Shares of Netflix (NASDAQ:NFLX) fell sharply in after-hours trading on Tuesday when the company released its latest quarterly update. Worse-than-expected subscriber growth during Q1 spooked some investors. But a closer look at the company's results shows that, despite underwhelming subscriber additions, Netflix's overall business is thriving.

Here's a look at the subscriber growth that missed the mark as well as five other must-see metrics from the quarter.

Netflix streaming on a TV

Image source: Netflix.

1. Subscriber additions

Netflix subscribers rose 14% year over year to nearly 208 million. But net subscriber additions during the quarter didn't live up to management's guidance or analyst expectations. Management had guided for 6 million new members -- over two million more than the 3.98 million members Netflix added.

Investors, however, should note that Netflix's guidance aims for accuracy -- not conservatism. In other words, the company sometimes beats its target and other times comes in below it. Indeed Netflix has missed its target seven times since 2016.

2. Revenue growth

Revenue rose 24.2% year over year to $7.2 billion. This was an acceleration from 21.5% growth in the fourth quarter of 2020.

3. Average revenue per membership

Average revenue per membership increased 6%, primarily because of higher average prices per paying member. Excluding the impact of foreign exchange, average revenue per membership increased 5%.

4. Operating margin

Helped by strong revenue growth and the scalability of Netflix's business model, the company's operating margin and operating profit both hit record highs of about 27% and $2 billion, respectively.

5. Netflix's content budget

After a pause in content production during the COVID-19 pandemic, the company said in its first-quarter shareholder letter that it's now "back up and producing safely in every major market, with the exception of Brazil and India." As a result, Netflix expects to spend an incredible $17 billion on content this year.

6. A share repurchase program

With the company finally generating enough operating cash flow to cover its massive content spending expenditures and the rest of its expenses, Netflix's board of directors approved a $5 billion share repurchase program. The program has no expiration date and management expects to begin repurchasing shares this quarter.

Overall, there's no reason for investors to fret about this business update, despite the market's reaction. Indeed, the quarter's numbers are quite encouraging. Profitability is surging, member churn rates are below levels in the year-ago quarter, and members are growing even against a backdrop of elevated demand for stay-at-home services last year.

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