Netflix $NFLX said Wednesday that its quarterly revenue and subscriptions rose as efforts to curb password sharing took hold.

Here are the company's second-quarter figures compared with analysts' expectations, according to Refinitiv:

Earnings: $3.29 per share versus $2.86 per share expected.
Revenue: $8.19 billion versus $8.30 billion expected.

The streaming giant said it added 5.9 million customers during the second quarter as part of broader restrictions on password sharing in the U.S. Netflix said Wednesday it will roll out the new policy to the rest of its customers.

Netflix shares fell as much as 8% in after-hours trading.

The company reported revenue of $8.19 billion, up 3% from $7.97 billion in the year-ago period. Net income of $1.49 billion was up from $1.44 billion in the year-ago quarter.

The earnings report comes as investors await more information on Netflix's rollout of an ad-supported streaming tier and efforts to boost subscriptions by rooting out account sharing.

However, Netflix said it was too early to report on the revenue split between the ad-supported tier - which was introduced late last year - as well as the accounts that resulted from the new password policy.

Netflix said Wednesday that it expects revenue to increase in the second half of the year, when the "benefits of paid sharing plus the steady growth of our ad-supported plan begin to fully materialize."

Netflix has now said it is forecasting revenue of $8.5 billion for the third quarter, a 7% year-over-year increase. It attributes the expected revenue growth to a larger number of average paid memberships.

The company also expects net additions of paid subscribers in the third quarter to be similar to the second quarter. Meanwhile, Netflix expects revenue growth to "accelerate significantly" in the fourth quarter as password-sharing curtailment efforts gain momentum and advertising revenue grows.

In May, Netflix began notifying members of a policy to prevent the use of other people's accounts. Subscribers can either transfer the profile to someone outside their household to pay for their own account, or the member can pay an additional $7.99 per person fee.

According to the Antenna report, in the weeks following the introduction of the sharing policy, the number of subscribers to the company increased.

Netflix executives declined to provide specific information about the rollout of the paid sharing initiative so far on Wednesday's earnings call.

Co-CEO Greg Peters said Wednesday that the company won't know the full effect of the policy until several quarters from now.

"It's not an overnight thing," Peters said in a phone call. "Partly because of the crackdown, which is being applied in phases, and partly because some borrowers won't sign up for their own account immediately, but will do so in the next month or three months or six months or maybe even longer when we launch a title they're particularly interested in."

The executives noted that password sharers who set up their own account have similar characteristics to long-term customers, leading the company to expect high retention rates.

Netflix introduced a new sharing policy and advertising tier last year as part of a response to the first subscriber decline in more than a decade in 2022.

Netflix's stock has soared with the introduction of these initiatives. The company's stock has risen more than 60% this year and hit a 52-week high on Wednesday amid expectations that it will show growth this quarter.

The company said Wednesday that it hopes the changes will help "generate more revenue from a larger base," adding that it plans to use the additional funds to reinvest in the platform.

In May, Netflix said it had expanded its pay-sharing policy to more than 100 countries, which account for more than 80% of its revenue.

"The response to the cancellation has been low, and while we are still in the early stages of monetisation, we are seeing a healthy conversion of rental households to fully paid Netflix memberships," Netflix said on Wednesday, adding that it will address the issue in the remaining countries where it is available.

Media companies, meanwhile, are focusing more on ad-supported streaming as a way to get to profitability.

During its May presentation to advertisers, Netflix revealed few details about its ad-supported tier, though enough to send its stock soaring. The company said it has 5 million active users of the new tier and 25% of new customers have signed up in areas where it is available.

On Wednesday, Netflix confirmed that it had cancelled its "basic" ad-free plan, making its standard plan with ads the cheapest option at $6.99 a month. The standard and premium ad-free tiers cost $15.49 and $19.99 per month, respectively.

These initiatives come at a time when the media industry is going through one of its most tumultuous periods in recent memory.

Industry analysts have long predicted that there could be industry consolidation, particularly through mergers and acquisitions.

On Wednesday, one of the company's CEOs, Ted Sarandos, said Netflix is exploring options for buying intellectual property and building its content library.

"Some of these assets are under pressure for a reason," Sarandos said of potential media companies or assets for sale. "Our M&A activity would mostly be for intellectual property that we could develop into great content for members. Traditionally, we've been very strong builders versus buyers and that hasn't changed."

Netflix is also grappling with the potential consequences of strikes by Hollywood writers and actors.

Analysts expect Netflix to fare better than other media companies during the disruption because of its deep pool of content, particularly from foreign sources.

As a result of the strike, Netflix raised its free cash flow forecast to $5 billion for 2023, up from a previous estimate of at least $3.5 billion, due to lower content spending this year.

Sarandos said during Wednesday's call that Netflix has plenty of fresh content in the pipeline, but he didn't say how long that stream will last. Still, he said the strike needs to come to a conclusion.

"We still have a lot of work to do. There are some difficult issues," Sarandos said. "We are extremely committed to reaching an agreement as soon as possible that is fair and that allows the industry and all of its participants to move forward in the future."