Twitter (TWTR) has released the financial results for Q2 2016, revealing that it brought on board 3 million new users. The company also generated $602 million in revenue with an earnings per share (EPS) of $0.13. As an aside, this quarter marks the 1 year anniversary since Dorsey resumed control, granted at the time, he was the interim chief executive.
For those interested in what Wall Street was expecting, analysts estimated Twitter would have $606.77 million in revenue and an EPS of $0.10. Some have projected that Twitter would bring in just 2 million new users.
There are now more than 313 million monthly active users on the service, which is up 3 percent from this time last year - international growth has seen a 4 percent increase while U.S. has gone up just 1 percent. Once again, most of the total users are accessing Twitter from a mobile device (82 percent).
Advertising continues to be the main driver of revenue to the company, with $535 million coming in this quarter, an 18 percent increase from last year. 89 percent of that came through mobile advertising, a 1 percent increase from Q2 2015.
Twitter's stock performance hasn't been exceptionally stellar since Dorsey assumed the mantle of power - in the past year, it's down approximately 48 percent.
Shares in Twitter closed the day down 1.07 percent at $18.44. However, investors continue to worry about the company following the company sharing that it expects revenue next quarter to be the same as it predicted for this quarter. In after-hours trading, the stock has gone down 8.78 percent.
Getting back the users
The addition of 3 million users on Twitter comes as the company is trying to work its way back into the hearts and minds of internet users. When Dorsey assumed control as interim CEO, there were 316 million monthly active users, but growth had been slowing down for a while. Twitter said it added just 4 million users the following quarter, but in Q4 2015, there was no growth for the first time.
It wasn't until April when the company announced that it had started to grow again, bringing on board 5 million new users.
As Twitter continues to make efforts to turn itself around, it hasn't lessened the noise coming from pundits that are suggesting that time as an independent company (or worse) is running out. Earlier today, Carnegie Mellon professor Vivek Wadhwa suggested that Twitter was “toast”, largely due to the lack of user growth: “It's losing momentum…I'm not optimistic about Twitter overall. Some short-term gimmicks, maybe, but long-term it's toast.”
Former Yahoo CEO Ross Levinsohn also opined about Twitter earlier this month, days before his former employer wound up selling to Verizon for $4.83 billion. “I don't see a chance that this [Twitter] is an independent company in 24 months,” he said.
Undeterred, Twitter recently launched a new marketing campaign aimed at explaining what it is to the general public.
See what's happening: https://t.co/ChbWRrSJyKhttps://t.co/r9AZd9rzI3
- Twitter (@twitter) July 25, 2016
Live events and video are the key
Twitter has been working furiously to show that it's more than just about a tweet, but more about a real-time conversation taking place worldwide. A big part of that involves video and livestreaming and in the past few months, the company has landed notable media partnerships, securing livestreaming rights with Major League Baseball, the National Hockey League, the Pac-12 broadcast network, and the National Football League.
Other efforts to showcase its ability to be about live events include partnering with CBS News to air non-stop coverage from both the Republican and Democratic National Conventions this year.
Indirectly, it saw a prime use case of how its Periscope service last month when members of the U.S. House of Representatives aired a sit-in in protest over gun control laws not being voted on. Speaker of the House Paul Ryan had instructed the cameras in the congressional chamber be turned off, but Democratic representatives turned to Periscope.
Kayvon Beykpour, Periscope's CEO, said at the time: “Today is an example of what drives us. Twitter and Periscope take you where other cameras don't - letting you experience breaking news through the eyes of those living it.”
Other improvements to Twitter include increasing the duration of videos that can be uploaded to the service, launching a dedicated app for influencers, celebrities, and verified users, adding searchable stickers in photos, debuting an app for businesses to manage their social media presence on the site, and eliminating photos and usernames from the 140-character limit.
Harassment persists
But while the company is working on making itself more relevant to users, critics are chastising it over a lack of safety and constant harassment some face, such as “Ghostbuster's” actress Leslie Jones who briefly left the service following claims of racism and other bullying took place. Twitter seemingly acted swiftly, shutting down some of the offending accounts and even banning for life Breitbart News editor Milo Yiannopoulos.
However, there are those who still view the service as an unsafe place and even reporters have deleted their accounts. In the company's shareholder letter, Twitter said “We, along with the broader industry, have a lot more work to do in this area, but we're committed to continuing to develop tools that will help keep Twitter, Periscope and Vine safe and open for people to connect in real time.”
We'll see what Dorsey has to say about the matter during the company's earnings call later today.
This is developing. Please refresh for updates.
Twitter reports 3 million new users, $602 million in revenue 1 year after Dorsey's return
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