Twitter’s still having trouble getting advertisers to spend money
Twitter shares have plummeted more than 12 per cent after revenue missed expectations, as did guidance for the next quarter, as it said there was "less overall advertiser demand than expected".
The figures
Revenue at the struggling social network came in at $602m for the second quarter, up 20 per cent on the $502m in the same quarter last year and up just over one per cent on the $595m in the previous quarter. Earnings per share came in at 13 cents.
However, Analysts had estimated revenue at around $606m and earnings per share of 10 cents.
It added three million monthly active users in the period, ahead of the two million expected taking, the total to 313m.
Guidance for the third quarter is lower than expected, coming in at between $590m and $610m. Wall Street consensus pegged that at $678m.
That revenue growth is its slowest in three years and its worst quarterly growth since becoming a public company.
Why it’s interesting
Twitter's had trouble keeping and growing numbers recently and has failed to emulate the wild and continuing success of its peer, Facebook, while competition from new rivals – Snapchat, Pokemon Go – is vying for people's attention.
Shares have plummeted from the all-time high glory days of $74.73 in 2013. Twitter continued to hit a series of all-time lows in the first half of the year, and while the stock has recovered from its $13.73 low, it's still 17 per cent off where it was at the start of the year.
New features, a cut to headcount, new innovations and attempts to crackdown on the perceived problem with trolling and abuse are just some of the efforts made by boss Jack Dorsey in attempts to turn things around.
Read more: Four things Jack Dorsey's done to try and turnaround Twitter… so far
However, it's received a string of downgrades from Wall Street analysts and there continues to be speculation that it will become a takeover target.
What Twitter said
“We've made a lot of progress on our priorities this quarter,” said Dorsey.
“We are confident in our product roadmap, and we are seeing the direct benefit of our recent product changes in increased engagement and usage. We remain focused on improving our service to make it fast, simple and easy to use, like the ability to watch live-streaming video events unfold and the commentary around them.”
However, in its letter to shareholders on advertising challenges, it said:
"First, there is increased competition for social marketing budgets, which requires us to continuously raise the quality bar on the advertising solutions we bring to market.
"Second, while we have worked to drive higher ROI for advertisers (by leveraging our current user base, ad formats and innovations in targeting, creative and measurement), we’re still priced at a premium CPE relative to others. This has proven to be a headwind in growing Twitter’s share of overall social budgets and in our ability to grow faster in both video and performance advertising."