Twitter’s stock plummeted more than 15% after the social media firm missed on usage growth in the first quarter and forecasted lower sales growth in the future.
After market close on Thursday, the company reported that its average monetizable daily active users increased 20% year over year to 199 million, compared to analysts’ expectations of 200 million. Despite the poor user growth numbers, Twitter exceeded sales and earnings goals, albeit not nearly enough to satisfy investors.
Twitter posted first-quarter sales of $1.04 billion, up 28% from $808 million a year earlier, when the pandemic started to wreak havoc on corporate earnings. Twitter earned $68 million in the third quarter, up from a loss of $8.4 million a year earlier.
Twitter delivered another setback to market sentiment when it released second-quarter forecasts that fell short of expectations.
The business stated that it anticipates sales of between $980 million and $1.08 billion in the second quarter, compared to analysts’ expectations of $1.06 billion.
Twitter CEO Jack Dorsey also provided some insight into how the organization views content moderation during a conference call with analysts. The company has come under fire for suspending accounts, including The Post’s, and restricting the reach of stories it finds to breach its laws. Though some argue that it has struggled to describe its platform rules clearly.
Dorsey said that the company needs to empower users to participate in content moderation because he believes Twitter should not be “the arbiter of all these things.”
“It should be all about crowd wisdom, and we’re attempting to strike that balance,” he said.
The earnings provided investors with their first look at how the business could operate in the absence of former President Donald Trump, who was barred from the network following the Jan. 6 Capitol riots.
Trump used Twitter more than any other elected official, often in an unmoderated manner that some attribute to Twitter’s recent development.