The micro blogging site reported a loss of $136.7m, or 21 cents a share, narrowing from the $144.6m, or 24 cents a share, loss posted a year earlier.
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Analysts had been expecting that Twitter report earnings of 4 cents a share and revenue of $481 million.
Twitter shares have increased roughly 2 per cent since the beginning of the year, and have been trading near a 52-week low.
After sending the stock up 5 percent following the release of the results, investors back-pedaled in after-market trading, sending Twitter down more than 11 percent. At its peak, there were about 4,000 users on Periscope getting details about the company’s latest financials. Co-founder and chairman Jack Dorsey is serving as interim CEO.
For the third quarter, the company projected revenue of between US$540 million and US$560 million, and adjusted earnings before interest, taxes, depreciation and amortization of between US$110 million and US$115 million. Outside the U.S., its number of users increased 3 percent over the same period to 250 million. That is Twitter’s main beef with investors, the fact it has been two years on Wall Street and not shown any real profit or dividends to keep up with Facebook, Apple and other tech giants. “Non-users continue to ask: Why should I use Twitter?”
Dorsey and chief financial officer Anthony Noto implicitly acknowledged the validity of that criticism, saying that Twitter’s performance had been unacceptable.
It realize the full potential of Twitter, the company must improved three key areas: simplify the service to deliver the value faster, better communicate the value and ensure execution that is more disciplined.
Noto acknowledged Twitter had failed to keep users and to entice new ones.
Dorsey has assumed the CEO job on a temporary basis after the departure of Dick Costolo, as Twitter searches for a new chief.
“‘Why Twitter’ must be articulated clearly”, Dorsey said. Stock prices are supposed to be reflective of all information available, so why did Twitter stock crash after the earnings beat?
Twitter’s closely watched active user base also grew to 316 million during the quarter, up from 308 million in the previous quarter.
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During the second quarter as well, Twitter had acquired marketing technology company TellApart while it also pursued a partnership with Google’s DoubleClick platform. That puts the company’s revenue up 61 percent year-over-year.
