Though it managed to beat Wall Street’s expectations for revenue, Twitter didn’t grow its monthly user base at all last quarter.
The company’s stalled user growth during its second quarter sent shares diving by more than 10% in premarket trading on Wednesday.
Investors are looking for signs that Twitter can turn its struggling business around by adding users and edging toward profitability. Twitter reported its first year-over-year decline in revenue in the first quarter but blew past user-growth estimates by adding 9 million monthly actives.
Here are the key numbers from Twitter’s Q2 earnings:
- Earnings (adjusted): $US0.12 a share versus $US0.05 expected.
- Revenue: $US574 million versus $US537 million expected.
- Monthly active users: 328 million, flat from the previous quarter and an increase of 5% from the year-ago period.
In its letter to shareholders, Twitter said it was able to boost engagement among daily users during Q2 with more push notifications, email alerts, and timeline improvements. But monthly user growth was offset by “lower seasonal benefits and other factors.”
CFO Anthony Noto declined to explain those factors during a conference call with investors, nor did he elaborate on why more people didn’t join the service. The company doesn’t expect revenue growth to improve in the second half of 2017, mainly because of “de-emphasised revenue products.”