Netflix (NFLX  ), the subscription-based online streaming service, had a "beautiful" Q4, as they said in a letter to shareholders.

Netflix gained far more customers than expected in for the quarter, 8.33 million. This is the most that Netflix has ever earned in one quarter, and far exceeds the expected 6.39 million.

Shares of Netflix jumped more than 8% in after-hours trading. The company surpassed $100 billion market capitalization for the first time.

Wall Street predicted that Netflix would have high costs as it expanded into the international market, but the global segment of its business is already turning a profit. Netflix had negative $524 million in free cash flow, much less than the negative $742 million estimated by FactSet. The company added 6.36 million international streamers, beating the 5.10 million expected according to a StreetAccount estimate.

Netflix performed well domestically, too, adding 1.98 million customers over the 1.25 million the company said in October it expected to add in Q4. Netflix's overall revenue has reached $3.29 billion, again beating an expectation of $3.28 billion put forth by Thomson Reuters consensus estimate. Netflix has risen from earnings of 15 cents per share a year ago to 41 cents per share today. Overall, Netflix shares are up more than 64% year over year.

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As for what it will do with this profit, Netflix said it plans to spend $7.5 to 8 billion on content in 2018. CEO Reed Hastings plans to raise that amount even higher in 2019 and 2020.

Though it spent less than expected in Q4, with rapid growth comes high costs. Netflix expects negative free cash flow to reach $3 to 4 billion in 2018, and it will keep raising capital in the high yield market. Netflix promises to eventually have positive free cash flow, hoping that investments in quality content will produce excellent returns. To offset some of its costs, Netflix recently raised the price of its monthly subscription from $10 to $11.

Netflix seems to expect that things will only get better in Q1, with earnings guidance higher than expected. A Thomson Reuters consensus estimate put earnings per share at 56 cents, and revenue at $3.492 billion, but Netflix has pegged it higher, at 63 cents per share and $3.69 billion in revenue.

Although the quarterly reports paint a rosy picture now, Netflix will soon face new challenges. Some of its original content has not performed as well as hoped. New competitors are arriving to the scene. Disney (DIS  ), which pulled its movies from Netflix six months ago and purchased 21st Century Fox (FOXA  ) assets, is expected to be a major rival. Google's Youtube (GOOGL  ), Apple (AAPL  ), Facebook (FB  ), and Amazon (AMZN  ) are also adding more content. And the repeal of net neutrality regulations may also prove tough for Netflix, though the company is forming partnerships with internet service providers to cushion the impact.