Shares in Netflix Inc. surged Monday after the streaming media company reported higher-than-expected new subscriber numbers in the third quarter.

International subscribers led Netflix’s growth, with the company adding 3.2 million subscribers outside the United States in the quarter, well ahead of its guidance of 2 million. In the United States, Netflix added 370,000 subscribers, 70,000 up on its guidance of 300,000.

The number of new subscribers is significantly higher than the 1.7 million subscribers Netflix added in total in the second quarter and the 2.74 million subscribers it added in the same quarter of 2015.

Revenue increased 31.7 percent from the Q3 2015 to $2.29 billion with a profit of $51.5 million, earnings of 12 cents a share. While its international business reported a loss in the quarter, Netflix noted that they expected that it would start delivering a profit next year.

“In Q3, quarterly global streaming revenue exceeded $2 billion for the first time (up 36 percent year over year), helped by our strong content slate including Stranger Things and the second season of Narcos,” the company said in a statement.  On a constant currency basis, this represents 39% percent year-over-year revenue growth, a 400 basis point acceleration from the last two quarters.”

Total subscriber numbers for Netflix now stand at 83 million. “Netflix drove a playoff caliber performance, going 4-for-4 on reported sub results and guide, easily beating our and consensus domestic and International net adds forecasts for the third quarter and better than expected 4Q sub guide,” Cowen & Co. analyst John Blackledge said in a note to clients.  “Original content is transforming the business, which should continue in 2017 as original hours rise to 1,000 from 600 in 2016. We have raised our price target to $150 a share from $110.”

International expansion

Netflix’s decision to cease attempting to localize its product for new markets and instead expand its service into 130 new countries in January is paying huge dividends for the company’s growth at a time when its U.S. growth is slowing thanks to both a mature marketplace and one where it competes with Amazon.com Inc.’s Prime Video and Hulu Inc.

The growth also comes after a price increase in the second quarter, which Chief Executive Office Reed Hastings (pictured above) blamed at the time for slowing growth, noting that “people don’t like price increases … We know that. It’s a necessary phase for us to get through, and then with the increased revenue, we’re continuing to invest in better and better content. That’s what makes us feel very strong and positive about the long term, and that this is a short-term phenomenon.”

Shares in Netflix surged 19.66 percent in after-hours trading to $119.42 per share, it’s highest share price since December 2015.

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