The streaming company may have beaten earnings estimates, but faces a tough outlook ahead

Netflix showed why it faces a big challenge in its pursuit of growth.

The streaming giant cheered investors with news it beat Wall Street estimates for the first quarter.

But that excitement eased off when it offered a lighter-than-expected forecast.

That led to shares dropping more than a tenth in after-hours trading before recovering.

Revenue hit almost $8.2 billion over the quarter in a quarter where the company saw shows like ‘Beef’ become a hit series with critics and viewers.

And while Netflix added 1.75 million subscribers from January through March, that missed analyst estimates of more than 2 million new sign-ups.

It adds to the argument the streaming video leader faces signs of market saturation.

It has looked for new ways to make money, which includes a crackdown on password sharing, and a new ad-supported service.

Netflix says it had pushed its plan to expand the clampdown on unsanctioned password sharing into the second quarter to make improvements to the new measures.

It said this would delay some of the financial benefits that would come from it.

Netflix said the crackdown would now begin in the U.S. during the current quarter.

Investors were not overjoyed by its outlook for the coming period.

It forecast just over $8.2 billion in revenue – below Wall Street estimates of almost $8.5 billion.