Netflix shares surged as much as 9 percent in late trading after the company posted subscriber numbers that crushed its own guidance. The stock was last seen near $144, about 8 percent higher in extended trade on Wednesday as more than 3 million shares changed hands.

The company said it added 7.05 million subscribers during the fiscal fourth quarter. Not only was that figure well above its own expectations of 5.2 million, but Netflix said it was the largest-ever quarterly subscriber growth in its history. For the quarter, Netflix added 1.93 million memberships in the U.S. and 5.12 million internationally. Those figures came in well above the streaming giant's forecast that it would add 1.45 million subscribers in the U.S. and 3.75 million subscribers internationally. Analysts expected subscriber numbers to come in slightly below those levels, about 1.44 million in the U.S. and 3.73 million internationally, according to StreetAccount consensus estimates.

Some investors had been concerned that Netflix could lose its first-mover advantage in an increasingly competitive digital content market. In December, Amazon announced that it was expanding its Prime Video service to 200 countries, a little less than a year after Netflix's own international push. In January 2016, Netflix launched its service in 130 additional countries — something the company said in October would lead to tough comparisons in net additional subscribers.

But on Wednesday, Netflix issued upbeat subscriber guidance for the first quarter of 2017. It said it expects to add 5.2 million subscribers in the current quarter — 1.5 million domestically and 3.7 million overseas. The company said, however, that it believes its "strong Q4 results likely pulled forward some net adds from Q1 '17 to Q4 '16." The streaming service posted fourth-quarter earnings per share of 15 cents on revenue of $2.48 billion, roughly a 35 percent year-over-year increase in sales. Analysts expected Netflix to report earnings of 13 cents a share on $2.47 billion in revenue, according to Thomson Reuters consensus estimates.

Last week, the stock hit an all-time high at $133.93 amid bullish expectations from Wall Street. On Wednesday, the stock ripped past that level in extended trade, briefly touching $146. While the stock rallied ahead of earnings, Netflix delivered, said Barton Crockett, senior research analyst at FBR Capital Markets. "These guys are very fully penetrated in the U.S. and yet they are still putting up very good subscriber growth here and they're still executing well internationally. So my hat's off to them," Crockett said on CNBC's "Closing Bell."

Content worth the cash burn

Netflix continued to burn through cash in the fourth quarter, but said its original content is being well-received overseas. The company sees its cash burn as a long-term investment because it ultimately owns the rights to the content created. Netflix believes its portfolio of originals can subsequently drive membership and revenue growth. The streaming giant said its originals like Marvel's "Luke Cage," "The Crown" and "Black Mirror" "continue to generate excitement and excellent viewing all across the world." "It is clear to us that high quality content travels well across borders," Netflix said in a statement. In the fourth quarter, Netflix said its free cash flow deficit grew to $639 million, compared to $276 million in the year-ago period. The company cited the "timing of content payments" for the increase in its free cash flow deficit.