Twitter’s stock tanks as it reports flat user growth in Q2

By : |July 28, 2017 0

Though 2017 started on a promising note for Jack Dorsey, Twitter’s Q2 earnings reveal that Dorsey’s company isn’t in a good shape. The micro-blogging site posted a lower than expected number of monthly active users which stood at 328 million, unchanged from the previous quarter sending its shares down by as much as 13 percent in after hours trading.

The state of things in the US was the worst where not only did Twitter fail to add a single user over the last few months — it actually lost two million users. Twitter COO Anthony Noto said the company didn’t have any data to explain why its US monthly audience shrunk in Q2.

Second-quarter revenue totaled $574 million, down 5 percent year-over-year but topping Wall Street’s forecast of $537 million in revenue. It reported adjusted earnings per share of 8 cents, beating analysts estimates of 5 cents per share. Ad revenue totaled $489 million, down 8 percent from the year-earlier quarter.

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The bright spots were DAUs grew 12 percent year-over-year, the third straight quarter of double-digit growth on the metric. However, the company doesn’t disclose the actual number of daily users. Twitter’s live video audience also grew in Q2. During the quarter, 55 million people tuned into Twitter’s “premium” broadcasts, which include MLB games, Bloomberg News shows and Live Nation concerts, compared to roughly 43 million who watched in the Q1 2017.

Twitter started the year with a better than expected performance reporting 9 million more monthly active users than expected Q1. User growth has been a concern for investors, who see the 328 million active Twitter users as severely lagging behind Facebook’s more than 2 billion.

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