Twitter said it had 310 million monthly active users in the first quarter, up 3% year over year and up 1.6% from the previous quarter. Twitter can not even boast about being bigger in size in comparison to LinkedIn, the popular professional networking site. It reported non-GAAP EPS of $0.15, beating expectations of $0.10 a share.
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The first-quarter revenue totaled $595m, an increase of 36% year over year.
Twitter has reported a return to user growth but its shares fell up to 12% in after-hours trading after its first quarter results showed that spending by advertisers had declined.
Twitter Inc (NYSE:TWTR) today had a new research report issued by Bank of America (Merrill Lynch) in which it was downgraded as “Underperform” by analysts at the brokerage. But until now none of them have happened in reality.
To boost its stagnant user growth, Twitter has over the past months introduced a new user interface and and emphasized its live video offerings. He said that negative press reports about Twitter were not having an effect on advertisers.
Despite reporting a growth in its monthly active users, the stock dropped by about 11 percent after earnings were released.
Though it is cautious on Twitter’s user and engagement growth, it is positive on the company’s monetization ability.
Shares of Twitter were last trading down 15% at $14.96, with a consensus analyst price target of $21.03 and a 52-week trading range of $13.91 to $41.09. The miss largely came from weakness in March, and similar trends in April led to Twitter’s 2Q revenue guidance coming in ~12% below Street expectations.
“We’ve been doing live for 10 years and… we have a leadership position in it. But it isn’t just about showing a live event; it’s also about hosting a conversation around a live event”, said Dorsey, who is also CEO of mobile payment company Square.
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.
Twitter lost less money than it has in past quarters, despite increasing its total expenses in several areas. While this is good news, it won’t stop the larger trend of annualized user growth being stuck under 10 percent.
It has also been facing competition from Facebook, which has rolled out services such as the Live video streaming program that rivals Twitter’s Periscope.
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And though this happens time and again with the smallest of product tweaks on Twitter’s platform-remember the mobs voicing their displeasure when Twitter swapped out its “favorites” with “likes” and its corresponding stars with hearts months ago?-the power users aren’t going away; media and investors and Wall Street-type pundits would be completely lost without Twitter. Twitter said it is developing a set of additional features for video advertisers, including more detailed demographic targeting and verification, and tools for reach and frequency planning and purchasing.
