Twitter Inc. beat analysts' estimates for first-quarter earnings and showed signs that it has finally broken down, but the impending turnaround was curbed by a slow-growth outlook this year.
The social media company is pushing for live video and more personalized content seems to be paying off, driving revenue and profits in the first quarter by attracting users and advertisers. Sales jumped 21 percent, the highest in two years, to $ 664.9 million, the company reported . Twitter, originally known for its 1
The company nonetheless said in a letter to shareholders on Wednesday that it will be difficult to match last year's growth rates in the second half of this year, and therefore the pace of revenue growth will be similar to that of 2016.
Shares were initially defaced On the first trading day, when the results were first published, they rose by as much as 14 percent and then gradually slipped away following comments on an analyst call for growth prospects. The stock fell 7.7 percent, dropping 3.9 percent to $ 29.29 in New York at 10:28, along with another decline in benchmark indices.
"Twitter is still building credibility with investors and advertisers So it's important that they continue to show momentum relative to expectations," said Richard Greenfield, an analyst at BTIG. "They continue to position themselves so that expectations do not get out of control."
On the way to winning, these expectations were already high. An increasing number of analysts began to see the company stabilize after a few years as they battled with Facebook Inc. and Google's YouTube to compete for ad prices. With Twitter reporting a third quarter in October, its stock has been booming and has been revalued by at least eight analysts.
But there are still big mistakes. Monthly user growth was only 2.8 percent up on the previous year, the slowest in two years. Unlike Facebook, which has six times more users than Twitter and its monthly user numbers in the fourth quarter has increased by 14 percent. Facebook Reports Profit Wednesday Afternoon
There are still clouds in Twitter's Silver Strip: Gadfly
And more of Twitter is now growing from international markets as the US saturates. Monthly active users in the US increased $ 1 million to $ 69 million from the fourth quarter. Internationally, MAU grew from 262 million to 267 million users. Sales in the US rose 2 percent year-on-year, while international sales grew 53 percent.
Chief Executive Officer Jack Dorsey, who also runs the Square Inc. mobile payment platform, has focused on making Twitter more useful Including streaming programs such as National Football League highlights and retrospectives on series such as "Game of Thrones". The company applies artificial intelligence to the most relevant tweets at the top of users' feeds, and adds features that curate tweets, photos, and videos around events. Twitter said daily active users rose 10 percent in the recent period, marking the sixth straight quarter of double-digit increases. The company does not give a total number for DAUs.
Dorsey has sharpened the platform into a place to see "what's happening now" and positioned the site as a place to catch up on live events with news about concerts.
The reputation of the Twitter brand has also been boosted by the frequent tweets of celebrities such as US President Donald Trump, who is among the platform's most prominent users, and global events such as the Olympics and government elections are fueling growth
And since Twitter has been working to wipe out terrorist content and abusive trolls, advertisers' ideas about the platform are improving, according to a study by RBC Capital Markets and Ad Age.
"Twitter's video ad product continues to perform well as advertisers continue to look for high-quality online video impressions," wrote Morgan Stanley analyst Brian Nowak, a longtime Twitter bear who shares most recently upgraded to the same weight week, citing improved personalization that keeps users on Twitter for longer.
Twitter posted net income of $ 61 million, or 8 cents a share, in the first quarter, marking its second quarter profit according to generally accepted accounting principles. Compared to analyst forecasts for a net loss of 2 cents on average. The profit, excluding some costs, was 16 cents per share, exceeding estimates for 12 cents.
The Company released $ 245 million in adjusted earnings before interest, taxes, depreciation and amortization for the second quarter to $ 265 million. Analysts estimate $ 218 million.
Bloomberg LP produces TicToc, a global news network for the Twitter service.
While Twitter seems to have found a way for growth, Dorsey is urged to follow in the footsteps of Facebook CEO Mark Zuckerberg and testify before the US Congress on privacy. Twitter, Facebook and Google are facing calls for a possible regulation of Internet companies, after the political consultancy Cambridge Analytica had identified private data from 87 million Facebook users. Twitter itself was overrun by Russian bots during the 2016 US election cycle.
Twitter further criticizes that it has not done enough to combat the spread of misinformation, harassment and manipulation through automated posts. Last month, Dorsey asked the public to propose solutions to make the social network a better place by measuring "collective health, openness and courtesy of public conversation". Twitter works at a "transparency center" to show how much political advertising campaigns are, and the company approved the [Honourse Ads Act] Senate Bill, which subjects online political ads to the same disclosure rules that similarly govern content on television and radio ,
Twitter said it limited the ability of users to conduct coordinated actions across multiple accounts, resulting in about 90 percent fewer users creating fake or automated promotions through the TweetDeck social media dashboard. In the first quarter, the company said it has removed more than 142,000 applications associated with Twitter that violate developer rules, and together accounted for more than 130 million "inferior" tweets over the same period.