“Netflix says its faulty forecasting caused it to miss its target for new subscribers, falling short by more than a million even as it reported quarterly earnings that beat analysts' expectations,” writes Scott Neuman in their recent NPR article entitled “Netflix Falls Short On Subscriber Target, Spooks Investors.”
Neuman explained, “The streaming service that has ventured in recent years into original productions, such as The Crown, House of Cards and Stranger Things, reported a profit of $384.3 million, or 85 cents a share, up from 15 cents a share the previous year. Revenue was up 6 percent to $3.9 billion.”
“However, investors appeared spooked by the missed subscriber forecast, causing shares to fall by 14 percent to $345.63 in extended trading Monday,” the NPR article continues.
Neuman’s states that according to The Associated Press, "The company gained 5.1 million subscribers worldwide during the quarter, more than 1 million below the number that management had believed it could. It marked the first time in a more than a year that Netflix hadn't exceeded its subscriber growth projections. As of June 30, Netflix had 130 million subscribers, including 57.4 million in the U.S."
This article hit home for us even though Netflix is a different business in a different industry than you altogether.
All organizations are working hard to drive growth, and while an innovative company like Netflix is doing everything possible to ensure growth – they too can hit low months.
Do we chalk it up to poor management, processes, say it’s an anomaly, or they’ve just had a bad month?
Next month should be better, right? That got us thinking.
We say it depends on your approach.