Investors traded Twitter Inc.'s stock on Friday when the company reported that user growth had become negative, although its quarterly results exceeded Wall Street's earnings and earnings expectations.
fell 21% during the regular session on Friday, closing at $ 34.13. Before Friday's losses, the stock had gained around 80% this year, while the S & P 500 Index
Stocks suffered from the "nightmare" guidance issued by executives at its Wednesday earnings call, though Twitter's market capitalization loss totaled $ 6.6 billion compared to Facebook's $ 120 billion loss faded. 19659002] Twitter made a profit for the third quarter in a row, with net income of $ 134 million, or 13 cents a share. Adjusted earnings per share were 17 cents. The FactSet consensus estimate was 16 cents. Twitter's revenue jumped 24% to $ 710.5 million, outstripping FactSet's consensus estimate of about $ 2 million.
Even as executives talked about the promising future of Twitter, investors apparently responded to the slowdown in user growth from Twitter going south to $ 1 million to $ 355 million compared to the first quarter of the year.
Previous: Twitter to delete millions of blocked accounts, but CFO says active user numbers will not change
The decline was expected after the company's latest reports cleaned up a million fake accounts day. At that time, Twitter Financial Director Ned Segal tried to minimize the problem.
If we removed 70 million accounts from our reported data, you would hear directly from us. This article shows us how we can improve the quality of service. We look forward to hearing more about our win call on July 27!
– Ned Segal (@nedsegal) July 9, 2018
But on the profit distribution with analysts, Segal said the decline in monthly active users of around 3 million euros were due to the company's efforts to expand its platform Twitter, as a legacy of its earliest days, can be delivered via text messaging rather than on the internet, as well as the General Data Protection Regulation of the European Union, which came into force during the quarter ["HealthInitiatives"byTwitter-thecompany'sjargonfortryingtomaketheplatformfreeofhatespeechbogusaccountsandforeign-languageblunders-AccordingtoCEOJackDorseytheongoingcostofthesocialnetworkisstillhigh
"[Health] is one of those things like security or privacy," said Dorsey in the winning speech, "where companies need to develop and businesses need to stay 10 steps ahead as they learn the dynamics of the network and keep getting better made some significant progress … but there is still much to be done. "
Despite the market's extremely negative reaction to monthly user numbers, some analysts believe that selling stocks after a decline in active users is not the best investor Idea is.  We wrote that a year ago
Why selling Twitter on MAU growth concerns is a bug https://t.co/PyiQdSlye2
Rich Greenfield (@RichBTIG) July 27, 2018  In a 2017 blog post he mentions on Twitter again on Friday, BTIG analyst Greenfield argued that active daily user numbers are a more reliable predictor of the potential revenue of the San Francisco-based company. Twitter stopped reporting the exact daily number of users – Greenfield confirmed that it does not understand why executives do not want to disclose the metric – but daily user growth is the hallmark of people returning to the platform and engaging.
The one daily data point Twitter offers: the daily percentage of active user growth rate. In the second quarter, it was 11% compared to 12% in the same quarter of the previous year.
Do not miss: Did Twitter win the World Cup?
The World Cup contributed $ 30 million to the company's top line, a significant source of revenue and far beyond the $ 24 million it received from the 2014 World Cup. Segal said on the earnings survey with analysts that the World Cup bridged the second and third quarters, even though the company saw more revenue in the first two weeks than the second two weeks.
"We were able to showcase our events and theme infrastructure and also for delivery to advertisers," said Segal. "But all those 30 million are incremental – you'd imagine that these would be ads that appear on Twitter anyway in an environment where we're always promoting advertisers, and some of that would be incremental as we do The conversation around the World Cup on Twitter could have more happen elsewhere. "
Japan proved another high point, and the company said it remains the second largest market for Twitter, with sales of $ 122 million in the second quarter , 65% more than in the same quarter last year. Segal said that, as with many of the company's international efforts, Japan has taught the lessons of the company it has spread around the world: its bookmarking function and increasing the character limit from 140 to 280 characters.
I think our success has lately been with both sides of the ledger, where we have worked and listened hard to the public, but also where we worked well on the agency's side [advertising]. "Segal said." And there is a more concentrated market, and we're starting to see that bear fruit. "