Netflix reported second-quarter earnings on Thursday, which showed the media giant’s position at the front of the streaming race as it added more global subscribers and saw strong growth in its advertising business.

The streamer said its ad-supported memberships grew 34% during the period compared to the same quarter last year.

Advertising has become an increasingly important business model for media companies to drive (or, in some cases, achieve) streaming profitability. Netflix’s stock has improved in recent quarters thanks to its efforts to gain subscribers in its cheapest, ad-supported tier, as well as its crackdown on password sharing.

Here’s how the company performed during the period ended June 30, compared with Wall Street expectations:

• Earnings per share: $4.88 versus $4.74 per share forecast by LSEG
• Revenue: $9.56 billion versus LSEG’s $9.53 billion forecast
• Total memberships:277.65 million paid memberships globally vs. 274.4 million expected, according to StreetAccount

Revenue was approximately $9.6 billion, up 17% compared to the same period last year, driven primarily by increased average paid memberships.

Netflix said it now expects full-year reported revenue growth of 14% to 15%, compared with prior guidance of 13% to 15%.

The company reported net income of $2.15 billion, or $4.88 per share, compared with $1.49 billion, or $3.29 per share, for the second quarter of 2023.

Netflix’s global paid subscriptions increased 16.5% year-over-year to 278 million. This is one of the last updates Netflix will release on its subscription numbers.

Last quarter, the company warned investors that it would stop providing quarterly membership or average revenue per user figures starting in 2025, noting that the company is “focused on revenue and operating margin as our primary financial metrics, and engagement (i.e., time spent) as our best indicator of customer satisfaction.”

Netflix began focusing on different business strategies to boost revenue growth after the streaming service saw subscriber growth slow in 2022. In May, Netflix said it would launch its own advertising platform and would no longer partner with Microsoft for that technology. The company has also begun adding live sports, such as NFL games on Christmas Day over the next three years, a move that will likely attract more advertising dollars for the streaming service.

“We are live [TV] “Because our members love it, and it generates a ton of engagement and a ton of excitement… and the great thing is that advertisers love it for exactly the same reason,” Netflix co-CEO Ted Sarandos said on Thursday’s earnings call.

Netflix had already been dabbling in live content even before its NFL deal, and Sarandos highlighted the company’s focus on “exciting, exclusive live entertainment.”

Still, original shows like “Bridgerton” and “Baby Reindeer” continue to generate engagement with the streaming service.

The company said Thursday that its cheapest, ad-supported tier has been gaining traction among its base, with those subscribers accounting for more than 45% of subscriptions in markets where the option is offered.

However, Netflix noted Thursday that the ad-supported business is still young and it does not expect advertising revenue to be a “primary driver of our revenue growth in 2024 or 2025.”

“The near-term challenge (and medium-term opportunity) is that we are scaling faster than our ability to monetize our growing advertising inventory,” the company said in its earnings release, meaning the streamer is still unable to meet advertiser demand.

Netflix co-CEO Greg Peters said on Thursday’s earnings call that Netflix has so far focused on growing its subscriber base with advertising. Now that the company is on track to hit its 2025 subscriber goals, Netflix is ​​shifting its focus toward monetizing its advertising inventory, he said.

As the company ramps up its advertising operation, it is giving “advertisers more effective ways to buy… an important feedback we hear from advertisers,” Peters said Thursday.

In this regard, Netflix added that it believes it is on track to “achieve critical scale of advertising-supported subscribers for our advertisers” next year, which will allow it to further grow its advertising-tier memberships in 2026 and beyond.