Twitter shares tumble on weaker-than-expected user growth
New York/Bengaluru: Twitter Inc. shares tumbled in pre-market trading on Monday after the social media platform reported weaker-than-expected growth in monthly active users in the second quarter.
Amid fierce competition from Facebook Inc. and Snap Inc.’s messaging app Snapchat, Twitter’s average monthly active users (MAU) was 328 million in the three months through 30 June. Analysts were expecting 328.8 million, according to financial data and analytics firm FactSet.
In the first quarter, the company had reported that it added 9 million more monthly active users than expected.
“What matters is MAU. Overall MAU were flat, and US MAU was down,” said Michael Pachter, managing director at Wedbush Securities.
Monthly active users, a key performance indicator for social networking services, is typically calculated by tabulating the number of users who have logged in and logged out during the 30-day period.
Twitter’s second-quarter net loss widened as it took a $55 million impairment charge and revenue fell 4.7%.
The company has been trying to boost revenue through livestreaming deals, but suffered a setback in April when it lost a deal to livestream NFL games this year to Amazon.com Inc.
Advertising revenue fell 8% to $489 million, but well exceeded the $458.1 million estimate.
The company’s net loss widened to $116.5 million, or 16 cents per share, in the second quarter ended 30 June, from $107.2 million, or 15 cents per share, a year earlier.
Excluding items, the company earned 8 cents per share.
Revenue fell about 4.7% to $573.9 million, the second time it has fallen since Twitter’s debut in 2013.
Shares of Twitter fell 8.4% to $17.96 in pre-market trading on Thursday, following a gain of 18% in the past three months. Reuters