Twitter shares were down sharply on Wednesday even after the micro-blogging firm beat consensus estimates for both profit and revenue.
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Twitter desperately needs a boost to its user-growth rate.
The cloud services provider psoted earnings of $0.62 per share on revenues of $551 million, up 10.6% from a year ago.
But the company lowered revenue projections for Q4, from the $740 million analysts estimated to between $695 million and $710 million. Company co-founder Jack Dorey was officially installed as CEO in October, and promptly slashed 8 percent of the company’s workforce.
Dorsey said today: “We’ve simplified our roadmap and organisation around a few big bets across Twitter, Periscope, and Vine that we believe represent our largest opportunities for growth”. These analysts add that conservative expectations for the company, coupled with easier comps by the end of this year, would allow Mr. Dorsey to improve Twitter’s business smoothly. The stock exhibited somewhat of a rebound by the time markets closed, at $30.85.
Twitter reported 320 million MAUs for the quarter (80 percent from mobile) versus the 324 million expected by analysts. Instagram now has 400 million users and is growing at a faster pace than Twitter.
Platform changes, like Moments, helped Twitter reach more people, Dorsey said, but analysts are only concerned with counting monthly active users. (NYSE:TWTR) tumbled down by more than 10% in after hours trading yesterday, following the company’s earnings call for the third fiscal quarter, with management issuing weak guidance for the current quarter.
Twitter Inc may be counting on Moments to drive growth, but the moment for celebrating a turnaround still looks far off. “Did I mention we need to make Twitter easier?” he said, intentionally repeating himself.
Adam Bain, the advertising chief who was promoted to chief operating officer when Dorsey became permanent chief executive, will soon play a much more important role in running the company’s daily operations, as Dorsey focuses more of his attention on Square, the digital payments company that he also heads.
While the platform remains one of the internet’s most popular social media networks, growth has been slow following Twitter’s initial public offering roughly two years ago.
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Dorsey highlighted the challenge in front of him during a call with investors, noting how Twitter “makes people do a bunch of work to find the right accounts to follow”.
