By Taylor Hall<\/p>\n
Twitter shares plummeted more than 6 percent after investors grew concerned over declining engagement and ad and user growth following the release of the company\u2019s first quarter earnings late Tuesday. <\/p>\n
The company\u2019s net loss widened 22 percent to $162.4 million, or 25 cents per diluted share, from $132.4 million or 23 cents in the year ago period. Analysts had expected a net loss of 24 cents per diluted share. <\/p>\n
Twitter advised investors to reduce expectations for the rest of the year, and warned that user and engagement growth would continue to decline.
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Revenue rose 74 percent to $435.9 million from $250.5 million a year ago, falling short of the analysts’ consensus estimate of $456.2 million compiled by Bloomberg LP. <\/p>\n
Shares of the company were down $2.64 to $39.48 Wednesday afternoon. <\/p>\n
Twitter\u2019s earnings were leaked on Twitter an hour before the company\u2019s scheduled release time by financial analytics firm Selerity Corp. The New York Stock Exchange halted trading so Twitter could publish its earnings, but the shares had already tumbled. <\/p>\n
During the company\u2019s earnings conference call Tuesday, Twitter executives explained that the advertising slowdown was due to the company\u2019s transition to a new advertising model that raises the bar on what counts as engagement. <\/p>\n
\u201cToday, this results in a lower put-through rate and less revenue for Twitter, but higher [return on investment] expected long-term through [the] higher bar,\u201d said Twitter CEO Dick Costolo.<\/p>\n
The company said it will focus on growing its user base and user retention, and seeks to capture the 500 million users who visit the site without logging in each year. <\/p>\n
\u201cThis quarter\u2019s lower-than-expected results and absence of [monthly active user] guide are concerning,\u201d said analyst John Blackledge of Cowen and Co., who lowered FY15 and longer-term estimates for the company\u2019s performance. \u201cThe off-[Twitter] and logged out user opportunity remain nascent, but could be beneficial long-term.\u201d<\/p>\n
Prior to the report, Twitter\u2019s shares climbed 44.5 percent in the past year, compared to the Standard & Poor\u2019s 500 Index, which rose 13.4 percent in that period. <\/p>\n
Costolo said the company was excited to see the growth of \u201crich media\u201d across the platform, including through Periscope, the company\u2019s recently-acquired live-streaming video application. <\/p>\n
\u201cWe saw last night with the events in Baltimore, if you happened to be on Periscope, it\u2019s absolutely riveting,\u201d said Costolo. The CEO advised that since acquiring Periscope in March, the company has seen \u201corders of magnitude increases\u201d in the volume of native mobile video shared to Twitter.<\/p>\n
By Taylor Hall Twitter shares plummeted more than 6 percent after investors grew concerned over declining engagement and ad and user growth following the release of the company\u2019s first quarter earnings late Tuesday. The company\u2019s net loss widened 22 percent to $162.4 million, or 25 cents per diluted share, from $132.4 million or 23 cents […]<\/p>\n","protected":false},"author":132,"featured_media":13728,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[27,436],"tags":[],"class_list":["post-13726","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business","category-spring-2015"],"yoast_head":"\n