Twitter falls on stalled user growth, forecast

New CEO Jack Dorsey, who helped found Twitter, was brought on to try to help Twitter deal with its stagnating growth, and the resulting inability to boost revenue.

Twitter’s third-quarter net loss was $US131.7 million, compared with $US175.5 million a year earlier.

But Twitter did manage to beat its financial guidance, with revenue clocking in at $569 million – a 58% increase over a year ago.

Analysts and market watchers had expected the company to report 5 cents per share on $559.6 million in revenue. That means Twitter only added 4 million active users for the entire quarter, having ended its Q2 with approximately 316 million MAUs worldwide. Excluding SMS Fast Followers, MAUs totaled 307 million for the third quarter, up 8% year over year, and compared to 304 million in the previous quarter. The company said it expects fourth-quarter revenue of between $695 million and $710 million, below the FactSet consensus of $741 million. He has already given back over 15 million shares to both Square and the charity foundation, he said.

Twitter’s stock plunged in after-hours trading on Tuesday after reporting a weak forecast for the fourth quarter and lagging user growth. Dorsey said Moments is a big leap for Twitter, away from its chaotic, reverse chronological main feed that confuses many people.

Here’s the bad news – user growth is stagnant. The feature is Twitter’s big answer to make the service more appealing and less confusing to new users by finding interesting tweets for them.

This was Dorsey’s first earnings call since returning to the company as permanent CEO earlier this month.

Shares in Twitter closed up 1.46 percent at $31.34 for the day.

Advertising revenue was expected to come in at $503.3 million, according to StreetAccount. It’s clear that while Twitter is successful at earning more money (likely due to new ad opportunities), it’s still struggling at attracting new users across its different products.

Twitter posted better-than-expected earnings for the quarter, but its user growth disappointed investors.

One of the most controversial moves made by Dorsey, was cutting 336 jobs, or 8% of Twitter’s global workforce, in the first mass layoff in Twitter’s entire history.

“We’re still hiring and investing in talent in ways that specifically serve our priorities”, Dorsey said on the conference call after the earnings report from the company he co-founded in 2006. A new, pilot partnership with Google will see Twitter use the search giant’s DoubleClick technology to gather more data on consumers and upgrade its targeted advertising capabilities.