Twitter’s stock plunged more than 11% after hours on Tuesday afternoon after it delivered disappointing Q2 earnings.
The biggest driver of the crash was the company’s guidance for next quarter, which was significantly lower than predicted ($590 million to $610 million versus the $681.4 million analysts expected).
Twitter blamed the low guidance on the fact that there was “less overall advertiser demand than expected.” Brands didn’t want to give Twitter their money.
It also saw its slowest quarterly revenue growth since its IPO.
Here were the main take-aways from the company’s earnings call, led by CEO Jack Dorsey, and CFO Anthony Noto, and COO Anthony Bain:
- Twitter sees video as its biggest advertising opportunity — including live video. The company recently sealed deals to stream Wimbledon, the Democratic National Convention, and NFL games, and focus on more sports, entertainment, and political events moving forward.
- Even though Twitter’s number of monthly active users has stalled, it believes that even people who don’t understand Twitter at all will want to come to the site to watch live videos.
- Meanwhile, Twitter said that it will take time for it to “unlock” video ad budgets, because it still has a lot of ad tech to build that will make it clear to advertisers how valuable its video ads are. Generally, convincing TV advertisers to shift budgets to digital video is something other big tech companies like Google and Facebook are talking about too.
- It felt like the company’s big message was, Even if we’re not growing users fast, we’re going to make more money from video ads, which we are seeing more of than ever before.
- “We have become a video centric platform — it’s our number one ad format in terms of revenue,” execs said. “Just a year ago those products did not exist.”
- So, Twitter’s biggest challenges are, yet again, trying to grow its audience, while convincing advertisers that it’s a worthwhile platform.
- If you are already a Twitter user, get ready to see more notifications. Dorsey says that the company is working on new ways to use notifications to direct people to news events being talked about on Twitter.
- Jack Dorsey reiterated that solving Twitter’s abuse problem is “truly one of the most important things for us to improve.” The company has been saying that for years now.
- When an investor complained about Twitter not giving its daily active user number, just its monthly active user number (313 million), Noto said that they would consider adding it next year.