The streaming provider Netflix (NFLX) has had a challenging year on Wall Street. Netflix stock (NASDAQ:NFLX) has dropped more than 60% year to date. 

However, the stock has gained traction in the previous three months, with shares surging by more than 22%. Investors may depend on the streaming platform specialist to resume sequential subscriber growth in the third quarter.

We’ll know precisely how Netflix stock (NASDAQ:NFLX) performed in Q3 when the business publishes profits next week; its third-quarter results are slated to be released on Oct. 18.

Whether or not the firm rebounded to subscriber growth in Q3, one crucial factor — introducing an ad-supported tier — may be enough to get the company back on track next year.

What management had to say

Following two consecutive quarters of falling subscribers, Netflix management said in its second-quarter presentation that it anticipated sequential growth to resume in Q3. Management Administration specifically predicted 221.7 million customers, up from 220.7 million at the end of Q2.

Management said that it has been investing in products, content, and marketing to promote membership growth. This is, of course, nothing new. Management stated in their letter to shareholders from the second quarter that these are the same areas in which the streaming-TV firm has spent to promote membership growth over the previous 25 years. However, with two-quarters of consecutive membership decreases behind it, investors will wait for these expenditures to pay off.

Netflix attributes the company’s recently halted subscriber growth to a mature market for linked TV adoption, account sharing, competition, and a challenging macroeconomic environment. In the face of these problems, a return to growth would be welcome news for investors. And based on the stock’s gains over the previous three months, investors are likely to anticipate the business meeting its third-quarter subscriber growth forecast.

What Next for Netflix Stock

Even if the firm misses its Q3 target, there’s reason to expect sequential subscriber growth to occur in the next several quarters. One way that Netflix intends to address worries about its sluggish membership growth is by introducing an ad-supported tier. Ads on its platform might not only increase the company’s addressable market of subscribers but also attract some of the biggest marketing budgets in a conventional TV, as well as an additional ad spend from marketers who are already investing in the connected TV (CTV) channel.

On the other hand, investors will have to wait until next year to see how much of a boost advertising may provide to both Netflix’s subscriber and revenue growth. For the time being, Wall Street is relying on three areas in which management has typically invested: product, content, and marketing. Of course, the turbulent and uncertain macroeconomic environment may also have an impact on quarterly performance, either negatively or positively.

Netflix will release its third-quarter financial report after the market closes on Tuesday.