Investor enthusiasm could hardly be higher heading into the second-quarter earnings report from Netflix (NASDAQ:NFLX). CEO Reed Hastings and his team tried to temper expectations following their first-quarter blowout, yet shares have still raced ahead to more than $500 in the weeks following their late-April announcement.

On Thursday afternoon, the streaming video giant will reveal subscriber trends for the months of April, May, and June. And while there's an unusually high range of potential growth results on tap, most investors are bracing for another round of head-turning operating metrics.

Let's take a closer look.

A man watching television.

Image source: Getty Images.

Still streaming

Investors didn't have to squint to see the impact of the COVID-19 pandemic on Netflix's results last quarter. Subscriber gains landed at nearly 16 million in Q1, or more than double the 7 million that executives had predicted. This increase helped revenue spike 28% to $5.8 billion.

The second quarter will include far more of the COVID-19 social distancing period that kept people at home in the U.S. and Europe during the spring, so growth might be even stronger this week.

Hastings forecast a sharp slowdown back in April that foresaw home confinement trends lifting, followed by a temporary move away from TV streaming media over the next several quarters. But executives admitted that their guidance for 7.5 million new members in Q2 was "mostly guesswork" given the uncertain path of the novel coronavirus. Thursday's actual figure might be well ahead of that soft target.

Content hiccups

With limits on new content production efforts now stretching into months, investors are eager to learn whether that restriction will harm Netflix's growth potential. There was no impact last quarter because the streaming video giant had such a packed pipeline of shows and movies that were already in the final stages of postproduction.

This situation might even help Netflix stand out from competitors like Disney (NYSE:DIS), which are busy building up their modest content portfolios. In contrast, the streaming leader already has a massive selection of entertainment options and could more easily navigate through a period of supply challenges. In any case, the production pause is improving Netflix's short-term cash flow trends by pushing out some major expenses into 2021 and beyond.

Looking forward

In late April, Hastings' main message for investors was one of caution that Netflix's soaring growth pace would inevitably slow down over the following quarters. Part of that forecast relied on management's estimate about consumer behavior. We've never been in a situation like this before, but it seemed reasonable to expect that people would shun indoor entertainment activities like TV streaming following a period of unusually high stay-at-home time. Netflix also saw the booming growth in Q1, plus the lack of comparably major releases like Stranger Things and Money Heist, as pressuring subscriber gains in the second half of 2020.

A lot has changed since management made those predictions on April 21, and executives will also have the benefit of three additional months of engagement data when they update expectations for the rest of the year.

Management will likely want to echo the conservative outlook it gave last quarter, especially given the stock price rally over the last few weeks. On the other hand, a second straight quarter of strong subscriber gains and improving cash flow trends might compel an unusually bright operating forecast from Netflix this week.