Shares of the microblogging site rose about 6% in after hours trading on Tuesday after the San Francisco-based company reported second-quarter sales that beat analysts’ forecasts. Dorsey, in his first ever earnings call since becoming the interim CEO of Twitter essentially said that Twitter had some user growth problems that would take a while to figure out. Everyone knows what Twitter is but they are unaware about why to use it. According to Dorsey, it will take a lot of time for the company to reach the public.
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As per research firm eMarketer, Twitter didn’t even account for 1% of the digital advertising market worth $ 145 billion past year.
“In order to realise Twitter’s full potential, we must improve in three key areas: ensure more disciplined execution, simplify our service to deliver Twitter’s value faster, and better communicate that value”. Dorsey, on a call with investors, said that the user growth numbers were “unacceptable” and that the company hasn’t been doing a good job of making itself accessible.
For the current quarter ending in September, Twitter said it expects revenue in the range of $545 million to $560 million. Meanwhile, the company also launched a new autoplay feature that Twitter members can use on native videos, Vines, GIFs and Periscope. The company posted a revenue of $686.22 million (US$502 million) this morning, a 61 percent increase year-on-year, surpassing its expected revenue of $662.98 million (US$485 million).
Twitter’s closely watched active user base also grew to 316 million during the quarter, up from 308 million in the previous quarter.
Worldwide revenue climbed 78% year-over-year to $181 million and constituted 36% of total revenue.
After initially embracing these financials – and only later focusing on such fundamentals as MAU – investors realized that Twitter’s growth can not be sustained without corresponding user gains.
Twitter has just reported its Q2 earnings, and it’s beaten expectations.
The beleaguered company is searching for a permanent CEO to replace Dick Costolo, who stepped down at the beginning of this month.
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What was said? For starters, there was Dorsey’s reminder that the road ahead for Twitter is both steep and long.
