What happened

Shares of Netflix (NFLX -3.92%) were moving lower today after the company disappointed the market with its first-quarter earnings report. Netflix met analyst expectations, but missed the mark with its guidance, and delayed the rollout of its crackdown on password sharing.

As of 10:34 a.m. ET, the stock was down 3.5% after falling as much as 5.3% earlier in the morning. 

So what

Netflix reported another round of slow growth, adding just 1.75 million subscribers in the quarter with revenue growing 3.7%, or 8% in constant currency, to $8.16 billion, which was slightly below the analyst consensus at $8.18 billion.

On the bottom line, earnings per share (EPS) fell from $3.53 to $2.88 mostly due to currency headwinds, which was slightly ahead of estimates at $2.86.

Netflix also said it delayed the rollout of its "paid sharing" initiative, or its crackdown on password sharing, to the second quarter as it implements lessons from the handful of countries where it already launched.

However, there were some bright spots in the report. The company now expects free cash flow of at least $3.5 billion this year, up from a previous mark of at least $3 billion, and it said it expected revenue growth to accelerate in the second half of the year.

Netflix's ad tier also seems to be off to a strong start as the company said that in the U.S. per-subscriber revenue from its basics with ads tier had exceeded per-subscriber revenue from its standard plan, meaning the company is bringing in at least $8.50 per month in ad revenue in the U.S. 

Now what

Netflix's guidance for the second quarter also seemed to underwhelm as the company called for 3.4% revenue growth to $8.24 billion and earnings per share of $2.84, which was below the analyst consensus at $8.48 billion in revenue and $3.05 in EPS.

Still, Netflix's comments about advertising and free cash flow were encouraging, and paid sharing should give the business a boost in the second half of the year.

Investors will have to be patient, but Netflix should deliver better results by the end of the year, and the streaming stock looks well priced on today's pullback.