Following the bell, Twitter announced its third quarter financial performance, including revenue of $569.2 million, and adjusted earnings per share of $0.10. The market had expected the popular social shop to earn $0.05 per share off of a cool $559.6 million in revenue.
Twitter shares are down sharply, following its earnings beat.
Twitter announced that it has 320 million monthly active users. That figure compares to its year-ago tally of 284 million monthly actives, and a sequentially preceding 316 million figure.
Concerns regarding Twitter’s seemingly chronically lackluster user growth has been a key investor concern. Today, the company failed to assuage those concerns. If you were confused why investors are selling Twitter shares like proverbial carb cakes to tree-fellers, that’s the reason.
Twitter has proven a monster when it comes to revenue growth. It’s top line grew 58 percent compared to its year-ago tally. But poor user growth is an inherent discount on future cash flows. And, as you will certainly recall, investors like those.
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The company derived 86 percent of its advertising revenue from mobile usage of its service, a strong figure. Twitter is among the very few companies that has managed to master pulling dollars out of small screens.
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Still, investors’ chief concern remains unabated.
Looking ahead, Twitter predicts that it will have revenue between $695 and $710 million in the current quarter. That fact trails street estimates of $739.7 million by a massive, and painful deficit.
Using normal accounting techniques, Twitter lost $131.7 million in the quarter. Investors have long valued Twitter not on its GAAP metrics, but on adjusted figures to allow for oceans of share-based compensation. Perhaps that will no longer fly given the company’s other issues.
