The stock price of Twitter Inc (NYSE: TWTR) suffered a huge decline after reporting disappointing revenue growth for the fourth quarter of its fiscal 2016. TWTR shares were down more than 12% to $16.41 a piece on Thursday.
The microblogging company posted total revenue of $717 million, a 1% increase from $710 million in the same period a year ago. It was the weakest revenue growth since its initial public offering (IPO) in November 2013.
Its advertising revenue was $638 million, down from $641 million in the year-ago quarter. The company said its mobile ad revenue was 89% of total ad revenue. Its data licensing and other revenue were $79 million, up by 14% year-over-year.
Twitter recorded non-GAAP net loss of$167 million or -$0.23 per share and $119 million or $0.16 per share non-GAAP net income.
Wall Street analysts expected the microblogging company to report earnings of $0.12 per share in $710 million in revenue, according to data compiled by Thomson Reuters.
During the company’s conference call with analysts and investors, Twitter CEO Jack Dorsey said, “It will take the time to show the results we all want to see. We’re moving forward aggressively. The whole world is watching Twitter.”
Twitter monthly active users (MAUs)
The microblogging company’s monthly active users increased to 319 million from 317 million in the previous quarter. Its average MAUs in the United States were 67 million, and international users were 252 million. Twitter’s mobile MAUs represented 83% of its total MAUs.
Twitter CFO Anthony Noto told analysts that the company is seeing “new users, resurrected users, and improvement in retention.” He added that the time spent by users on the social network increased.
“Were focused on driving value across three key areas of our service: audience, content, and revenue,” according to the company in a letter to shareholders.
Analyst says Twitter has no growth story
Wedbush Securities analyst Michael Pachter was disappointed with Twitter’s user base. He said, “There isn’t a growth story here. They have to convince advertisers that they will reach an expanding audience.”
He also noted that President Donald Trump, who frequently uses Twitter and has millions of followers, have no impact. Pachter said, “The shocking part is that the Trump effect was zero. Their growth actually slowed during the quarter.”
Meanwhile, Steve Ballmer, the former CEO of Microsoft Corporation (NASDAQ; MSFT) and a Twitter investor commented, “Running two companies is not the best idea,” during an interview with CNBC. Dorsey also serves as CEO of Square (NYSE: SQ).
Ballmer still believes that Twitter offers a valuable service, but its needs to make more progress. He remains confident in the microblogging company.
Twitter expected its adjusted EBITDA to be between $75 million and $95 million, adjusted EBITDA margin to be around 17% to 17.5% for the first quarter of its fiscal 2017. SBC to be around $125 million to $135 million.
For the full fiscal 2017, the company expected its non-GAAP expenses to be flat or decline by around 5%. SBC to fall around 15% to 20% and capital expenditures to be between $300 million and $400 million.
The company’s adjusted EBITDA in the fourth quarter was $215 million while its adjusted EBITDA for the full fiscal 2016 was $751 million.
“As previously stated, we expect advertising revenue growth to continue to lag that of audience growth in 2017,” according to Twitter.
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