Twitter user growth stalls, revenue dips
Twitter failed to boost its user base and saw a drop in revenues in the past quarter, the social network said Thursday, sending its shares tumbling in pre-market trade.
The message platform, which has been struggling to keep pace in the fast-moving world of social media, reported a net loss of $116 million in the second quarter, slightly wider than its $107 million loss a year ago.
More significantly, Twitter reported its base of monthly active users was unchanged at 328 million compared to the first three months of the year and up just five percent from a year earlier.
Twitter said revenues in the quarter slipped five percent from a year ago to $574 million, and advertising revenue fell eight percent to $489 million.
Shares in Twitter sank more than nine percent to $17.77 in pre-opening trade on Wall Street following the release.
Twitter, which has never delivered a profit, said it is making progress on improving its product, in the expectation this will boost growth and help it move to profitability.
“We have developed what we believe are steady, stable and sustainable engines of growth,” Twitter chief executive Jack Dorsey told a conference call.
“Twitter is what’s happening in the world and what people are talking about.”
Daily vs. monthly users
Dorsey said Twitter was focusing on the metric of “daily active users” rather than the more closely watched monthly figure, and said daily usage was up 12 percent, without offering a specific number.
“We’re strengthening our execution, which gives us confidence that our product improvements will continue to contribute to meaningful increases in daily active usage,” he said in a statement.
“We’re also encouraged by the progress we’re making executing against our top revenue-generating priorities as we focus on making Twitter the best place to see and share what’s happening, where you can see every side and perspective.”
Twitter has built a loyal base of celebrities, journalists and political figures — and had been expected to see more engagement following the election of US President Donald Trump, a prolific tweeter who frequently makes policy announcements on the social network.
The San Francisco group has been seeking to draw in users by offering more video including live streaming of sporting events, aiming to broaden its appeal.
Twitter’s results came in sharp contrast with those of Facebook a day earlier. The world’s leading social network reported a 71 percent jump in profits to $3.9 billion, fueled by growth in ads delivered to its more than two billion users worldwide.
The research firm eMarketer predicts that Twitter’s total ad revenue will grow 1.6 percent this year to reach $2.28 billion worldwide but that its share of total worldwide digital ad spending will shrink to just one percent.
The research firm said it expects Twitter’s share of worldwide social network users to drop slightly to 10.6 percent in 2017.