Twitter stock plunges as user growth stalls

It also kept its high-end outlook for full-year revenue at $2.27 billion and bumped up its high-end Ebitda forecast to $540 million.

Twitter blew past Wall Street expectations, reporting second-quarter revenue of $502 million, up 61 percent compared with a year earlier, and well above analyst estimates of $481 million.

Twitter’s share extended losses above 11% at approximately $36.54 after the bell on the New York Stock Exchange. Executives of the company blamed the slowing growth on the complexity of the social network and warned that it was still too hard for the majority of potential users.

Twitter shares finished the day up 5.3% after the company announced revenues above expectations – but the service is still struggling to add users. The numbers were up 2.6 percent to 316 million users, but that missed analysts’ expecations.

San Francisco. Critics have long lamented that Twitter is hard to use and has had trouble defining itself, which is why it has not expanded its audience.

Jack Dorsey, who stepped in as interim chief executive on July 1, said on a call with analysts, that they are not at all satisfied with the results.

“I know this is a trending topic on Twitter around the CEO search, but unfortunately, we do not have an update to provide today”, Dorsey said.

Twitter’s finance chief Anthony Noto said the company did not expect to see “sustained, meaningful growth” of its user base until it reached the mass market.

For Twitter, that could mean a new approach to the way it displays tweets.

Dorsey, in addition to stepping in at Twitter, leads Square, a growing mobile payments company that is rumoured to be planing an initial public offering.

Tuesday’s earnings report call was broadcast on Periscope, the company’s live-stream service for the first time and it was also Dorsey’s first earnings call since taking over the CEO position after Dick Costolo left after five years.

The comments came right after Twitter reported sound second-quarter earnings. “We expect it to take a considerable period of time”. Excluding certain one-time expenses, Twitter posted a profit of $49 million, or 7 cents a share.

“If it’s cheaper, it’s more attractive”, says Wieser, adding that the best outcome for Twitter would be the recognition (whether internally or from an outside buyer) that it will never be a widespread service, something Dorsey mentioned on Tuesday as his goal for the company.