Twitter growth fails to hit estimates amid usage drop
Fears that social network could be overtaken by up-and-coming competitors
- Shares plunged 9% on Tuesday after results and disappointing forecast
- Jack Dorsey returned to CEO position last year with the aim of revamping operations
Updated : 11:08
Twitter appears to be faltering after reporting its slowest growth results since going public in 2013, as shares fell 11% in Tuesday's extended trading.
The company's second quarter revenue fell short of Wall Street expectations and the revenue forecast for the current quarter of $590mn to $610mn was well below the average analyst estimate of $678.18 mn.
User growth has stalled for the microblogging site on the back of increased popularity from competitors such as Instagram and the ever-trendy Snapchat.
Its user base increased by 1% in the quarter, going from 310 million active users to 313 million, as it struggles to keep up with newer, more energetic networks.
One of the company's founders, Jack Dorsey, recently returned to the CEO position in an attempt to reverse its fortunes and it remains upbeat according to a statement released in relation to the results.
“We saw continued increases in engagement, and sequential growth in both monthly active and daily active usage. This growth was driven by marketing initiatives, organic growth and product improvements, including better relevance in both the enhanced timeline and push notifications," the statement read.
On a conference call with analysts, Dorsey reiterated the company's new position as being the place to go for news and live video, distancing the network from traditional sites such as Facebook and Instagram, which have dwarfed Twitter as a social media communication platform.
"We are the place for news and social commentary," Dorsey said on the call with analysts. "At its best, our platform allows people to reach across divides."