Netflix (NASDAQ:NFLX) reports earnings after tonight's closing bell. The stock has soared 276% in 2013 alone, with sky-high expectations for this quarter to match. Here's what to expect from the third-quarter report.

Targets by the numbers
In the second-quarter report, Netflix management outlined these third-quarter targets for the most important metrics:


Low End

High End


Total domestic members




Total international members




Total streaming revenue




Earnings per share




Data from Netflix's latest investor letter. All figures in millions, except earnings per share.

Wall Street analysts expect about $0.49 in earnings per share on $1.1 billion in total sales. That's on the high end of management's guidance ranges.

The backstory
Investors will be hungry for fresh details on Netflix's international expansion plans. Netflix introduced services in the Netherlands this quarter, and often says that potential profits will be funneled into further growth abroad whenever possible. Don't expect management to name the next foreign market tonight, but do expect updated parameters for when the next push will come.

The DVD division is withering on the vine. Revenues and membership counts keep falling, quarter by quarter. The DVD division fell below the international streaming operation's customer counts last quarter, which raises the question of what comes next. Separating DVD from streaming was a painful mistake in 2011, when the Qwikster experiment failed horrendously. Is the market getting ripe for another try at this idea -- handled with more tact this time? Look for comments pointing in this direction.

What's next?
Netflix's current subscriber numbers will get a lot of attention tonight, but forward guidance for the holiday quarter may matter even more.

Last year, Netflix added 2 million domestic and 1.8 million international members in the year-ending quarter. Guidance targets below that level will be seen as disappointing, and will raise speculation about a saturated domestic streaming market again.

I'm not buying the saturation argument, and hope to see domestic additions guidance around the 2 million member mark. The international trend should spike even higher, perhaps into the 2.5 million range. I'm basing that forecast on the reported history of international additions, the addition of new markets, and the snowball effect of word-of-mouth marketing as each new geographical market matures.

Netflix's International Additions by Quarter | Create infographics.