Netflix delivered quarterly earnings that fell short of analysts' expectations on Wednesday, although subscriptions beat Street estimates.
The video streaming company posted first-quarter earnings of 38 cents per share, versus estimates for 69 cents. Revenue totaled $1.57 billion, which was in line with estimates. Netflix said earnings would have been 77 cents a share, excluding a foreign exchange loss.
The strong subscriber report overshadowed guidance for the second quarter that was below estimates and strong dollar woes. The stock rose 13 percent in after-hours trading to $537.18 a share, an all-time high. (Tweet This)
Domestic net additions in the first quarter came in at 2.3 million, topping estimates for 1.88 million. Internationally, the company added 2.6 million subscribers, compared to projections of 2.3 million. The company forecasts second-quarter net adds of 0.6 million, similar to the year-ago quarter.
Netflix's closely watched total streaming contribution margin rose to 17.7 percent, from 15.6 percent a year ago.
The company attributed the strong U.S. growth, in part, to it's "ever-improving content, including the launch of the third season of 'House of Cards' and new shows 'Unbreakable Kimmy Schmidt' and 'Bloodline.'"
Ross Gerber, CEO and president of Gerber Kawasaki, said the positive investor response was all about subscriber growth.
"It's so overvalued yet it just goes higher when they totally miss on earnings because it is about subscriber growth. I really do think that's important long term," Gerber told CNBC's "Closing Bell" on Wednesday.
"This company is a leader in the future of television and that's what they're doing so well. Even though they have these huge competitive issues for them on the horizon, I still think that Netflix will be a core part of most people's entertainment system in the future."
Gerber said he loves Netflix, although he doesn't own the stock because he's a fundamental investor.
Read MoreHow Google might change in Europe
Looking forward, the video streaming company said it expects second-quarter earnings of 26 cents a share, which is well below current estimates of 90 cents.
Netflix shares rallied on Monday after UBS upgraded the stock to "buy" from "neutral." UBS also upped its price target to $565 from $370 as it expects the company to continue to grow subscribers.
Last week, Netflix said it hopes to boost its share authorization to 5 billion shares from 170 million shares, according to a SEC filing. The announcement sparked speculation the company may soon split its stock. The option will be discussed at its annual shareholders meeting on June 9.
"For them to be so far below on the bottom line is somewhat surprising however we know they've been spending a lot on original content, we know they've been spending on their expansion internationally and it seems to have worked because those subscriber numbers are very strong," said Christine Short, senior vice president of Estimize. Short does not own shares of Netflix.
—CNBC's Michelle Fox contributed to this report.