Netflix Inc. (NASDAQ:NFLX) is set to release its earnings numbers for the first quarter of 2014 this afternoon after the market closes in New York. The company’s stock has been beaten down by the momentum bust of the opening months of the year, but it still stands at more than double its value this day last year. Given the amount of earnings priced into Netflix, and the non-committal mood of the market, this afternoon’s numbers could bring huge volatility.

Streaming is a booming business, and Netflix is dominating the offerings of competitors. The company is the face of the streaming industry, and is becoming a reasonable alternative to premium cable as it offers more and more original content. This afternoon’s earnings should show off the numbers that investors really care about: subscription adds and cost levels.

Netflix Earnings Set For Explosion

If Wall Street’s analysts are to be believed, Netflix earnings are set to explode in the next couple of years. The company earned just $2.12 per share for the full year 2013. Analysts are expecting that to double this year, and hit $7.47 in 2015. This afternoon’s results are for the first quarter of 2014, making them an important guide to the company’s future performance.

The headline numbers will probably have the greatest influence on the stock market right after Netflix delivers its report. Analysts surveyed by Businessweek are expecting the company to earn 85 cents per share for the first quarter on revenue totaling $1.3 billion.

Netflix has managed to increase its earnings through a couple of simple growth paths. It is constantly increasing the number of subscribers it has in the US. The number hit 33.5 million at the end of 2013. It’s expected to have risen by an additional 2.25 million in the first quarter of the year. It’s also managed to keep costs relatively low, something it may not be able to manage in the longer term.

Netflix Heads For Cost Trouble

As it heads toward what appears to be a bright future, there is but one albatross following Netflix (NASDAQ:NFLX). The company seems adept at convincing people to sign up to its service, but it may not be able to keep the cost of doing so down.The company’s biggest costs are certain to be in content acquisition going forward, but Netflix is the first to approach the problems.

Nobody is sure about the cost structure of a growing streaming business. Netflix has had it relatively easy so far, but a market maturing on the back of competition has a way of redistributing profits. If there is any indication that Netflix is facing higher than expected costs, investors are likely to get nervous.

Costs are going to be watched in this afternoon’s report, and shareholders should keep a look out for the, admittedly less sexy, numbers. They may have a bigger impact on the company in the long term.

Disclosure: Author represents that he has no position in any stocks mentioned in this article at the time this article was submitted.