Twitter's stock plunges on revenue miss
Twitter's stock is tanking after the internet company reported Q1 revenue that missed Wall Street targets and offered a forecast for the current quarter that was far below expectations.
Here are the key numbers:
- Q1 revenue: $595 million, up 36% year-on-year, but below the average analyst expectation of $607.8 million.
- Earnings per share (adjusted): $0.15 vs. the average analyst expectation of $0.10.
- Monthly users: 310 million, up from 305 million at the end of 2015.
- Q2 revenue guidance: $590 million to $610 million, compared to the average analyst expectation of $677.6 million.
Twitter's stock is down roughly 14% at $15.33 in after-hours trading.
The company's weak quarterly results highlight the struggles facing the money-losing company, which is trying to revive its fortunes under the stewardship of cofounder Jack Dorsey. He retook the CEO reins last year, but investors have continue to punish the stock, which has crumbled from its 52-week high of $52.22.
Twitter said that Q1 revenue came in at the low end of its forecast because brand marketers who advertise on its social network "did not increase spend as quickly as expected."
While revenue from video ads on Twitter nearly tripled year-on-year, the company noted that spending on video cannibalized some of the spending that marketers previously spent on other types of ads on its service. In other words, Twitter is not attracting new advertising money, but simply shifting where the money is spent.
Twitter's number of total monthly users returned to growth, after shrinking in Q4, although the growth was anemic — all the growth was international, while user growth in the US remained stalled. Here's a chart that Twitter provided showing its user growth:
Twitter
As the chart shows, Twitter's audience of monthly users has basically stagnated for the past year, even as rivals such as Facebook, Instagram, and Snapchat are growing fast.
Twitter said that changes to its timeline helped boost in user engagement during the quarter, with retweets, replies, and likes increasing. Direct messages were up 50% year-on-year, Twitter said.
The company continued to lose money in the first quarter, posting a net loss of $80 million. That's less than the $162.4 million that it lost in the year-ago period.
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