The micro-blogging site managed to post adjusted earnings per share (EPS) of 10 cents on revenue of $594.5 million versus respective consensus estimates of 15 cents and $607.5 million. Mr Dorsey in January hired Leslie Berland from American Express to be its chief marketing officer, given the task of cementing Twitter’s reputation as a place for live events.
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Twitter said marketers “did not increase spending as quickly as expected”. “It’s not growing anywhere close to where people expected a while back”. Today it noted that this quarter it saw a “deepening engagement” of 208 per cent year-on-year in terms of likes, replies and retweets from users driven by new features such as Twitter-Periscope integration, if it’s set to capitalise on this then more livestreaming deals could be on the cards.
On Tuesday, Twitter said that 310 million monthly visitors used the service in the first quarter, a modest jump from the 305 million users that the company had in the last three months of 2015.
Twitter shares fell 10% in after-hours trading Tuesday.
CEO Jack Dorsey said on the company’s earnings call that other sports organizations are showing interest in live streaming their games on Twitter as well. Facebook Inc, which has five times the users, recently made it possible for any of them to live-stream directly on the network.
Exclusive live events, collaborations, and attracting marketers are important ingredients for implementing Twitter’s “live” strategy, according to Sotirios Paroutis, an associate professor of strategic management at Warwick Business School. Its forecast for the second quarter was also lower than what analysts expected. Of Twitter’s total revenue, $204 million was worldwide, an increase of 39 percent year-over-year.
Analysts were also disappointed by its forecast for Q2.
“While we appreciate many of these (efforts) take time, Twitter needs to execute, and it is an uphill battle with modest MAU [monthly active user] and usage growth”, Bob Peck, a SunTrust analyst, wrote last week.
Worse yet, Twitter slashed its second-quarter revenue guidance to $590 million from $610 million – nowhere near analyst expectations of $678 million. “You should expect to see us working with other partners to bring these kinds of joint experiences to life on Twitter”, the company said in its Q1 letter.
The company blamed the disappointing revenue primarily on weakening demand for brand advertising on its website. The loss was narrower than the $162 million loss from a year earlier.
“We have a strong product roadmap created to tap into incremental brand-oriented online video budgets, and will deliver additional features for advertisers later this year – including more detailed demographic targeting and verification, and reach and frequency planning and purchasing”.
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Dorsey was also excited about winning the digital rights to National Football League games on Thursday Night this past quarter.
