Twitter Inc (TWTR) Dives After Earnings For Stagnant User Growth

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Twitter Inc (NYSE:TWTR) released its fourth quarter earnings report after closing bell tonight, posting adjusted earnings of 16 cents per share, compared to the consensus of 12 cents per share, and revenue of $720 million, compared to the consensus of $710 million.

Twitter shares plunged by as much as 12.35% to $13.13 per share in after-hours trades tonight as the company reported zero user growth quarter over quarter. Year to date, the stock was down by more than 35%, not counting tonight’s stock price movement. Shares seem to keep setting new record lows.

Twitter struggles in user growth

GAAP losses were 13 cents per share, while adjusted EBITDA was $191 million, a 35% increase year over year. Ad revenue climbed 48% year over year to $641 million, with mobile ad revenue making up 86% of total ad revenue. Data licensing and other revenue climbed 48% to $70 million. U.S. revenue increased 47% to $463 million, while international revenue climbed 51% to $247 million.

User growth is also a huge issue. The micro-blogging platform had 320 million users at the end of the year, compared to the consensus of 325 million. Excluding text-only users Twitter had 305 million users, a quarter over quarter decline. At the end of the third quarter, Twitter also had about 320 million monthly active users, which at that time was a quarter over quarter increase of only 4 million. Excluding text-only users, the platform had 307 million users, which was essentially flat quarter over quarter.

Twitter Inc (NYSE:TWTR) has been plagued with an endless stream of problems, including the problem of high turnover among key executives. Recently four top executives left on the same day, highlighting just how precarious a position the micro-blogging platform is in. Meanwhile the platform itself is being struck by calls for its death with the use of trending hashtags like #RIPTwitter.

Twitter updates guidance

Twitter Inc (NYSE:TWTR) management guided for first quarter revenue of $595 million to $610 million and adjusted EBITDA of between $150 million and $160 million. For all of this year, they expect an adjusted EBITDA margin of between 25% and 27%.

For the March quarter, Wall Street was estimating earnings of 8 cents per share and revenue of $629 million. For all of this year, analysts are looking for revenue of $3.1 billion and earnings per share of 55 cents.

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