Netflix earnings: Here's what to expect

Summary

CNBC's MacKenzie Sigalos previews Netflix earnings, noting investors will look past in-line results to focus on engagement trends and forward guidance. Softening engagement and steep drop-offs for hit shows raise churn and pricing power concerns, though the advertising tier's rapid growth to 250M users and $3B expected ad revenue offers a counterbalance. M&A speculation, including a potential shift on NBC Universal, adds an extra watchpoint.

• Netflix reports after the bell; four prior earnings prints saw sell-offs
• Investors expected to focus on engagement and forward guidance
• Morgan Stanley analysts see engagement growth softened ~1-2%
• Shows like Beef and The Night Agent saw steep seasonal declines
• Ad tier reached 250M monthly active users, up 32% since November
• Ad revenue expected to roughly double to $3 billion in 2022
• M&A speculation: investors watching for any shift on NBC Universal
• Historical stance has been cautious on acquisitions