Netflix (NASDAQ:NFLX) is set to report second-quarter earnings on July 16, and the news could lift the streaming platform's per-share price even further past the all-time high it just hit above $500.

Investors seem to be sensing that the second quarter may top the company's guidance back in April, following a first quarter that smashed all previous records.

Back in its first-quarter report, the company called for 7.5 million new subscribers in the second quarter, a significant deceleration from the 15.8 million it added in the first quarter, and more in line with its pre-pandemic growth pace, though the second quarter is a seasonally slower period.

Still, there are a number of signs that Netflix could blow past its guidance once again. Here are some of the tailwinds in the streamer's favor.

A Netflix menu featuring "Stranger Things"

Image source: Netflix.

The pandemic is still raging

Back in April, the conventional wisdom on Wall Street seemed to be that shutdowns would soon be over and life would return to relatively normal by mid-summer. That hasn't been the case in much of the world, especially in the U.S. and Latin America. Coronavirus cases began surging in June once again in the U.S., spoiling the beginnings of an economic recovery as a number of states have taken steps to reinstate preventative measures, closing bars and banning indoor dining.   

Meanwhile, Brazil, the biggest country in Latin America, has the second-most infections of any country in the world behind the U.S., and a number of other Latin American countries are high on the list as well.

During the first quarter, subscriber growth exploded in Europe as much of the continent went into lockdown in early March, ahead of the U.S. and Latin America. Nearly half of subscriber additions came from the Europe, the Middle East and Africa (EMEA) region -- roughly 7 million out of the 15.8 million subscribers that joined the service. Considering the timeline of the pandemic, subscriber growth may have accelerated from the first into the second quarter in some parts of the world, especially in Latin America, which was hit later by COVID-19. 

Also, churn plays a role in Netflix's net additions, and defections have likely fallen during the crisis as there are few other entertainment outlets available. During the second quarter in 2019, Netflix actually had a net decline of 130,000 subscribers as they left the platform after a price hike, showing that churn can be substantial at times.

Competition is limited

While it's true that Netflix is seeing competition increase in the streaming arena with the expansion of Disney+ in Europe and India, the launch of AT&T's HBOMax in May, and the upcoming debut of Comcast's Peacock on July 15, outside of streaming, other entertainment options for Netflix viewers have been severely limited by COVID-19.

Movie theaters have been closed since March. Live sports have been put on hold out of fear of spreading the virus, and when they come back, there will be no spectators. Similarly, other live entertainment like music and theater is on pause, and even bars and restaurants have shut down again after the outbreak flared across the Sun Belt, making socializing outside of the house difficult. 

For now, Netflix and its streaming peers are the only game in town, and that will help draw in a new wave of subscribers in the second quarter and beyond.

Netflix is still the best

It's clear that the streaming boom has endured into the second quarter. Roku, the most popular streaming platform, said that viewing hours on its service rose by 80% in April, and internet searches for Netflix and its most popular shows have remained high.

There's also substantial evidence that Netflix is head and shoulders above its streaming competitors. The company spends significantly more than its peers on content, and that has won it a large and loyal audience.

According to data from Reelgood, Netflix has far more original "quality" TV shows on its platform than any streaming competitor, based on ratings above 6.5 from Amazon-owned IMDB. Netflix had 447 such shows, compared to HBOMax, which was second with 140. Similarly, Netflix was also the leader in high-quality original shows, or those with ratings above 8 on IMDB, with 151 compared to 75 on second-place HBOMax.

Reelgood data also showed that Netflix was by far the most popular service during the peak shutdown period in March and April, as Netflix received 43% of streams initiated on its platform, nearly double that of Amazon Prime, which was second.

Beyond the upcoming report, the pandemic has also changed the landscape in ways that should accelerate Netflix's growth.

Hollywood's traditional windowing practice is more under threat than ever before, as Comcast's Universal Studio said after the successful release of Trolls World Tour that it would release future movies simultaneously in theaters and at home, a move that caused AMC Entertainment to say it would ban Universal movies from its theaters. Netflix has already cashed in on the challenges Hollywood is facing as it snatched up The Lovebirds, which was supposed to debut in theaters in April, but instead hit Netflix streams in May. Hollywood studios have been in talks with Netflix about selling other movies to the streaming platform as well.

Though Netflix is now at an all-time high, better-than-expected second-quarter numbers could lift the stock to new heights. Over the long term, the pandemic will accelerate the shift to video streaming, making internet TV mainstream.