Twitter second quarter results are not as good as last, year, reporting the slowest quarterly growth for three years. There are some reasons for this, mainly the growth of competing social media sites.
Twitter grew by 60% in the second quarter of last year, but only by 20% the same quarter this year to a total of $602 million for the quarter. However, this resulted in a reduced loss for Twitter of $107 million, compared to last year’s $136 million loss. Another important factor is number of monthly active users (MAU) which has increased by 3%. So there is some improvement.
Twitter’s stock fell by over 9% in after hours trading Tuesday, although Arthur Noto, Twitter’s chief financial officer stated that the company was able to sustain growth over time. Much will depend upon Twitter’s competitors who seem to be charging along quite nicely.
Snapchat and Instagram are two of the firm’s major competitors, and both of these seem to be doing well. A tumbling share price will not do much to attract investors, and February’s redesigned home page appears to have little effect this second quarter.
It is possible that April’s partnership with the National Football League, which allows Twitter to stream 10 games in the season, may help attract new users while also retaining existing users. Whether this would be sufficient to cure the company’s problems and attract investors is doubtful. Recent changes in the maximum 140 character count for tweets and changes in the way that tweets are displayed seem to have little impact.
There is little doubt that Twitter is struggling and that the recent return of Jack Dorsey to the board has had little visible effect. However, something must be done, and soon, to attract investors because the current situation cannot be viable over the longer term. Twitter second quarter results are not disastrous, but neither are they encouraging.
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