Tech

Wall Street will be watching to see Netflix's subscriber growth

Key Points
  • Netflix reports its Q2 earnings on Monday afternoon.
  • It's expected to post $2.76 billion in revenue and earnings per share of 16 cents.
  • Analysts are closely watching subscriber additions. It advised last quarter it would announce 3.2 million new subscribers.

Netflix's revenue may be increasing, but Wall Street cares more about whether the company can add subscribers.

The video streaming company is expected to post $2.76 billion in revenue when it reports its Q2 earnings on Monday after the bell, according to a Thomson Reuters consensus estimate. That is a 31.2 percent increase over the same quarter last year. Earnings per share are estimated at 16 cents.

Most analysts, however, are closely watching the number of subscriber additions. Netflix said during its last earnings report it expected to add 3.2 million new subscribers this quarter.

UBS analyst Doug Mitchelson expects the company to be close to guidance, mostly due to the original content it added this quarter. Netflix debuted new seasons of "House of Cards" and "Orange is the New Black," as well as original shows including "Glow."

"We expect Netflix's original content ramp to continue to drive accelerating international net additions, especially as Netflix increases investment in local content overseas and expands genres such as movies and non-fiction," Mitchelson wrote in a report.

Q2 is usually the lowest quarter for Netflix subscriber additions, MKM Partners senior research analyst Rob Sanderson told CNBC. He expects the company to post subscriber numbers close to guidance. Sanderson also noted that the Q3 outlook may be important, because it is a much larger factor among full-year subscribers.

But Netflix has more competition as companies add over-the-top TV options. Hulu with live TV and YouTube TV, AT&T's DirecTV and Dish's Sling TV all allow people to stream content without a cable or satellite subscription.

Amazon and Hulu have also been ramping up their original content slates to compete against Netflix, while Apple is slowly rolling out its own shows including "Planet of the Apps" and the upcoming "Carpool Karaoke." Hulu recently received 18 primetime Emmy nominations, while Amazon garnered 16. However, Netflix still took home the largest number of streaming platform nominations with 91.

Disclosure: CNBC parent company NBCUniversal is a co-owner of Hulu.

— CNBC's Chantel McGee and Matthew Belvedere contributed to this report.