Twitter still struggling to grow as rivals race ahead

Revenue forecast for the current quarter also came in below estimates.

Twitter (TWTR) this afternoon reported Q2 revenue that missed analysts’ expectations, and profit that beat, and offered a much-lower-than-expected Q3 outlook, sending its shares lower by 9%.

Excluding items, the company earned 13 cents per share, topping the average analyst estimate of 10 cents.

Twitter’s ad revenue rose 18 percent to $535 million, and mobile accounted for 89 percent of the total. Nonusers, analysts have observed, do not understand what they can gain from joining Twitter, versus other social networks like Facebook and photo- and video-sharing app Snapchat, which recently overtook Twitter in daily users. That represents an addition of 3 million users since the end of the first quarter.

Dorsey, a Twitter co-founder who has been back in the CEO seat since July past year (in an interim capacity until he was named permanent CEO in October) continues to face investor questions about how he will boost the company’s sluggish user growth.

More significantly for investors, the number of monthly active users edged up to 313 million, up three percent from a year ago and only slightly more than the 310 million in the past quarter.

Twitter forecasted current quarter revenue of $590-$610m, well below the average analyst estimate of $678.18m. Moments, for example, launched past year as a hub for a curated selection of tweets about breaking news, large events and other conversation starters.

Today is the day of Twitter’s quarterly earnings report, which is Twitter’s chance to explain to the world – and investors – why it isn’t a financial failure. “We are confident in our product roadmap, and we are seeing the direct benefit of our recent product changes in increased engagement and usage”.

Premium ad pricing, compared with some rivals, has “proven to be a headwind” for efforts to increase Twitter’s share of social media marketing budgets, the company said in a letter to shareholders.

“We, along with the broader industry, have a lot more work to do in this area, but we’re committed to continuing to develop tools that will help keep Twitter, Periscope and Vine safe and open for people to connect in real time”, Twitter said in a statement. At this point – with the Democratic convention underway and the Olympics kicking off next month – the company’s streaming video ambitions are the only bright spot it has to highlight. The company would only say that it has “sold through a meaningful percentage of the available ad inventory for the upcoming season” but added that advertisers like Anheuser-Busch, Sony and Verizon have already inked deals.