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Twitter shares plunge on weak revenue guidance
(AP)
Twitter's stock is getting battered, down roughly 18% after a nightmare earnings scenario in which its revenue forecast came in well below Wall Street expectations and its earnings leaked more than 30 minutes early.
The poor numbers and the leak made for a chaotic quarterly earnings day for the company.
Here are some of the key numbers:
Revenue of $436 million, up 74% year-on-year, but below its own forecast and the average analyst estimate of $456.8 million.
Q2 revenue guidance of $470 million to $485 million, well below the $538.2 million expected by analysts.
Full year revenue projected to be in range of $2.170 billion and $2.270 billion, down from the previous forecast of $2.3 billion to $2.35 billion.
Q1 Monthly active users of 302 million, in line with Twitter's forecast and analyst expectations.
Q1 EPS excluding certain items of $0.07, ahead of the $0.04 expected by analysts.
Q1 GAAP Net Loss of $162 million, compared to net loss of $132 million in the year-ago period.
Twitter blamed the revenue shortfall on "newer direct response products," a reference to advertising services created for companies that want to generate immediate sales or traffic through their marketing pitches as opposed to ads designed for general branding puposes. Twitter said it expects the impact to continue through the remainder of the fiscal year.
"It is still early days for these products, and we have a strong pipeline that we believe will drive increased value for direct response advertisers in the future," CEO Dick Costolo said in a statement accompanying the earnings. He said that management remained confident in Twitter's strategy and its long-term opportunity.
Twitter also announced a partnership with Google's DoubleClick to improve ad performance measurement and attribution for direct response marketers. And it announced plans to acquire marketing firm TellApart for an undisclosed sum.
Twitter's Q1 results were due to be released after market close on Tuesday, but research firm Selerity somehow got the numbers early and tweeted out the key figures. Selerity has since tweeted that the numbers were "sourced" from Twitter's Investor Relations website. "No leak. No hack," Selerity said.
Twitter's official Investor Relations account tweeted that it was investigating the source of the leak.
Twitter's stock fell more than 6% before trading in its stock was halted at 3:27pm Eastern Time. Trading resumed at 3:47pm Eastern Time and the stock quickly slipped further.
CEO Dick Costolo has been under pressure to deliver and some Wall Street analysts have in the past speculated that his days at the helm of the company may be numbered. The company's stock has surged 24% in the past three months on expectations that user growth will re-accelerate after a disappointing Q4.
While Twitter came through with new users in Q1 though, its financial performance was way off the mark.
The San Francisco-based social networking firm's service is a favorite among journalists, politicians and celebrities, but there are concerns on Wall Street that Twitter does not have the mass appeal of a Facebook (which boasts more than 1.4 billion users), or of other fast-growing mobile apps such as Instagram and WhatsApp.
Twitter has unleashed a flurry of new products over the past several months, all of which are designed to expand its total number of users and to entice its existing users to spend more time on the service. Among the new offerings are Instant Timeline, which automatically creates a feed with interesting content for new users to peruse, and Periscope, a live-streaming app that Twitter recently acquired.
We'll update this page with more details once earnings cross the wire. Refresh your browser or hit this link.
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