It was a “Wet Hot” summer of highs and lows for Netflix Inc., but few will notice the dampness as long as it keeps delivering the heat. The video-streaming giant is expected to report much lower profits on higher revenue Wednesday as it continues its two-pronged strategy of heavy -- and expensive -- investments in original content along with an aggressive expansion into new international markets.

The spending spree is expected to cut into Netflix’s bottom line for its third-quarter earnings report, but with skyrocketing revenue and a subscriber base growing by leaps and bounds, the Los Gatos, California, company is likely to get another free pass from investors.

“Netflix is kind of in that Amazon bucket,” Tom Taulli, a stock commentator and writer for, said of the company’s slim margins. “As we’ve seen with Amazon, a company can last a long time in that bucket if they continue to perform quarter after quarter.”

Analysts polled by Thomson Reuters expect Netflix to post net income of $31 million, or 8 cents per share, a decrease of 48 percent from $59 million, or 14 cents per share, from the same three-month period last year. Revenue, conversely, is expected to rise 24 percent to $1.75 billion.

Netflix will report third-quarter 2015 financial results Wednesday after the markets close. A conference call with Reed Hastings, the company’s chief executive, is planned for 5 p.m. EDT.

19WETHOT1-master675-v2 The Netflix original series “Wet Hot American Summer: First Day of Camp” premiered in July. Netflix has been investing heavily in original content at the expense of its existing library. Photo: Gemma La Manna/Netflix

It’s All About That (Subscriber) Base

As evidenced by the way its stock price has soared after its last few earnings reports, Netflix investors seem to be far more interested in growth than profits. And on that front, the company is not likely to disappoint in the most recent quarter. In a research note Monday, analyst Michael Nathanson said Netflix is expected to add 4.2 million more subscribers, including 1.5 million domestic and 2.7 million international. That would bring Netflix’s total paid subscriber base to a record 67 million.

“Subscribers are probably the key metric at this point,” Taulli said. “They’re going into new international markets, and there’s still a lot of low-hanging fruit available for Netflix. They’re really expanding their empire.”

In July, Netflix reported it had 42 million U.S. subscribers and 23 million international subscribers. The company’s international subscriber base is growing at a much faster rate abroad than it is at home, and that shows in some of its recent content investments. In August, the company debuted “Narcos,” a crime drama told in both English and Spanish, which is seen as a testing ground of sorts for Netflix’s ambitions in Latin America.

Last month, Netflix said it would expand even further, laying down roots in South Korea, Singapore, Hong Kong and Taiwan in early 2016. The company has said it wants to be in 200 countries by 2017.

Delicate Balancing Act

Despite the astounding growth, resentment from Netflix’s old-media rivals looms heavily on the horizon, and shifting attitudes about the growing threat that streaming services pose to the traditional TV ecosphere could spell trouble for Netflix’s library of licensed content. At a Goldman Sachs conference in September, numerous high-ranking media executives spoke of a need to rethink their strategies when it comes to licensing content to Netflix. Conventional wisdom suggests media companies gave their content away too easily in Netflix’s fledgling years, thereby allowing it to become a threat.

“Already during the September conference circuit, we have heard some media executives, most notably at 21st Century Fox and Time Warner, become more vocal against selling content to Netflix, which now has 42 million subscribers in the U.S. and has been labeled the main culprit behind TV ratings declines,” Nathanson wrote.

As the tide turns, Netflix is being forced to make more difficult decisions about whether it wants to focus on maintaining a robust library or investing in original content. In August, Netflix said it would not renew a content deal with Epix, a move that let its competitor Hulu scoop up such popular movies as “The Hunger Games” and “Transformers: Age of Extinction” and the “Rocky” series.

Shares of Netflix were down 0.04 percent Monday to $113.32 in midday trading.

Christopher Zara covers media and culture. News tips? Email me. Follow me on Twitter @christopherzara.