Twitter today posted its worst quarterly revenue growth since becoming a publicly traded company back in 2013.
The microblogging company’s shares plummeted to a four-month low on news that Twitter’s quarterly revenue of $717 million was an increase of only one percent year-over-year — and a failure to meet Wall Street’s expectations of $740 million. Twitter’s advertising revenue — 89 percent of which was mobile advertising revenue — came in at $638 million, down slightly year-over-year.
“While we may not be meeting everyone’s growth expectations, there’s one thing that continues to grow and outpace our peers: Twitter’s influence and impact,” CEO Jack Dorsey said in a conference call with analysts. “It’s the reason we’re all here fighting so hard for the service and company we love. It’s been hard, it will continue to be hard, and it’s all worth it. Twitter forever changed the way the world communicates, and we will do it again.”
Total revenue for 2016 came in at $2.5 billion, an increase of 14 percent year-over-year and a net income of $406 million, or $0.57 per diluted share while average daily active usage grew 11 percent year-over-year. That is an acceleration from seven percent in the third quarter, five percent in the second quarter and three percent in the first quarter of 2016.
For the first quarter of 2017, Twitter is forecasting earnings of be between $75 million and $95 million.
Twitter chief operating officer Anthony Noto said advertising revenue growth will “continue to lag audience growth due to the sales cycle, and could be further impacted by the escalating competition for digital advertising spending and our efforts to re-evaluate our revenue product feature portfolio.”
“We will continue to increase the value we provide advertisers by simplifying and differentiating the portfolio and improving the engagement and measurement of our products,” he added. “We are confident that this path will return us to long-term revenue growth.”