On-demand streaming service provider Netflix, Inc. has posted record growth figures for the first quarter, but the company predicted slowing growth in the quarter ahead.

According to the numbers, Netflix added a record 6.74 million subscribers in Q1, ahead of their own projection of 6 million, pushing its total subscriber base to 81.5 million.

The record subscriber growth came off the back of the company’s expansion into 130 new territories at the beginning of January; 42 percent of all Netflix users now live outside of the United States.

Overseas growth was also a driver in Netflix’s previous quarter stats following their launch in Australia and New Zealand.

Although you’d expect Wall Street to celebrate the company overachieving, it was forward growth predictions that created cause for concern.

Netflix is predicting that it will add two million international subscribers in the second quarter, compared with 2.37 million in the year-ago period, and below market expectations.

Year-on-year predicted growth in the United States is also expected to slow in the second quarter to 500,000, down from 900,000 in Q2 2015.

According to The Wall Street Journal:

“The streaming juggernaut now faces twin challenges: at home, it must find ways to expand even as it raises prices and contends with fierce competition from Amazon and Hulu, and an array of other services targeting cord-cutters. Abroad, the company will have to manage Wall Street expectations as its uneven rollouts in foreign markets raise the prospect of sometimes-gyrating results.”

Realistic growth

The numbers predicted by Netflix show realistic growth at a time it has come off a rapid expansion that it is unlikely to be repeated any time soon, baring it coming out a range of new hit shows, or the more unlikely scenario of it capturing exclusive streaming rights to existing content from other players; the latter is unlikely as Netflix is primarily now pursuing creating its own content.

Netflix does face increased competition at home, although more so from Amazon.com, Inc. than Hulu, Inc. given the former has just announced that it was now offering its Amazon Prime Video service as a standalone, pay by month service to those who don’t wish to subscribe to the total Amazon Prime package; the previous arrangement has always been growth limiting for Amazon, but now it is offering a decent service at a slightly lower cost to Netflix the good fight is now on.

Shares in Netflix dropped 7.84 percent in after-hours trading to close at $99.90 per share.

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