Twitter Posts Quarterly Earnings
The company’s stock fell after it posted lower than expected revenue
During Tuesday after-hours trading, Twitter Inc. shares fell down by 10% after the announcement of company’s lower-than-expected financial results of the quarter.
The company posted revenue of $595 million, which indicates a 36% year-over-year increase. Analysts had expected the company to post a 39% increase from the 2015 first quarter’s $436 million. In a filing, the company expressed that the spending by advertisers had been slower than expectations.
Still, Twitter had decent user growth. According to the recent quarter earnings report, the company has 310 million monthly active users — the figure has gone up from the previous quarter’s number of active monthly users — 305 million. This has been the better part for the company as during the last year’s same period, the company had reported a decline in its user base.
The San Francisco, Calif. firm posted a loss of around $103 million, which has decreased by 36% in comparison with the same period loss of $162 million last year. The figure posted by the company surpassed the analyst expectations of $120 million loss but the social networking organization couldn’t come at par in terms of revenue.
According to the Chief Executive Officer of the company, Jack Dorsey, the company is trying out in new products. The CEO said, “We made a lot of progress on product innovation this quarter, particularly with live video and our refined timeline, and people love it –with less than 2% opting out. We remain focused on improving our service to make it fast simple and easy to use.”
Although the stock price had plunged down after the company posted its earnings however, several investors have said that they did regain their confidence for the company once they come to know about the strong growth in the user base. Relating to the user growth, CEO of Lyons Wealth Management, Sander Reed expressed that the success cannot be achieved instantly and that Jack Dorsey has to work out several ways to work through the ongoing issues of the company.
A major chunk of Twitter’s revenue comes from mobile but the company couldn’t beat its strong competitor Facebook who has been attracting brand marketers towards itself. Twitter is going for ways to increase its ad revenue. It tends to garner TV ad dollars and most importantly, it has entered into a non-exclusive deal with National Football League to run Thursday Night Football games. Through these initiatives, Twitter is planning to attract more revenue for itself.
As at the market close on Tuesday, Twitter’s stock stood at a price of $17.75.