Apps & Software

Twitter’s Q2 2016 results: user growth continues to flatline

Twitter revealed this week that its quarterly revenues reached $602 million and its monthly active users (MAUs) have grown three percent year over year to a steady 313 million. Adjusted earnings per share totalled $0.13, according to the company.

While these results were within the company’s projections, analysts were expecting revenue to come in at $606.8 million with an adjusted earnings of $0.10 per share.

Overall, the company’s growth has essentially stalled in several areas. Last quarter’s revenue totalled $595 million and the company had 310 million monthly active users. Although Twitter’s second quarter revenues are up 20 percent year over year, the company also experienced a $107 million quarterly net loss. Non-GAAP net income was $93 million.

At the end of Q1 2016, Twitter forecasted Q2 2016 results to fall between $590 million and $610 million. Going into Q3, the company is forecasting the same revenue spread. Once it released its report, the company’s stock plummeted in after hours trading.

At first glance, many don’t know how to feel about these results. While still generating profit, even if at marginally higher rates, it has become clear that Twitter is facing a real obstacle attracting new users. Its second quarter results nearly mimic its first, and it’s projections for the next quarter are more of the same.

It’s important to note that the company’s advertising revenue grew 18 percent year over year to $535 million this quarter, 89 percent of which was mobile-based. Furthermore, mobile users represent 82 percent of the company’s 313 million MAUs.

Twitter CEO Jack Dorsey outlined five objectives for the 2016 year including refining Twitter’s core service, live-streaming video, creators and influencers, safety, and developer. Some of these priorities have already been demonstrated through several moves taken by the company in recent months including the acquisition of Magic Pony Technologies.

In the shareholder letter, Dorsey also went on to describe what the company means to the world today, claiming that world in real-time exists on Twitter.

“Twitter is what’s happening now. Whether it’s breaking news, entertainment, sports, or other everyday topics, seeing what’s happening and watching live events unfold with the conversations around them; that’s the power of Twitter,” Dorsey wrote.

While several initiatives have been launched in attempts to combat these results, such as algorithmic changes, conversations about altering the platform’s 140-character limit, and the many streaming contracts it’s entered into as of late, it’s still too early to track how many of these will affect the bottom line.

As for now, the social giant has its work cut out for them.

RelatedTwitter Q1 2016 results: Twitter’s quarterly earnings increase but fall short of analyst estimates


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