All eyes are typically on Netflix (NFLX 0.17%) when it's time for some primetime viewing entertainment, and investors will be watching just as closely on Wednesday afternoon when the company behind the leading premium video service steps up to post its latest quarterly report.

There's plenty of buzz leading up to the report. The stock has soared 33% so far in 2015, bouncing back after a 7% decline through 2014. 

A big catalyst for the recent run was January's blowout quarterly report. Revenue climbed a better than expected 26% to $1.485 billion when pitted against the prior year's holiday quarter. Adjusted earnings of $0.72 a share represented a slight dip from the prior year, but it blasted its way through the $0.45 a share that analysts were forecasting. 

Wednesday afternoon's report should be another good one. Wall Street sees revenue climbing 24% to $1.57 billion. Those same pros see another year-over-year slide on the bottom line -- targeting earnings of $0.69 a share, after the company earned $0.86 a share a year earlier -- but investors have come to grips with the near-term margin pressures that Netflix faces as it expands aggressively overseas and makes big investments in content.

High expectations
Wall Street's more concerned with Netflix's ability to land new subscribers. That's an observation that may not seem to jibe with last year's performance: Netflix shares staged a modest retreat, despite closing out 2014 with 13 million more streaming accounts worldwide than it had when the year began. However, after last year's springtime rate hike for new members, the market is obsessed with Netflix's attraction and retention. 

Netflix guidance in January was for 61.44 million streaming subs by the end of March, 4.05 million more than it had when the quarter began. Meeting or exceeding that target will play a starring role in deciding which way the stock goes on Thursday.

All signs seem to be pointing to a growing base of members, starting with Netflix's own recent tweeted admission.

Serving up 10 billion hours of content during this year's first quarter is a pretty big deal. We're talking about a roughly 150% surge in usage compared to when Netflix said it pushed out 4 billion hours of content two years earlier. That's more than double the growth that Netflix has experienced in total streaming subscribers in that time, so clearly the average subscriber is consuming more content. That bodes well for Netflix's retention heading into this week's quarterly report. 

The big spike in usage could also mean that Netflix closed out the quarter last month with more than the 61.4 million worldwide accounts that it's publicly expecting. That will certainly be something that the market will be watching in sizing up the fresh financials, but there are a few other things to keep an eye on.

  • Netflix hit a record $9.5 billion in streaming content obligations in its previous quarter. That figure is going to go up, but how much higher will it be?
  • It costs a lot of money to expand overseas, and the $79 million contribution deficit that it suffered during the holiday quarter was Netflix's worst showing since the fourth quarter of 2012. Netflix is forecasting gradual improvement during the first quarter, but expanding into Australia and New Zealand may weigh on that call.
  • Finally, CEO Reed Hastings always has some colorful insight in his quarterly letter to shareholders, and that often involves discussing the competition. With HBO Now launching this month and the popularity this year of streaming television services, he may be a bit more colorful than usual.

Netflix is always an interesting company to track, but Wednesday afternoon will be especially interesting and important.