Netflix (NFLX) will report third quarter results in a Letter to Shareholders on its website after the bell. The earnings call starts at 18:00 ET.

Last quarter, NFLX missed their subscriber forecast and guided third quarter EPS, revenue and subscribers below estimates.

NFLX last reported disappointing subscriber numbers in the second quarter of 2016 and the first quarter of 2017. They would bounce back the following quarters. This makes for a very important “rubber quarter.”

Netflix has guided for third quarter EPS of $0.68 (vs. $0.29 last year) with an operating margin of 10.5% (+350 basis points Y/Y) and revenue up 34% to $3.99 billion. 

Netflix guided for 5.0 million global net subscriber adds (650K in the US and 4.35 million for the international segment) vs. 5.3 million a year ago. 

Expectations are for ~7.5 million net subscriber additions in the fourth quarter.


NFLX was up 108% year-to-date prior to last quarter’s miss. The miss was a glaring disappointment to investors. The stock to gapped down 13% but rallied that day to close down only 5%. 

Netflix has a $149 billion market value and trades at 75x EBITDA estimates (50x FY19), ~125x EPS estimates (77x FY19) and 10x revenue estimates (8x FY19).