In Q1 Twitter‘s revenues rose by 36 per cent year-on-year to $594.5 million but the company, which in ten long years has never made a profit, remains in the doldrums and reported a net loss of $79.7million Twitter’s share price fell by close to 14 per cent as the bad news filtered through.
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Ad revenue of $531 million was up 37 percent year-over-year, and mobile accounted for 88 percent of total ad revenue. Analysts were expecting revenue to be around $607.8 million, but the company hauled in just $595 million.
Twitter said it had 310 million average monthly active users at the end of the period, compared with 305 million in the fourth quarter when numbers were actually down. The drop came the day after the company missed first-quarter revenue expectations and issued a downbeat outlook.
Chief Financial Officer Anthony Noto said Twitter’s long-term goal was to have “millions of advertisers like our competitors”.
Twitter pinned the blame for slow growth on the fact that brand marketers did not increase spend “as quickly as expected” in the first quarter, so what does this spell for it’s future?
User growth: Ahead of Twitter’s first-quarter report, investors were arguably most interested in the company’s reported users.
“On the usage front, Twitter desperately needs to get its momentum back”, said eMarketer principal analyst Debra Williamson.
The company also said that new follows on the service are up about 48 percent. Direct messages are up about 50 percent year-over-year and tweets shared via direct message are up more than 75 percent quarter-over-quarter.
To boost its stagnant user growth, Twitter has over the past months introduced a new user interface and and emphasized its live video offerings.
The social network also lowered revenue expectations for the second quarter, forecasting between $590 million and $610 million, which is well below Wall Street estimates of $677 million.
Twitter’s new National Football League streaming deal is just the start of the company’s foray into live video content.
And though this happens time and again with the smallest of product tweaks on Twitter’s platform-remember the mobs voicing their displeasure when Twitter swapped out its “favorites” with “likes” and its corresponding stars with hearts months ago?-the power users aren’t going away; media and investors and Wall Street-type pundits would be completely lost without Twitter.
Twitter recorded a meager uptick in user growth in the first quarter.
He also noted that some advertisers have started paying for video ads on Twitter from TV budgets – pools of money that traditionally tend to be much bigger than budgets for social media advertising.
Salmon pointed to Facebook’s major push into Twitter’s core strength of “live”, most recently with a live video streaming feature that competes with Twitter’s Periscope. The company said the growth was because of the time of year and marketing efforts.
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On Tuesday, Dorsey was relatively quiet on an earnings call with analysts, though he said he was intent on improving Twitter so it was easier to use.
