Post Earnings Coverage as Twitter Reports Revenue Growth of 20 Percent

LONDON, UK / ACCESSWIRE / July 27, 2016 / Active Wall St. announces its post-earnings coverage on Twitter, Inc. (NYSE: TWTR). The company reported its second quarter financial result after the closing bell on July 26, 2016. The social media company forecasted third-quarter revenue below analysts’ estimates. Register with us now for your free membership at: http://www.activewallst.com/register/.

Today, AWS is promoting its earnings coverage on TWTR. Get our free coverage by signing up to http://www.activewallst.com/registration-3/?symbol=TWTR.

Earnings Reviewed

For the quarter ended on June 30, 2016, the San Francisco, California headquartered company reported net loss of $107 million, or $0.15 per share, as compared to the year-earlier loss of $136.7 million, or $0.21 per share. Excluding certain expenses, Twitter reported earnings of $93 million, or $0.13 a share, topping forecasts of a profit of $0.10 per share. Revenue in Q2 FY16 came in at $602 million, up 20%, from $502.4 million in Q2 FY15, thus missing the $606.8 million estimated by analysts. Revenue growth declined for the eighth consecutive quarter.

User Growth Slows

Excluding “SMS fast followers” or users who access Twitter via feature phones, Twitter reported 313 million monthly active users (MAU) in Q2 FY16, a net gain of three million users since Q1 FY16 and 3% increase on y-o-y basis. Average U.S. MAUs totalled 66 million for Q2 FY16 up 1% on y-o-y basis, while average international MAUs were 247 million, up 4% from the year ago period.

Losing to Competition

Twitter appears to be losing favour not just with users, but advertisers as well. In a letter to shareholders, Twitter acknowledged that it is losing the advertising share to rival social-media advertising offerings. It said there is “increased competition for social marketing budgets” and that its premium pricing is hurting its appeal.

Twitter’s on-going struggle comes in stark contrast to Facebook Inc. (NASDAQ: FB), and the latter’s offering such as Instagram and WhatsApp. About 1.65 billion people sign into Facebook each month, while the social network’s WhatsApp and Messenger, have 1 billion monthly active users, moreover its photo-sharing app Instagram recently passed 500 million users. Facebook reported user growth of 15% on y-o-y basis in Q1 FY16.

Efforts to Revive Business

Twitter has unveiled a slew of measures over the past year in order to attract a wider group of people by making Twitter simpler and more appealing to use. The micro blogging site has introduced features for users to find interesting content faster, altered in what counts toward its 140-character limit to let more fit into a tweet, and allowed integration of videos from its live streaming app Periscope into its main app.

Twitter is also angling towards streaming live events to increase the number of users and get a bigger piece of the advertising budget. The company has signed a string of live-streaming deals in the recent period, acquiring rights to broadcast on politics, sports and financial news content. In April 2016, Twitter paid $10 million for the rights to stream National Football League games on Thursday nights. On July 25, 2016, the company announced it would stream games for Major League Baseball and the National Hockey League.

Outlook

Twitter expects to have adjusted EBITDA in the range of $135 million to $150 million and revenue to be in the range of $590 million to $610 million for Q3 FY16. Analysts were looking for $681.4 million in revenue.

Stock Performance

Twitter’s shares saw a correction of 10.89% in after-market trading hours on July 26, 2016 following its earnings release. The stock has declined 1.07% in normal trading hours to finish at $18.45 at the closing bell on Tuesday. The stock has gained 12.23% in the past one month and 3.94% in the past three months.

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