Twitter (TWTR) reports a miss on revenue, beat on EPS.
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Twitter will see global users gains of about 11 percent this year, bringing the micro-blogging site’s total active monthly population to about 286.3 million by the end of 2016, according to recent estimates by digital market research company eMarketer. But Twitter also reported profits of 13 cents per share on revenue of $602 million for the quarter, which is lower than expected. RBC Capital’s Mark Mahaney expected 311 million monthly users, up just 1 million from last quarter, while other analysts expected growth in the 2-to-3 million range.
For Q3, the company expects revenue of $590 to $610 million, far below the consensus of $678 million. Ad revenue increased 18% from a year ago to $535 million, with mobile ad revenue making up 89% of total ad revenue.
It estimates there will be 8.3% growth in 2017, falling to 7.0% in 2018, 6.0% in 2019, and 4.8% in 2020, when Twitter’s global users will total nearly 370m people.
Advertising revenue totalled $535 million, an increase of 18% year-over-year, Twitter said.
In its letter to shareholders, Twitter cited increased competition for social marketing budgets.
“We’ve made a lot of progress on our priorities this quarter”, Twitter CEO Jack Dorsey, who also is the CEO of payment provider Square, said in announcing the results.
Dorsey, a Twitter co-founder who has been back in the CEO seat since July previous year (in an interim capacity until he was named permanent CEO in October) continues to face investor questions about how he will boost the company’s sluggish user growth.
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With 27.7m users, Brazil now accounts for Twitter’s second largest market, followed by Japan (25.9m) and Mexico (23.5m), but eMarketer forecast that above-average growth in India will take the country past Brazil in 2020 when India is expected to account for 9.6% of all Twitter users around the world. “Whether it’s breaking news, entertainment, sports, or other everyday topics, seeing what’s happening and watching live events unfold with the conversations around them; that’s the power of Twitter”. Yesterday, the company seemed to be trying to head off today’s news at the pass by announcing yet another marketing effort to better explain the company and what it’s objective is for the world at large.
