Those hoping that Netflix (NFLX) would deliver the kind of blowout subscriber figures it posted in January and October are likely disappointed by the streaming giant's subdued first-quarter figures. All the same, after taking into account the company's healthy second-quarter outlook, Netflix's latest earnings report did little to spark fears that the competition and/or high penetration rates have done much to slow its momentum.

And as it has done in prior quarters, the company's fairly candid management team shared some numbers and commentary that provide fresh reasons to remain upbeat about how Netflix's core service is evolving and what the company is doing to grow its appeal.

With the help of both subscriber growth and last year's price hikes, Netflix reported Q1 revenue of $2.64 billion (up 35% annually) and EPS of $0.40 (up from $0.06 a year ago). The former was in line, while the latter topped a $0.37 consensus analyst estimate.

Some 1.4 million U.S. and 3.5 million international streaming subscribers were added, bringing Netflix's total bases to 50.9 million and 47.9 million, respectively. Those numbers fell slightly short of guidance for 1.5 million U.S. and 3.7 million international streaming adds.

But Netflix also forecast it would respectively add 600,000 U.S. and 2.6 million international subs next quarter, better than consensus estimates for 373,000 and 2.17 million adds. On the flip side, EPS guidance of $0.15 is below a $0.24 consensus. Revenue guidance of $2.76 billion (up 31% annually) is roughly in-line.

After initially slipping in response to the numbers, shares finished after-hours trading up 1.4% to $149.35, making new highs along the way. They rose 3% in regular trading on Monday going into earnings. In pre-market trading on Tuesday, shares were up 0.7%.

Netflix argues both its Q1 results and Q2 guidance differed from expectations due to the delayed release of Season 5 of House of Cards, and to a lesser extent other "content moves." These events depressed Q1 subscriber adds while boosting the bottom line, and are expected to do the opposite in Q2. "We have come to see these quarterly variances as mostly noise in the long-term growth trend and adoption of internet TV," the company insists.

This trend, along with the company's execution, has Netflix now handling over one billion hours of weekly viewing, CEO Reed Hastings disclosed on this earnings call. Though this figure implies about 10 hours of viewing for each of Netflix's 100 million global subscribers, Hastings notes it's still far less than the billion hours of daily viewing that Alphabet/Google's (GOOGL) YouTube now gets. "We definitely have YouTube envy," Hastings declared.

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TheStreet's Eric Jhonsa and Leon Lazaroff previously covered Netflix's earnings through a live blog.

The comparison with YouTube, whose viewing skews heavily towards ad-supported, short-form, material, was in some ways a rehashing of an argument that Hastings has frequently made: Netflix isn't merely competing with other long-form, ad-free, streaming services such as Amazon.com's (AMZN)  Prime Video or Time Warner's (TWX)  HBO Go and HBO Now, but against entertainment options in general. And as online video grows its share of the pie, there's room for many firms to prosper.

Thus when asked about Amazon -- recently estimated to have a $4.5 billion 2017 content budget, not too far removed from Netflix's $6 billion -- on the call, Hastings downplayed the rivalry. "They're doing great programming...but I'm not sure it will affect us very much, because the market is so vast," he said. Hastings amusingly added Netflix is "competing with sleep on the margin" when users get hooked on a show.

A devil's advocate counter-argument: While Amazon and Netflix may indeed be just two of many, many, entertainment options, consumers are bound to put the two in the same basket when evaluating their spending options in a way that they wouldn't group together more indirect entertainment rivals. That could pose a challenge for Netflix as it battles for more cost-sensitive consumers, particularly overseas.

But with subscriber growth still going strong, that remains a theoretical debate for now. Though Netflix is now found in about half of all U.S. broadband households (not counting ones that are "borrowing" a login from a friend or relative), Hastings insists there's still a lot of room to grow U.S. penetration rates as his firm's content library continues to swell. And without saying which ones, CFO David Wells mentioned certain international markets now have penetration rates approaching that of the U.S.

Netflix's aggressive, data-driven, original content investments remain the engine fueling all of this viewing and subscriber growth. The company talked up the Q1 receptions seen for 13 Reasons Why, Iron Fist and a Dave Chappelle comedy special, and noted the Q2 launches of new seasons for multiple existing hits will be followed by the arrival of "a lot of new brands in the second half of the year," including the Will Smith film Bright and other high-profile movie launches.

Content chief Ted Sarandos also indicated Netflix is looking to spend more on religious and family programming, and mentioned the company is now filming local content in 13 countries. On the other hand, Netflix mentioned in its shareholder letter it doesn't plan to join Amazon, which just paid $50 million for a Thursday night NFL streaming deal, in bidding for live sports.

Thanks to all of that spending, Netflix's free cash flow worsened to negative $423 million last quarter from negative $261 million a year earlier, and its streaming content obligations rose by $800 million sequentially and $3 billion annually to $15.3 billion. Heavy ad spending is also hurting cash flow: Netflix plans to spend over $1 billion on marketing this year, with a focus on running programmatic (automated) ad campaigns that can deliver personalized ads at scale.

Markets clearly aren't bothered by all that spending right now, not when Netflix appears on its way to ending the year with over 110 million subscribers. Much like that Seattle-based rival that Hastings doesn't view as a big rival, investors are willing to give Netflix a pass for depressing its near-term profits to make big investments meant to drive both short-term and long-term growth.

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