Netflix hits record high on subscriber surge

Netflix (NASDAQ:NFLX) shares jumped to record highs on Tuesday after revealing a surge in new subscribers to the streaming video service.

Netflix widely beat Wall Street expectations when it reported an increase of 5.2 million global customers in the second quarter. Analysts were looking for a smaller gain of 3.2 million new subscribers.

Shares rallied 10% to $177.93 in recent trading. Netflix climbed as high as $177.98 a share, soaring above its previous all-time high of $166.87 set on June 8.

By the end of June, Netflix had 52.03 million subscribers outside the U.S. and 52.92 million in its home market. It was the first time that Netflix had more international customers. The company also said it now expects to log its first-ever annual profit in non-U.S. markets.

Netflix anticipates adding 3.65 million international subscribers in the current quarter. Wall Street had projected a 3.2 million increase.

The Los Gatos, California-based company has spent heavily on original shows to attract new subscribers, finding success with hit shows such as “House of Cards.” Netflix has been in a race with Amazon.com’s (NASDAQ:AMZN) Prime Video, which has also invested in a growing lineup of exclusive programming like “The Grand Tour.”

Morgan Stanley, which raised its price target to $210, noted that Netflix’s original content has encouraged more pay-TV companies to incorporate the streaming service into their plans.

“The 2Q results and 3Q guidance support the view that more recently launched international markets are accelerating in the pace of net [subscriber additions], as demand for Netflix’s service benefits from its rising exclusive content offering,” Morgan Stanley analysts wrote in a note to clients.