Netflix's worldwide focus pays off with big milestone, stock heads for records

For the third quarter of this year, Netflix expects another 4.4 million in total subscriber growth - 750,000 more in the USA and 3.65 million additions internationally.

And it had a tidy profit, reporting 66 million dollars in net income, up about 50 percent from the same period a year ago.

Netflix shares are surging Tuesday as Wall Street proclaimed the company's utter dominance of the internet video streaming market after it crushed subscriber expectations.

The majority of those additions-4.1 million-came from overseas, where Netflix recorded more total subscribers than in the U.S. for the first time. While the United States is still its core market, this quarter marked the first time global users made up a majority (50.1 percent) of its total base.

Now, Netflix projects that the company will continue its rapid worldwide expansion by adding 3.65 million subscribers in the third quarter.

The company counted close to 104 million subscribers worldwide for the period that ended in June, almost 2% higher than it had forecasted.

Net new streaming subscribers grew by 5.2 million to 103.95 million.

Netflix noted how the second quarter broke two important records for the company.

Netflix burned over $600 million in cash and says it will have a free cash flow of negative $2 billion to negative $2.5 billion in 2017. Analysts expect next quarter's EPS will be $0.23 and the next full year EPS is projected to be $1.95.

However, in its letter to investors, Netflix additionally highlighted the broad range of content it is now serving up.

Netflix NFLX reported its second-quarter earnings on Monday. We therefore expect improving profitability to enable more (conservative) leverage and significant growth in original content spend over the next few years.

Shares jumped almost 9 percent in after-hours trading on news of the subscriber numbers, to nearly $177 late Monday afternoon.

Because the company does not run advertisements to generate revenue, subscriber growth is an important indicator of how Netflix is doing. In an interview with CNBC, Netflix co-founder and chief executive Reed Hastings said it had to take more risks in its content delivery this year, citing 13 Reasons Why as an example, but it all paid off very well.