Netflix (NASDAQ:NFLX) has some big questions to answer for investors this week. The world's leading subscription-based streaming video giant is set to announce operating results on Oct. 19 for the period that ended in late September. They should start to show a boost from its stepped-up pace of content releases.

Co-CEO Reed Hastings and his team are also likely to issue their detailed projections for Q4, which is traditionally a critical period for the TV and film giant.

With that big picture in mind, let's look at a few key metrics to watch for in the report set to come out on Tuesday.

A person watches TV on a laptop in bed.

Image source: Getty Images.

Is Netflix meeting expectations?

The company's July outlook called for sales to rise about 16% this quarter to $7.5 billion. But the bigger figure to watch is subscriber trends. Netflix posted two straight quarters of sluggish results on this core growth metric, translating into membership gains of just 6 million through the first half of 2021. The comparable figure was 25 million in the same period in 2020.

Netflix executives said the slowdown is being driven by that huge growth a year ago and other temporary issues related to the pandemic. It isn't because of increased competition or reduced market share, they argue. "COVID has created some lumpiness in our membership growth," management told investors in July, "which is working its way through."

Support for this bullish reading of the business should show up in a return to more stable membership growth in Q3 and beyond.

Content will be in the spotlight

Investors should get a clearer picture about how Netflix's content is resonating with its global audience on Tuesday. Last quarter's update put the spotlight on several hit new releases, including Shadow And Bone and Sweet Tooth, which each quickly attracted roughly 60 million viewers.

Those figures might be dwarfed by Squid Game, which has set new engagement records for the business. A hit at that level will be good news for the business, especially given that Netflix is entering its busiest season yet for quality content releases. A pause in show and film launches in early 2021 set the stage for an active Q3 and Q4 for releases. Membership growth should benefit from this content flood.

The financial wins

Netflix will announce its updated outlook on membership on Tuesday. It should also reveal whether executives still target a 20% operating margin this year, up from 18% in 2020 and 13% in 2019. We'll also learn whether the company is on track to break even on cash flow, a key first step in becoming a cash-rich business.

NFLX Operating Margin (TTM) Chart

NFLX Operating Margin (TTM) data by YCharts.

Netflix's long-term outlook sees plenty of room for these financial metrics to expand over time. "Our belief is that as we steadily improve our service to better please our members," management said in July, "this will lead to continued growth in our membership base, [average revenue per user], revenue, operating margin, and profit dollars."

The company should show gains in most of these areas on Tuesday, depending on how well its content connected with users across the world through late September.

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