Twitter shares tumble as flat user growth disappoints investors
The Twitter logo is displayed on a screen on the floor of the New York Stock Exchange (NYSE) in New York City Photograph: (Reuters)
Twitter shares tumbled in premarket trading on Thursday after the social media platform reported weaker-than-expected growth in monthly active users in the second quarter.
Amid fierce competition from Facebook and Snapchat, Twitter's average monthly active users (MAU) was 328 million in the three months through June 30. Analysts were expecting 328.8 million, according to financial data and analytics firm FactSet.
In the first quarter, the company had reported that it added 9 million more monthly active users than expected.
"What matters is MAU. Overall MAU were flat, and US MAU was down," said Michael Pachter, managing director at Wedbush Securities.
Monthly active users, a key performance indicator for social networking services, is typically calculated by tabulating the number of users who have logged in and logged out during the 30-day period.
Twitter's second-quarter net loss widened as it took a $55 million impairment charge and revenue fell 4.7 per cent.
The company has been trying to boost revenue through live streaming deals but suffered a setback in April when it lost a deal to live stream NFL games this year to Amazon.com.
Advertising revenue fell 8 per cent to $489 million but well exceeded the $458.1 million estimate.
The company's net loss widened to $116.5 million, or 16 cents per share, in the second quarter ended June 30, from $107.2 million, or 15 cents per share, a year earlier.
Excluding items, the company earned 8 cents per share.
Revenue fell about 4.7 per cent to $573.9 million, the second time it has fallen since Twitter's debut in 2013.
Shares of Twitter fell 8.4 per cent to $17.96 in premarket trading on Thursday, following a gain of 18 per cent in the past three months.