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Twitter misses badly on revenue; shares plummet 12%

Twitter's MAUs grew only 3 percent year-to-year, though it did see some growth from Q4

Financial trends and news by Steven Loeb
April 26, 2016
Short URL: http://vator.tv/n/450f

The big question for Twitter in its Q1 earnings was: would it finally be able to break out of its user growth slump? Sadly, it was not the case. While the company did see some quarter-to-quarter growth, it actually added less.

The company had a mixed quarter, posting revenue of $595 million, an increase of 36 percent year-over-year million, but $12 million, and 2 percent lower, than the $607 million that Wall Street had been expected. It reported non-GAAP EPS of $0.15, beating expectations of $0.10 a share.

The less-than-stellar revenue was due to growth from large brand advertisers, which was "softer than expected," according to the company, though brand advertising remains its largest overall conributor to revenue.

"Revenue growth from SMB advertisers was once again the fastest, as we continue to focus on increasing the number of active advertisers we serve."

As a result, its stock tanked over 12 percent in after-hours trading, after gaining 3.89 percent, or $0.67, in regular trading to finish at $117.75 a share.

On top of its revenue miss, it, once again, saw sluggish user growth as well.

Twitter saw its average monthly active users (MAUs) grow a mere 3 percent year-to-year to 310 million, and up only 1.6 percent from 305 million last quarter. That is an improvement from its Q4 report, where user growth was flat quarter-to-quarter. However its annual growth in Q4 had been 9 percent, meaning that number is falling fast. 

The company still has not figured out how to make its user numbers grow, despite finally figuring out a way to monetize logged out users, and doing things to make the service less intimidating to new users.

Mobile MAUs represented 83 percent of the company's total MAUs.

Once again, almost all of Twitter's revenue during the last quarter came from advertising, totaling $531 million, an increase of 37 percent year-over-year. Mobile advertising revenue was 88 percent of total advertising revenue.

Data licensing, and other revenue, came to $64 million, an increase of 34 percent year-over-year. Of Twitter's total revenue, $204 million was international, an increase of 39 percent year-over-year.

For the upcoming quarter, Twitter is projecting revenue of between $590 million and $610 million, with adjusted EBITDA in the range of $145 to $155 million. For the full year 2016, it expects capital expenditures to be $300 million to $425 million, with an adjusted EBITDA in the range of 25 percent to 27 percent.

(Image source: basicsmedia.com)


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