Twitter Shares Fall After Missed Revenue Goals
Twitter showed Tuesday that it can grow its user base, reporting that monthly active users grew to 310 million for the quarter. But lower revenue than expected sent the social network's stock plunging during after-hours trading.
The company reported first quarter revenue of $595 million, up 36 percent from the same period last year. But analysts surveyed by Thomson Reuters were expecting revenue of nearly $608 million and the miss sent the company's stock sliding more than 9 percent.
In a shareholder letter, Twitter attributed the revenue miss to brand marketers who "did not increase spend as quickly as expected in the first quarter" but noted that it sees "a clear opportunity to increase our share of brand budgets over time."
Meanwhile, the company reported adjusted quarterly earnings of 15 cents per share, ahead of Wall Street's expected 10 cents per share.
The San Francisco-based company has faced questions over the last year about whether it could grow its stagnant user base. Last quarter, Twitter lost users compared with the previous year, so the gains in users this quarter should help them to change the narrative around their growth problems. The company grew MAUs by 3 percent year over year, representing 5 million more users than it had during the same period last year.
"As we outlined last quarter, we're focused on what Twitter does best — live," CEO Jack Dorsey said in a statement, continuing that "we made a lot of progress on product innovation this quarter, particularly with live video and our refined timeline, and people love it — with less than 2 percent opting out. We remain focused on improving our service to make it fast, simple and easy to use."
For the second quarter, Twitter expects revenue between $590 million and $610 million.
Twitter shares closed Tuesday up 3.9 percent to $17.75.