Well, earnings day clearly didn't go as Twitter planned.
Investors were startled when a web-crawling service called Selerity leaked Twitter's mixed first quarter earnings results an hour early — on Twitter. Shares of Twitter plunged by as much as 6% in late trading Tuesday before the New York Stock Exchange halted the stock. It ended the day down 18%.
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What didn't help matters: Twitter's earnings were less than impressive. The Twitter earnings numbers, which were confirmed to be accurate about 30 minutes later when Twitter hurried out its official report, showed the company missing on revenue estimates for this quarter and falling short for guidance in the upcoming quarter.
Twitter reported revenue of $436 million for the March quarter and projected revenue of $470 million to $485 million for the June quarter. By comparison, the consensus estimate among analysts polled by Thomson Reuters was for $456 million in revenue this quarter and $538 million next quarter.
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Dick Costolo, CEO of Twitter, said in a statement.
"Revenue growth fell slightly short of our expectations due to lower-than-expected contribution from some of our newer direct response products."
The company later characterized the shortfall with direct response products as "growing pains" as it adjusts engagement metrics for advertisers.
On the earnings call that followed, Costolo did not mince words: He admitted the results were mixed and said he was "disappointed" in the revenue numbers.
"We underperformed against our expectations."
The numbers weren't all bad however: as expected, Twitter revealed that it has topped 300 million monthly active users, up from 255 million in the same quarter a year earlier. It's a notable milestone for the company, though one that Instagram passed at the end of last year.
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James Gellert, CEO of Rapid Ratings, said in a statement.
"This market reaction isn’t surprising, Twitter has been saying "trust us" quarter after quarter, continually offering excuses as to why their numbers were down and indicating they had more going on behind the scenes. The market’s tired of trusting a company that’s not delivering."
Selerity and the leak
Selerity claimed to have pulled the numbers directly from Twitter's Investor Relations page, raising concerns about Twitter's handling of its sensitive financial information. Selerity declined to comment to Mashable. Twitter, for its part, appeared baffled and pinned some of the blame on Nasdaq, which operates the company's investor relations website. Twitter is investigating the situation.
Here are the four Selerity tweets that caused panic at Twitter headquarters and a meltdown of nearly 10% in Twitter (TWTR) shares:
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COMMENTARY: It is worth mentioning that although Twitter's monthly active users (MAUs) grew by 18% year-to-year, growth in MAU's has declined consistently since the fourth quarter of 2011 when user growth peaked. That's not too unusual, Facebook's user growth has been in decline since 2008, but nobody seems to care anymore. In the US, where average revenues per user are the highest, Facebooks MAUs grew a palty 2.6% in Q1 2015.
Courtesy of an article dated April 28, 2015 appearing in Mashable and an article dated April 28, 2015 appearing in MarketingLand
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