On Thursday, Netflix announced that its subscriber growth experienced a significant slowdown over the summer, indicating that the substantial increases previously seen from the crackdown on password sharing are diminishing.

In the July to September timeframe, Netflix gained 5.1 million new subscribers, marking a 42% decrease compared to the same period last year. However, the company’s revenue and profit still exceeded analyst forecasts, as reported by FactSet Research.

Netflix posted a profit of $2.36 billion, translating to $5.40 per share, which reflects a 41% rise from the previous year. Revenue rose by 15% year-over-year to reach $9.82 billion. Looking ahead, the company anticipates maintaining the same 15% year-on-year revenue growth during the fourth quarter, slightly surpassing what analysts had anticipated.

The latest quarter’s subscriber growth was the lowest seen in any three-month span since early last year, suggesting that Netflix is entering a new stage following the successful enforcement of its ban on widespread password sharing. This practice allowed approximately 100 million viewers to access Netflix’s content without paying.

The initiative was sparked by Netflix’s unexpected loss of subscribers post-pandemic in 2022 and has led to an addition of 57 million subscribers from June 2022 to June of this year, averaging more than 7 million new subscribers each quarter. This growth comes despite many competitors in the industry facing challenges as consumers scaled back on non-essential expenditures.

Moreover, Netflix’s expansion has been supported by the introduction of a budget-friendly subscription tier that includes advertisements—a first for the platform. Although the advertising segment currently contributes only a small portion to overall revenue, Netflix is prioritizing its growth to enhance profitability.