Twitter published third quarter financial results Tuesday after the bell, marking the first quarterly report since Jack Dorsey took over as the company’s permanent CEO earlier this month. In a not-so-jargon-free letter published with a tweet, Dorsey confirmed that Twitter expects to “part ways” with up to 336 people from “across the company”, with a special focus on the engineering team.
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In its earnings release Tuesday, Twitter touted advertising revenue of $513 million, a 60 percent leap over year-ago numbers. In April, the company told investors it would change the way it counted monthly active users, including what it calls “SMS Fast Followers”, or people who sign up for and access the service entirely using text messages.
Twitter shares are crashing in after hours trading after the company reported another quarter of disappointing user growth.
Last quarter the company showed 15 percent user growth, 18 percent the quarter before that, 20 percent before that and 23 percent at this time previous year.
It said it was anticipating sales of between $695 million and $710 million for that period, far below the current analyst estimate of $739.7 million.
Wall Street was looking for at least 323 million users.
Twitter reported that its non-GAAP earnings were $0.10 per share, higher than the $0.05 per share expected by analysts.
“Twitter remains a wait-and-see story”, said Paul Sweeney, a Bloomberg Intelligence analyst. In a similar call three months ago, Dorsey’s pointed critique of Twitter’s product failings sent the stock down 11 per cent. But analysts said it could be due to anemic user growth and Instagram’s advertising share growth after opening up its platform to all advertisers in September. Mobile users represented 80 per cent of the total.
Jack Dorsey has returned as Twitter’s CEO after seven years since he was ousted.
It’s been a tumultuous time for the social media company in 2015. The company expected to achieve an adjusted EBITDA in the range of $155 million to $175 million.
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Dorsey added that Twitter has begun “an integrated marketing campaign in the United States around Moments that will roll out over the rest of the year and into 2016” and will include television ads beginning with Thursday’s baseball World Series. “As organic growth has slowed Twitter has refocused on product initiatives and iterations”.
