Let's see if the first quarter was just a fluke.

Netflix (NFLX) reports second-quarter results after the close Monday, and investors are expecting strong subscriber growth numbers after a disappointing first quarter.

In the last 12 months, the shares are up 64%. And the stock would have gone higher, but it hit some turbulence after the company missed first-quarter subscriber growth estimates.

First-quarter net domestic additions were 1.42 million, slightly below the Wall Street estimate of 1.5 million, while international adds were 3.53 million, below the consensus estimate of 3.68 million. Management blamed the miss on content shifting from the first quarter to the second and told analysts to expect stronger subscriber numbers in Q2 as more new shows premier.

Because of the content shift, management guided second-quarter subscriber adds above Street estimates. Analysts are now looking for 600,000 new domestic subscribers, well above the previous estimate of 364,000, and 2.6 million international adds, above the prior consensus estimate of 2.09 million.

Netflix moved more content into the second quarter because the company believes a heavier content slate would boost a traditionally slow quarter.

During the second quarter, Netflix released House of Cards Season 5, Unbreakable Kimmy Schmidt, Season 3, a news season of Orange is the New Black, Master of None and season 2 of Sense8, just to name a few. By my count, Netflix launched 40 new programs from April to June.

But while the refreshed slate should help subscriber growth, it's sure to weigh on margins. First-quarter contribution margin was 41.2% domestically and international was 4.1%. Operating margins were 9.7%, above the company's 2017-year end guidance of 7%.

Analysts are looking for operating margins to dip down to 4.5% in the second quarter and rebound to over 6% in Q3 as the company eases back on expenses.

With all the content available on Netflix, the company believes it has increased pricing power. In fact, the company said last quarter it expects to jack up average revenue per user (ARPU) at a mid-single-digit rate annually.

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A price hike would certainly be music to investors' ears as first-quarter free cash flow was a negative $423 million. Netflix expects to spend $1 billion on marketing this year. Analysts say Netflix will likely burn through at least $2 billion in cash this year and need to tap the debt market (once again).

Analysts are looking for second-quarter earnings of $0.16 per share on revenue of $2.76 billion. For the full year, Netflix is expected to report revenue of $11.28 billion, a 28% rise over 2016, and EPS of $1.05.

For Netflix shares to go higher, the company needs to grow its subscriber base while continuing to sell investors on the promise of profitability some time in the future.

Right now the investment community is convinced the first-quarter was an abberation. Netflix bulls are hoping strong subscriber growth this quarter will push the stock over $180 per share.

Netflix's shares rose 9.9%, following the release of its second quarter earnings.

(Read what Jim Cramer and Bruce Kamich have to say on Netflix here and here.)

(This article originally appeared at 11:00 ET on Real Money, our premium site for active traders. Click here to get great columns like this from Chris Laudani, Jim Cramer and other writers even earlier in the trading day.)

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At the time of publication, Laudani had no positions in the securities mentioned.

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