of more than 7 million per quarter, while many of its industry rivals struggled as households curbed discretionary spending.

Netflix’s profits were also boosted a cheaper option of his service, which included commercials for the first time in its history. The company still gets only a small portion of its revenue from its two-year-old advertising push, but Netflix is ​​increasing its focus on this business segment to boost its profits.

Netflix co-CEO Greg Peters predicted the company’s advertising sales will double next year, but will remain just a fraction of total revenue, which will continue to be driven by subscription fees.

“We still have a lot of work to do,” Peters said in a video call with investors. But he expected Netflix’s foray into advertising would ultimately prove as successful as its recent crackdown on password sharing.

Although he was impressed by most of Netflix’s reports, Mike Proulx, an analyst at Forrester Research, called the slowdown in subscriber growth “concerning,” particularly in the U.S., where the company is finding it increasingly difficult to attract more viewers.

“That’s why accelerating growth through advertising is paramount to Netflix’s future strategy,” Proulx said.

As Netflix has evolved, it has increasingly supplemented its slate of scripted TV series and films with live programming, such as a Labor Day extravaganza starring famed glutton Joey Chestnut, who sets a world record for eating hot dogs in a showdown with his longtime nemesis sets up Takeru Kobayashi.

Netflix will try to attract more viewers in the current quarter with a fight on November 15th Former heavyweight champion Mike Tyson takes on Jake Paul, a YouTube sensation turned boxer, and two National Football League games on Christmas day.