Twitter reported a net loss of $80 million, or 12 cents a diluted share, for the quarter.
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“Revenue came in at the low end of our guidance range because brand marketers did not increase spend as quickly as expected in the first quarter”, the company said in a letter to its shareholders. Twitter expects revenues between $590 million and $610 million, but this is a huge step down from $678 million, which is what analysts had estimated before today’s release. Two-and-a-half years since its initial public offering and 10 years after it was founded, Twitter has yet to become profitable.
Twitter has announced that revenue for Q1 came in at $595 million. That is an improvement from its Q4 report, where user growth was flat quarter-to-quarter.
This is because of the slower than expected growth of advertisers on Twitter’s platform. But the additions were not enough to allow any significant transfer of advertising revenue from the tech giant like Facebook and Google. “Twitter has always been the best place to see what’s happening immediately, to see what’s happening instantly, and to bring people together around a particular shared experience”, he said. That fell short of analysts’ estimates of roughly $607 million.
There’s nothing investors want to see more from Twitter than monthly active user growth.
The site remains some way behind rival social platforms however, with Facebook’s active users now at 1.6 billion, while messaging service WhatsApp has also passed the one billion mark.
If you exclude SMS Fast Followers, an audience that uses Twitter through text messaging in some foreign markets, user numbers actually declined over that period to 305 million from 307 million.
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.
CEO Jack Dorsey said on the company’s earnings call that other sports organizations are showing interest in live streaming their games on Twitter as well.
Analysts’ expectations for non-GAAP EPS averaged out at $0.10, while the average estimate for revenues was $608 million.
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Live-streaming video is a strong complement to the live nature of Twitter, and it helps instantly show the value and power of Twitter. “Considering such numbers, it wouldn’t be wrong to say nothing Twitter has done to improve the appeal of its core product over the previous year has resonated”, says The Verge.
