Video-entertainment veteran Netflix (NFLX 0.49%) expanded its video streaming services almost worldwide in 2016. This year, the company has committed to a more ambitious slate of original content productions, and it's found a back door into the missing puzzle piece that is China by partnering with a local hero.

As Netflix prepares for a second-quarter earnings report on Monday night, it has gained more than 50% over the past 52 weeks and trades just below the all-time highs that were set in early June. Investors will inspect this report for signs of healthy subscriber growth, as usual, but will also look for wider profit margins and fresh details on how the original-content blitz is working out.

Let's have a closer look at what Netflix has been doing lately, and what investors should look for in Monday's earnings report.

By the numbers

Metric

Q2 2016 Result

Q2 2017 Guidance

Expected Growth

Domestic streaming subscribers

47.1 million

51.5 million

9.4%

International streaming subscribers

36.1 million

50.5 million

40%

Total revenue

$2.10 billion

$2.78 billion

32%

Operating margin

3.3%

4.4%

110 basis points

Net income

$41 million

$66 million

61%

Diluted earnings per share

$0.09

$0.15

67%

Data source: Netflix.

Behind the scenes

Netflix expected to add roughly 3.2 million net new subscribers globally, down from 4.95 million in the first quarter but up from 1.7 million in the year-ago period. A few highly anticipated seasons of Netflix original shows, including the long-running political drama House of Cards, were moved from their normal first-quarter premieres to a spot in the second quarter. The premiere of new originals and fresh seasons of established favorites often attracts scores of new subscribers, so these moves altered Netflix's seasonal growth patterns this year.

Management takes pains to reassure investors that the guidance figures represent the company's own internal forecasts. That said, Netflix tends to deliver earnings above official guidance targets, while revenue projections often turn out to be accurate. Subscriber growth guidance may be off by a few hundred thousand accounts without moving the revenue needle. Try to act surprised if that scenario plays out again, with steady revenue growth and a modest earnings surprise. That's just how Netflix tends to roll.

Moreover, Netflix predicted that it would cross the threshold of 100 million streaming subscribers worldwide just after publishing the first-quarter report. The next week, CEO Reed Hastings was seen on social media celebrating that feat with a steak dinner. In other words, subscriber growth was coming along exactly as planned, three weeks into the second quarter.

Bright red Netflix logo on a dark rock wall outside the company's headquarters in Los Gatos, CA.

Image source: Netflix.

According to an analysis by Cowen & Co. analyst John Blackledge, Netflix premiered 129 hours of original content in the second quarter of 2016 but 300 hours in the same period of 2017. This new material includes the aforementioned season of House of Cards, fresh seasons of Orange Is the New Black and Master of None, and all-new titles Okja, War Machine, and Anne With an E. If rising content production volume is any indication of subscriber growth, Netflix should come through with strong addition numbers this time.

Keep an eye out for financial details on the Chinese partnership with Baidu (BIDU -0.62%) and its local iQiyi video streaming service. This deal shouldn't affect Netflix's subscriber tallies at all, but it will act as a low-cost and high-margin revenue stream. There's no telling how large or small this revenue grab might be, so it's up to Netflix's management to keep us investors informed.