Twitter Inc reported lower-than-expected revenue for the first quarter, hurt by weaker than expected spending by big advertisers, and the microblogging service forecast current-quarter revenue well below analysts’ expectations.
Twitter shares plunged 12.3 percent to $15.58 in extended trading on Tuesday.
Twitter’s user base grew modestly to 310 million monthly active users in the quarter ended March 31 from 305 million in the fourth quarter, above analysts’ expectations. Yet investors were disappointed by Twitter’s revenue miss since outlining a turnaround plan.
“It’s obvious Twitter is having trouble,” said Arvind Bhatia, analyst with CRT Capital. “It’s not growing anywhere close to where people expected a while back.”
Twitter has struggled with stagnant user growth as its complicated interface makes it less attractive to new users.
As part of its turnaround plan, the company has emphasized its live offerings, including live commentary and video streaming through its Periscope app, to attract new users. But it faces fierce competition from Facebook Inc, which has recently ramped up its live video product, Facebook Live.
Twitter said it was optimistic that its new product offerings, including a refined algorithmic timeline and live video improvements, would continue to attract new users and improve engagement on the site.
“We remain focused on improving our service to make it fast, simple and easy to use,” Chief Executive Jack Dorsey said in a statement.
The company forecast revenue of $590 million to $610 million for the second quarter. Analysts on average were expecting $677.57 million, according to Thomson Reuters I/B/E/S.
First-quarter revenue rose 36 percent from a year earlier to $594.5 million, but widely missed the average analyst estimate of $607.8 million.
Its net loss narrowed to $79.7.million, or 12 cents per share, from $162.4 million, or 25 cents per share, a year earlier.
Excluding items, Twitter earned 15 cents per share, beating the average estimate of 10 cents.