Earlier this month, Dorsey announced plans to cut the company’s workforce by 8 percent.
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He addressed this very early in the call.
“We continued to see strong financial performance this quarter”, said CEO Jack Dorsey. “It gives you insight into an event that you would not be able to see elsewhere”.
CFO Anthony Noto spoke first about Moments, saying, “Moments by itself is simplifying our product”.
Twitter executives spent much of the call touting Moments, which they said has made the website easier to use.
“Moments represents a real shift in our thinking”, Dorsey said during the call.
“Twitter’s third-quarter numbers don’t give us a sense of encroaching doom, but there is the sense that they have to change what they are trying to do”, said Ezra Gottheil, an analyst with Technology Business Research. When the company went public in 2013, revenue from mobile contributed just 65% of its revenue, and it had 75% of its users on mobile devices at that time. Twitter promised new tools that will allow better integration with third-party apps, and better integration into websites.
“People that were making a huge bet on Dorsey shaking things up within five months of being there may be disappointed”, said Andrew Chanin, CEO of PureFunds and a Twitter shareholder. “We need to simplify the product so everyone can get value from Twitter faster”.
Twitter also wants to do more around customer service, and helping to connect users and brands, and to make that process easier. Twitter now has 320 million monthly active users, up just four million over the last quarter. Its net loss was $132 million, or 20 cents a share, compared with a loss of $175 million, or 29 cents a share, in the same quarter a year ago. The company even beat the consensus revenue estimates by 1.6%, when it reported $569.24 million, over $9 million higher than the upper end of its own previous guidance. That falls far below Wall Street’s expectation of $740 million.
The company’s stock dropped more than 10 percent after the quarterly earnings report was dropped on Thursday. But that’s short of expectations set by the likes of RBC Capital’s Mark Mahaney, who had hoped that the company would add seven million new users in the period to reach 323 million users.
Twitter shares fell 12% after-hours after the loss-making social network reported another quarter of slowing user growth as it struggles to keep up with Facebook and younger upstarts such as Instagram.
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Twitter’s fourth-quarter revenue forecast of $695-million-$710-million was well below the average analyst estimate of $739.7 million. Subsequently, average cost per ad engagement dropped by 39% from the previous year. The micro-blogging firm earns nearly all its revenue from advertising.
