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Jacob: Three things to look for ahead of Netflix's earnings during the report. One: Subscriber growth. You always want to look at the subscriber growth with Netflix, but they've increased prices globally. You've got serious competition now from Disney, Amazon, Apple, even a few others, so you really want to make sure if you're in Netflix, you want to make sure that subscriber growth is sustaining its momentum. Second thing, operating margin. Management said it wants to get its operating margin around from 10% where it is now to around 14% by year end. That's gonna lead into the third thing. They are trying to get free cashflow positive. Hopefully soon you're looking for negative free cashflow in this quarter of 966 million. That's Street estimates. If they can beat that, get a little bit closer to break even on free cash flow. In the grand scheme of things, that's what really matters. If you're a Netflix investor and that's what you want to look for.

Netflix (NFLX - Get Report) needs to start making generating cash, not burning it. 

Here are three key things to watch in its earnings report Wednesday after the closing bell that will indicate whether Netflix is moving toward free cash flow positive. 

Subscribers and Pricing

We're always watching subscriber growth for Netflix, but after the company increased prices around the globe in the midst of rising competition from Disney (DIS - Get Report) , Amazon (AMZN - Get Report) and Apple (AAPL - Get Report) , one should be very vigilant of subscriber growth. Many analysts believe Netflix isn't in danger of losing subscribers, and that the growth there should be robust. Analysts are looking for 5.3 million paid net subscriber adds. 

Operating Margin

The price increases should expand Netflix's operating margin, which is currently around 10%. Management wants that to move up to 14% by year end, which analysts see as realistic. Wall Street is looking for an operating margin of 12.5% for the quarter. 

Free Cash Flow

That's the name of the game for Netflix, which has been free cash flow negative for its entire existence. The higher margin should help the company move toward free cash flow positive. Analysts are looking for cash burn of $966 million. A beat of that number could spur a rally in the stock, as it would indicate Netflix is moving in the right direction. 

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Related. Netflix Reports Second-Quarter Earnings: 5 Important Things to Watch