Social media company Twitter Inc. posted on Thursday its fourth quarter 2016 earnings, showing disappointing weak growth over the course of the quarter. Due to this, the earnings miss sent Twitter stock to plunge in the market by 12.34% to $16.41, losing $2.31 from the previous trading session prior to the earnings report.
“While we may not be meeting everyone’s expectations, there’s one thing that continues to grow and outpace our peers: Twitter’s influence and impact. 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,” stated Twitter CEO Jack Dorsey.
The company’s revenue growth was only at 1% to $717 million, from same period last year of $710 million. It also missed analysts’ forecast of its growth to reach $740.1 million or $0.12 per share for the fourth quarter.
Meanwhile, Twitter’s monthly active users increased year-on-year by 4% worldwide to 319 million, 5% internationally to 252 million users, and 3% or 67 million in the United States. The social media company’s daily active users also grew by 11% YoY during the fourth quarter of 2016.
Twitter reported the company’s net loss at $167 million during the quarter versus the $90 million report from a year ago.
Dorsey also said that, “While revenue growth continues to lag audience growth, we are applying the same focused approach that drove audience growth to our revenue product portfolio, focusing on our strength and the real-time nature of our service. This will take time, but we’re moving fast to show results.”
Another disappointment that came to investors and analysts were the adjusted EBITDA guidance for the incoming first quarter of 2017. Twitter announced a new guidance within the range of $75 million to $95 million. This new guidance was below analysts’ estimate of $191.3 million.
The company’s chief operating officer Anthony Noto stated that US President Donald Trump’s constant usage of the social media platform has helped the company gain presence and awareness on the many ways the platform can be used.
However, the president’s continuous usage of the platform did not pay off that much to the company’s recent earnings report. Trump’s usage of the platform has yet to show and take effect to Twitter’s financial statements
Trump has taken it to the social media more often recently his remarks and reactions to several issues taking place in the country. The American president has already addressed various famous individuals, companies, groups, and organization on his official twitter account, some of which were the New York Times, Nordstrom, CNN, famous celebrities, and the like.
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