Twitter Tumbles in Second Quarter with Stalled User Base

Jack Dorsey

Twitter failed to add any users on a monthly basis in the second quarter, compared with the first quarter, amid fierce competition from Facebook and Snap Inc's fast-growing messaging app Snapchat.

Though its monthly audience failed to grow, Twitter said there's room for optimism because 12% more users are visiting the site on a daily basis than in the same quarter past year.

Twitter's net loss widened to $116.5 million, or 16 cents per share, in the second quarter ended June 30, from $107.2 million, or 15 cents per share, a year earlier.

Maybe Americans are sick of political Twitter, or maybe they're just exhausted of the constant feed of news. Analysts were expecting 328.8 million, according to financial data and analytics firm FactSet. Arguably worse, Twitter's quarterly revenue has started to drop for the first time in its history.

After a short-lived President Trump-fueled bump in monthly active users, investors are left searching for the next catalyst for Twitter's user growth.

Twitter beat analysts' expectations on EPS (non-GAAP) at 12 cents per share, compared to a predicted 5 cents per share.

But Twitter also said that it doesn't expect its overall sales growth to improve in the second half, citing "headwinds" related to products it's de-emphasizing. Twitter is rapidly trying to roll out products that will help make the service better, like trying to curb harassment and making the service easier to use with algorithmic feeds.


"Our focus has been on daily active usage", Anthony Noto, Twitter's chief operating officer, said on the call.

The company said it expected adjusted underlying earnings (EBITDA) will be between US$130mln and US$150mln in the third quarter.

The Motley Fool owns shares of and recommends Twitter.

Twitter experienced a net loss of $116.5 million in the second quarter, greater than the $107.2 million it lost in the same quarter previous year. In part from these numbers, Twitter shares opened trading Thursday down around 13 percent at $17.39 per share.

Twitter has made several efforts to attract more users, including merging some features to streamline discoverability and making various UI refinements.

The company has been trying to monetize the platform although advertising revenue fell 8 per cent to $489m and it lost a deal to livestream National Football League games to Amazon.

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