Twitter continued to disappoint investors in its quarterly earnings report Tuesday – just not in the way they expected.
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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.
Twitter has released its first earnings report for 2016 today (26 April), revealing mixed results for the first quarter of the year. Analysts on average were expecting$677.57 million, according to Thomson Reuters I/B/E/S.
Snapchat, says Peck, has 150 million daily active users including a growing number of Internet influencers, $350 million in revenue forecast in 2016 and a $16 billion valuation, larger than Twitter.
Twitter reported revenue for the quarter of $595 million, missing analysts’ expectations of $607.9 million.
The analyst notes the management’s comments on the earnings call that it is trying to move advertisers from traditional promoted tweets, to promoted video which is better for the Twitter ecosystem.
This month, Twitter expanded its three-year relationship with the NFL to include streaming 10 “Thursday Night Football” games, as well as pregame analysis shows, postgame highlight shows and behind-the-scenes Periscope broadcasts next season. The deal reportedly cost less than $10 million for 10 games.
Analysts said the benefits from the improvements that Twitter had made to its services might come not come in soon enough. Wedbush reissued a “hold” rating on shares of Twitter in a report on Saturday, February 6th. “This is a complete solution for the tens of millions on our platform who care about the National Football League and the tens of millions who aren’t on our platform yet”.
The site remains some way behind rival social platforms however, with Facebook’s active users now at 1.6 billion, while messaging service WhatsApp has also passed the one billion mark. “Whether it’s breaking news, entertainment, sports, or everyday topics, only Twitter lets you connect with people anywhere in the world with live conversation”. One of the ways that Twitter said it hopes to increase its ad revenue going forward is to focus on video, which requires Twitter “to provide a set of additional features including more detailed demographic targeting and verification, and reach and frequency planning and purchasing”. “This aspect of our service is expanding nicely: the total number of unique direct messages (DMs) sent is up nearly 50% year-over-year and Tweets shared via DM are up more than 75% quarter-over-quarter”.
Analysts have criticized Dorsey, who is also the CEO of mobile payments company Square, for struggling to pull Twitter stock out of its slump and present a clear strategy for the company’s future. In October, they appointed co-founder Jack Dorsey as permanent CEO to replace Dick Costolo, CEO from 2010-2015.
Twitter’s stock price quickly dropped 15 percent following the news.
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Twitter’s user growth, which has been the company’s prime area of concern since its 2013 initial public offering, improved in the first quarter – though the growth remained modest. “On the usage front, Twitter desperately needs to get its momentum back”.
