Twitter shares fall as growth of monthly users slows. Twitter Inc shares fell more than 11 percent in extended trading on Tuesday after the company said its microblogging average monthly number of users grew at its slowest since it went public in 2013 pace.
“This is unacceptable and we are not happy with it,” said Jack Dorsey, who stepped in as interim CEO on July 1, in a call with analysts.
Twitter said it had 304 million users base in the second quarter, compared with 302 million in the previous quarter.
Twitter struggles to increase its audience concerned investors, who focus on the growth potential of the company, and the latest figures did little to reassure them.
Data on company profits overshadowed in the second quarter users and revenue that exceeded expectations, and their bullish projections of future revenue.
The executives also made it clear that it would be a long process, and were sincere about service problems.
“We expect to see significant growth sustained (monthly active users) until we begin to reach the mass market,” Chief Financial Officer Anthony Noto in the call.
“We have not clearly communicated only value of Twitter. And as a result users not keep asking, ‘Why should I use Twitter?” Simply put, the product is still very difficult to use. “
Twitter acknowledges “there is a problem that needs to be worked,” said Evercore analyst Ken Sena ISI. “They were giving investors a sense of challenge and I think the stock sell-off that saw simply reflects that.”
After the bell, shares of Twitter losses widened to more than 11 percent to about $ 32, after closing at $ 36.54 on the Stock Exchange of New York.
Total revenues increased 61 percent to $ 502.4 million. Excluding the impact of a strong dollar, revenue rose 68 percent. Advertising revenue rose 63 percent to $ 452 million. Excluding the impact of the dollar, advertising revenue increased 71 percent.
The net loss of the company was reduced to $ 136.7 million, or 21 cents per share, in the second quarter ended June 30 from $ 144.6 million, or 24 cents a share, a year earlier.
Excluding items, Twitter gained 7 cents per share.
Analysts on average expected Twitter to earn 4 cents per share on revenue of $ 481.3 million, according to Thomson Reuters I / B / E / S.
Twitter estimated revenue for the year of $ 2.20 million- $ 2.27 billion, compared with its previous forecast of $ 2.17 million- $ 2.27 billion.
Twitter also is in the midst of a change of address after CEO Dick Costolo abruptly announced his resignation in June.
The company announced on Tuesday two other executive departures. Todd Jackson, product manager, will move to Dropbox, and Christian Oestlien, vice president of product management, will join Google Inc unit YouTube.