Although it added three million users, the not-so-promising second quarter earnings results led to the shares of micro-blogging site Twitter tumbling which wiped out nearly 10 percent from its share price in after-market trading. The company posted quarterly revenue of $602 million, up 20 percent year-over-year and reported $107 million GAAP net loss ($0.15 per share) with quarterly non-GAAP net income of $93 million ($0.13 per share). Also Read - Explained: Can Twitter get banned in India?Also Read - Twitter vs government: Twitter India loses legal protection for not complying with IT rules on time
A year ago, the year-over-year growth was 61 percent and two years back, it was a whopping 124 percent. The average monthly active users (MAUs) were 313 million for the quarter, up three percent compared to 310 million in the previous quarter. “We’ve made a lot of progress on our priorities this quarter. We are confident in our product roadmap and we are seeing the direct benefit of our recent product changes in increased engagement and usage,” Jack Dorsey, Twitter’s CEO, said.
“We remain focused on improving our service to make it fast, simple and easy to use, like the ability to watch live-streaming video events unfold and the commentary around them,” he added. Advertising revenue totaled $535 million, an increase of 18 percent year-over-year and mobile advertising revenue was 89 percent of total advertising revenue. Data licensing and other revenue totaled $67 million, an increase of 35 percent year-over-year. According to Twitter, it expects revenue of about $590 million to $610 million in the third fiscal quarter of 2016 — far lower than the $678 million analysts expected Twitter to forecast.
The disappointing forecast led Twitter stock to take a steep dive, The Verge reported. While US revenue totaled $361 million — an increase of 12 percent year-over-year, international revenue totaled $241 million — an increase of 33 percent year-over-year — for Twitter in the second quarter.”This quarter we saw year-over-year and sequential growth in both monthly active and daily active usage,” added Anthony Noto, Twitter’s CFO.”We continue to believe that, with disciplined execution against our priorities, we can drive sustained engagement and audience growth over time. We also have exciting momentum with live-streaming video initiatives underway,” he added.
The micro-blogging website is now looking at the video and news streaming space to revive its fortunes. It has signed a deal with Bloomberg Media to live stream several media company’s TV news shows on Twitter platform. The partnership includes streaming rights shows like “Bloomberg West”, “What’d You Miss?” and “With All Due Respect”, along with the network’s daily stock market coverage. It is known that Twitter will make money from advertising when it will stream 10 NFL games later this year. Last week, Twitter streamed live Wimbledon coverage. Twitter is also in talks with the NBA, Major League Soccer (MLS) and Turner for more streaming rights.