Netflix stock fell around 5 per cent in after-hours trading Tuesday after the company posted slowing growth in new subscriptions and lower-than-expected profits, a sign that the streaming giant's pandemic bump may be petering out.

The company said it added 2.2 million net memberships in the three months ended September 30, down from 6.8 million new memberships during the same period in the prior year. The additions bring Netflix's total subscribers to nearly 195.2 million, lower than the 196.2 million Wall Street analysts had projected.

Netflix posted earnings of $1.74 per diluted share on $6.4 billion in revenue. Analysts had projected earnings of $2.13 per share on revenue of $6.38 billion, according to Refinitiv.

Netflix has thrived in 2020 as people were stuck at home during the global health crisis. The company posted colossal subscriber gains over the past two quarters, which helped drive its stock up nearly 70 per cent this year. But there have been questions about whether it can continue that momentum, especially as competition from other streaming providers ramps up.

The company attributed the slowing growth in the third quarter to its "record first half results" — suggesting that because so many new customers subscribed during the earlier months of the year, fewer were left for the third quarter. Netflix had initially expected to add 2.5 million new paid memberships during the quarter.

However, it noted that it has added 28.1 million paid memberships during the first nine months of 2020 — more than the total number of new paid memberships in all of 2019. Netflix also said that "retention remains healthy and engagement per member household was solidly up year over year" during the quarter.

Netflix forecasts adding another 6 million new paid memberships during the final three months of this year, lower than its net adds during the fourth quarter of 2019. But that would bring total new memberships for the year to 34 million, still well above the prior annual high of 28.6 million in 2018. It also expects paid net adds to be down year-over-year in the first half of 2021, given the massive spike earlier this year.

"The state of the pandemic and its impact continues to make projections very uncertain, but as the world hopefully recovers in 2021, we would expect that our growth will revert back to levels similar to pre-COVID," the company said in a release.

"We continue to view quarter-to-quarter fluctuations in paid net adds as not that meaningful in the context of the long run adoption of internet entertainment, which we believe is still early and should provide us with many years of strong future growth as we continue to improve our service."