Twitter shares nuked after reporting terrible user numbers

Jack dorseyBill Pugliano/Getty ImagesTwitter CEO Jack Dorsey

Twitter shares are crashing in after hours trading after the company reported another quarter of disappointing user growth.

Here are the key Q3 numbers:

  • Monthly active users: 320 million, versus the 324 million expected by analysts, and compared to the 316 million users in the second quarter
  • Monthly activer users, excluding SMS followers: 307 million users, compared to 304 million users in the second quarter.
  • Revenue: $US569 million, up 58% year-on-year, compared to the $US559.6 million expected by analysts (Twitter had already pre-announced that revenue will be at or above the top end of its forecasted range of $US545 million to $US560 million)
  • Adjusted EPS: 10 cents versus the 5 cents expected by analysts
  • Net loss of $US132 million, compared to a net loss of $US175 million in the year-ago period
  • Q4 Revenue Guidance: $US695 million to $US710 million

Twitter shares were down 11% to $US27.90 in after hours trading on Tuesday.

It’s not a great debut for Jack Dorsey, who was appointed CEO earlier this month and will be hosting his first earnings conference call with investors as the company’s new permanent chief later on Tuesday. Wall Street will be looking for answers about how Dorsey intends to revitalize the company’s flagging user growth and to reverse the growing impression that Twitter could become a social networking also-ran.

To put Twitter’s stalled user growth in perspective, the company added a total of 4 million new users this quarter. Facebook, which is more than 4 times the size of Twitter, added 49 million new monthly users during its second quarter.

Twitter also appears to have suffered a steep and sudden drop in the prices that it charges marketers to run ads on its service.

It’s been a busy few months for Twitter. In addition to appointing a new CEO, the company launched the new Moments feature, which tries to make it easier for new users of the service to follow live events, such as sports and presidential debates. And the money-losing company recently slashed 8 per cent of its workforce.

While Twitter eliminated some of the uncertainty about its management by completing its CEO search, the appointment of Dorsey to the role creates more questions, as the 38-year-old Twitter cofounder also serves as the full time CEO of digital payments company Square.

Twitter’s stock has plunged 41 per cent from its 52-week high of $US53.49, though it has rebounded from recent lows when shares were trading below the company’s IPO price.

Twitter warned investors last quarter that they should not expect any meaningful user growth for a “considerable” amount of time. The question now is whether Dorsey has plan to change that.

We’ll be covering Twitter’s results once they hit the wire, so refresh this page or click here to follow along.

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