Netflix, the Internet-based home-video rental service, earned $3.31 million in the second quarter, its first profit ever.
The profit, which fell short of the highest analyst estimate, compared with a loss of $13.1 million a year earlier.
Revenue at the Los Gatos-based company rose 74% to $63.2 million.
Netflix customers, who pay a fixed monthly price to rent DVDs, increased 71% to 1.15 million at the end of June from a year earlier.
Company had higher depreciation expenses to write down the value of DVDs it owns.
Netflix shares slipped 20¢ to $25.28 Thursday on the Nasdaq Stock Market. They’ve more than doubled this year.
Service’s customers may order three films at a time over the Internet; the DVDs are delivered and returned by mail, with no postage or late fees. As Netflix has grown, larger rivals such as Wal-Mart and Blockbuster, have targeted the market Netflix pioneered.
Wal-Mart, the world’s largest retailer, started an online DVD-rental service in October. Blockbuster, the world’s largest videostore chain, is test-marketing a fixed monthly price for unlimited video rentals.
Netflix first sold shares to the public in May 2002.