3 Reasons to Invest in Netflix Before July 16

Earnings season can be a bit overwhelming with all the noise and speculation, but when Netflix releases its second-quarter results on July 16, there are a few key things to keep an eye on.

First off, the ad-supported tier that Netflix introduced sparked a lot of debate initially. However, with 250 million global monthly active viewers and projected ad revenue of $3 billion in 2026, it’s clear that ads are no longer a side project for the streaming giant. Ad-tier members are engaged, with more than 80% tuning in weekly. Keep an eye out for any updates on Netflix’s path to $9 billion in ad revenue by 2030 during the earnings call.

In addition to ads, live sports are becoming a key part of Netflix’s advertising strategy. Testing dynamic ad insertion with WWE and expanding NFL coverage internationally, Netflix is transforming the economics of streaming advertising. Live content is a format where viewers don’t skip ads, making it a premium offering for advertisers. The upcoming report will show if live content is impacting ad pricing positively.

Lastly, Netflix’s operating margin targets for the second half of the year are something to watch closely. With content spending front-loaded in the first half, hitting or exceeding margin targets in Q2 could lead to margin expansion in the latter part of the year. If revenue continues to grow at the same rate while costs stabilize, the operating leverage could be more visible than expected.

While Netflix no longer reports quarterly membership numbers, it’s clear that the company is facing increasing competition from the likes of Amazon and Apple. July 16 will be a pivotal moment to see if ad revenue growth meets expectations and if Netflix can maintain its cost narrative for the second half of the year. Earnings are always a two-sided event, but Netflix’s ability to find new revenue streams in a seemingly mature market sets it apart from the rest. Stay tuned on July 16 to see how Netflix continues to innovate and grow.