Netflix posted its third quarter earnings yesterday, announcing that it has added 1.3 million U.S. customers. The video service ended the quarter with 29.93 million paid domestic users. While Netflix’s latest figures suggest the service has surpassed HBO and Showtime in number of U.S. customers, the company’s profit margin remains low in comparison to leading premium cable networks. Regardless, stock was up nearly 10 percent following the earnings results.

CEO Reed Hastings said that Netflix delivered more than 5 billion hours of streaming video content over the last three months. In April, he announced that members had viewed more than 4 billion hours of video during the first quarter.

According to SNL Kagan, HBO currently has 28.7 million U.S. customers and Showtime has 23 million.

“Hold on to your hats, original programming lovers, that puts Netflix in the lead for the first time,” reports TechCrunch. “Of course, just as it is on the hardware front, Netflix still has a very long way to go when it comes to the total number of paying customers worldwide. In Q3, Netflix came in at about 38 million total paid subscribers for both the U.S. and foreign markets, whereas HBO boasts about 114 million subscribers.”

“Despite its steady user growth and increasingly high profile in Hollywood, helped by its push into original TV series like Emmy-winner ‘House of Cards,’ Netflix still isn’t making big profits,” reports The Wall Street Journal.

“For the fiscal third quarter, Netflix posted net income of $32 million, or 52 cents per share, up from $8 million, or 13 cents per share, a year earlier,” notes WSJ. “HBO, by contrast, generated more than $1.6 billion in profit for Time Warner last year. Netflix’s free cash flow in the quarter was $7 million.”

However, HBO can spread programming investment costs “over the 65 countries where it operates HBO-branded networks and other countries where it sells its content,” explains the article. It also benefits from being offered through cable operators — and the fact that it owns its original programming.

“The challenge for Netflix is to keep up enough growth in $7.99-per-month subscriptions to balance out its significant investments in library programming and original TV shows,” suggests WSJ. “There are signs of momentum: Third-quarter ‘contribution profit’ in the U.S. streaming business — defined as revenue minus cost of revenue and marketing — was 23.7 percent of revenue, continuing an expansion seen in the past several quarters.”