Twitter revenue growth stalls, users base still weak

Company’s net loss narrows while revenue rises about 20% from a year ago

Twitter reported its slowest revenue growth since going public in 2013 and set a disappointing forecast, fanning concerns that faster growing social media services will make it a niche product.

The microblogging service operator’s shares fell 11 per cent in extended trading to $16.40 (Dh60.18). While Twitter struggles to find a way to boost user growth and win over advertisers, social media services such as Instagram and Snapchat are expanding their footprints.

The company’s net loss narrowed to $107.2 million, or 15 cents per share, in the second quarter ended June 30, from $136.7 million, or 21 cents per share, a year earlier. Revenue rose about 20 per cent from a year ago to $602 million, but missed the analyst estimate of $606.8 million. It was also the slowest revenue growth quarter-to-quarter since its very-hyped initial public offering almost three years ago. Co-founder Jack Dorsey returned to the company as chief executive a year ago, but his plan for reviving Twitter is at best seen as unfinished.

The company’s second quarter revenue missed Wall Street estimates and the revenue forecast for the current quarter of $590 million to $610 million was well below the average analyst estimate of $678.18 million. Twitter’s user base increased about 1 per cent to 313 million average monthly active users in the second quarter from 310 million in the first quarter.

“Clearly, the turnaround is still a work in progress and the question of whether being a platform for a mass audience versus a niche audience needs to be answered,” said James Cakmak, analyst at Monness, Crespi, Hardt & Co.