Twitter, Inc. Earnings: User Growth Slows

Posted July 28, 2017

Social networking site Twitter, on Thursday, reported a 5% year-on-year increase in average monthly users to 328 million, unchanged from the previous quarter. The social media service reported earnings claiming 328 million total users - the same number it reported after Q1. If we assume that all monthly active users became daily active users (a generous assumption), and Twitter generated $4.55 per user (reaching Facebook's abilities), Twitter would generate $1.5 billion in quarterly revenues. It's daily active user base grew 12 percent from the same quarter a year ago, showing greater engagement with the platform.

The struggling social network also posted a net loss of $116m, up from the $107m it lost in the same period past year. But it remains to be seen just how many more bad quarters the company can endure. Analysts had projected $568 million. Dear Shareholders, We look forward to discussing our second quarter 2017 financial results with you at 5am PT today. However, the company doesn't disclose the actual number of daily users.

But Twitter also said that it doesn't expect its overall sales growth to improve in the second half, citing "headwinds" related to products it's de-emphasizing.

On the surface, Twitter's Q2 report provides good talking points for both bulls and bears.

"We're proud of our strong growth in video, which remained our largest and fastest growing ad format, and we received a positive response from advertisers around the live premium video content debuted at Twitter's Digital Content NewFronts".

The company said it expected adjusted underlying earnings (EBITDA) will be between US$130mln and US$150mln in the third quarter.

I have, in the past, generally been bearish on Twitter (TWTR) and bullish on Facebook (FB), with occasional shifts from those stances for shorter term trades. Twitter CEO Jack Dorsey said in a statement.

The company's stock fell as much as 14 percent to $16.85 after it released its earnings report that showed a net loss and decline in revenue. The key takeaway is that Twitter's U.S. MAUs fell by two million.

Twitter Inc shares fell $1.71 (-8.72%) in premarket trading Thursday.

Excluding one-time items, Twitter earned 8 cents per share, which topped analysts' consensus forecasts of a profit of 5 cents a share on $537 million in revenue.