Good and not so good news from Twitter’s earnings

By : |July 28, 2016 0

The tech and social networking giants have announced their quarterly earnings. It includes everyone from Facebook who made $2 billion in profits to Nintendo who suffered a loss of $49 million, despite Pokemon Go’s wild popularity. Next was Twitter, and sadly, the micro-blogging site has again missed the boat.

Though Twitter reported total revenue of $602 million this quarter, which is a 20 percent growth from the $595 million it made the previous quarter, it has again seen an immense accretion in net losses numbering to $107 million. This figure was limited to $79 million in the last quarter.

This could be attributed to the content and brand partnerships to live-stream NFL and Wimbledon on the platform. Twitter is also stepping into the VR and AI world with the acquisition of startups like Magic Pony and IXOMOXI.

                                 

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The company has also missed market estimates on sales and non-GAAP EPS. This quarter added a non-GAAP net income of only $93 million and the non-GAAP diluted earnings per share (EPS) has fallen to 13 cents per share, as compared to 15 cents in the last one.

Twitter’s user growth continues to remain invariably stagnant, even in this quarter. The company added 3 million new users to its platform in the most recent quarter, which means only 1 percent upward from the previous one. The total number of monthly active users visiting the platform now adds up to 313 million, which is only 3 million more than the previous three-month period.

However, advertising has been doing good to Twitter. With a massive $585 million, Twitter has seen a 20 percent increase in advertising revenue, where more than 89 percent is attributed to mobile advertising. Mobile also accounted for over 82 percent of total MAUs on the platform.

In the official earning call release, Twitter stated that “We saw continued increases in engagement and sequential growth in both monthly active and daily active usage. This growth was driven by marketing initiatives, organic growth and product improvements, including better relevance in both the enhanced timeline and push notifications.”

Since the engagements on the platform peaked this quarter, the cost per engagement fell 64 percent on a year-on-year basis.

Dorsey, who is now ready to step into his second year as CEO has introduced some major changes to make Twitter appeal to a larger audience. Dorsey commented on this quarter’s earning call saying that, “We’ve made a lot of progress on our priorities this quarter. We are confident in our product roadmap, and we are seeing the direct benefit of our recent product changes in increased engagement and usage. We remain focused on improving our service to make it fast, simple and easy to use, like the ability to watch live streaming video events unfold and the commentary around them.”

The micro-blogging service has recently reiterated its tagline on what the platform is all about – “Twitter is what’s happening now.” Twitter is the first spot to visit to know it all – breaking news, entertainment, sports, or other everyday topics.

The company has also laid out five key objectives for its growth in the coming years – refining our core service, live-streaming video, creators, and influencers, safety, and developers.

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