Twitter (TWTR) was expected to report $607.41 million in revenue, according to S&P Global Market Intelligence.
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Twitter’s adjusted earnings of 13 cents per share actually beat expectations (10 cents) for the second quarter, but revenues underperformed. Meanwhile, EarningsWhisper.com reports a whisper number of $0.15 per share. Last quarter Twitter added 5 million monthly active users to grow its base to 310 million MAUs but it has been surpassed by other fast-growing social networks like Instagram, which recently passed 500 million monthly users.
Twitter’s shares fell hard on Tuesday after its quarterly update showed more losses for the struggling social media platform, which has had sluggish growth in revenue and active users.
Twitter, Inc. (NYSE: TWTR) reported second quarter financial results after the markets closed on Tuesday.
The disappointing forecast led Twitter stock to take a steep dive, The Verge reported.
In its letter to investors, the company wrote that there will be a “long-term shift away from desktop video to premium mobile environments”, which Twitter hopes to cash in on by positioning itself as a destination for live video of current events. Dorsey says that the company is working on new ways to use notifications to direct people to news events being talked about on Twitter. For now, it remains uncertain if Twitter’s big video push will yield bigger ad bucks – and if users will be flocks to its presentation of live video commingled with live-tweeted commentary. The company said that its deal with the NFL to stream games that are part of its Thursday Night Football package has already drawn interest from advertisers.
“Live-streaming video” has been made one of the company’s five long-term strategy and priorities, with video apps Vine and Periscope at the centre, while Twitter has also committed to improving its safety after repeated criticism over how it handles abuse.
“We’re making the right decisions in our product”, said Dorsey who, to the chagrin of some Twitter investors, splits his time as CEO of payments company Square. For the second quarter, its losses stood at $107m, which is an improvement over the $136m loss it incurred during the same period previous year.
Ad engagements also grew-increasing 226 percent year-over-year-while the average cost per engagement declined 64 percent year-over-year, primarily because of the company’s shift to auto-play video.
The prediction from eMarketer gives Twitter 286.3 million active monthly users by the end of the year. MKM partners reckons that Twitters success is dependent upon the success of its newly launched live-streaming segment, which the brokerage considers as a new lifeline for the company.
Twitter said that they are “seeing a continuation of the trends discussed last quarter with less overall advertiser demand than expected”.
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“Twitter will need to do more, whether it is through additional acquisitions or their own development”, said Larry Weintraub, chief innovation officer of The Marketing Arm.
