Trump tweets don't help: 1st Twitter revenue drop since IPO
- Author: Rita Burton Apr 27, 2017,
Apr 27, 2017, 2:16
Shares of Twitter Inc jumped on Wednesday after the microblogging service reported better-than-expected user growth in the first quarter, although its revenue fell for the first time. But Twitter showed signs of new life in the first quarter, reporting that average monthly active users rose six per cent from previous year to 328 million.
The net loss narrowed to $62 million from $80 million a year earlier for Twitter, which has never reported a profit.
Twitter shares were 12% up in pre-market trade after its latest results beat expectations - highlighting its strongest user growth for more than a year.
Shares in Twitter are now trading at $16.02 after beginning the day around the $14.68 mark. "In Q1, we continued to streamline and simplify our revenue products, communicate to advertisers the success we're seeing with accelerating audience growth, build new revenue product features, and reallocate resources to our highest revenue-generating priorities". The company said it has made time lines more relevant to the user, in addition to updates including removing user names from the 140-character count and showing participant names in conversations. During the period, the social giant said it added about 9 million new users - making it the biggest quarterly bump in years.More news: Moto X (2017) leak adds in a 4GB RAM variant
Twitter's advertising revenue fell 11 per cent to $US474 million in the quarter, above the average analyst estimate of $US442.7 million, according to market research firm FactSet StreetAccount.
Shares of Twitter surged in early trading Wednesday after beating Wall Street estimates with its first quarter results and posting larger growth in users. In March, for example, the company said that it would use an algorithm to eliminate abusive accounts and to allow users to mute keywords, phrases or full conversations.
Twitter says that Trump is not the only reason Twitter growth improved last quarter. Still, it expects revenue growth to "meaningfully lag" audience growth for the rest of the year.
Nevertheless, the company still remains behind competitors such as Facebook (NASDAQ:FB), Instagram and Snapchat with regards to performance and user activity. Earnings, adjusted for one-time gains and costs, were 11 cents per share.