Following a meltdown in Facebook, Twitter plummets 18%
Twitter's share price fell as much as 18% in early trading on Friday after the company reported a quarter-over-quarter decline in monthly active users.
The company reported its second-quarter financials as follows, beating on revenue and with EBITDA in line with estimates:
- Revenue: $711 million, up 24% year on year and beating expectations of $696 million.
- EBITDA: $265 million, up from $178 million last year
Twitter blamed the active user decline on new European privacy rules and its decision not to move to paid SMS carrier relationships, and on its efforts to clean up the platform.
Chief executive Jack Dorsey said: "Our second quarter results reflect the work we’re doing to ensure more people get value from Twitter every day.
"We want people to feel safe freely expressing themselves and have launched new tools to address problem behaviors that distort and distract from the public conversation."
Dorsey said daily active users had growth 11%, but the company didn't break out figures.
The company saw strong gains in advertising, with revenue up 23% year on year to $601 million.
Its fees from licensing information out brought in $109 million in revenue, up 29% year on year.
Twitter saw fastest revenue growth in international markets, which now account for half its revenue. Markets outside the US grew 44% year on year to $344 million. The US grew just 10%, and brought in $367 million.
Twitter said its long-term health was more important than immediate growth numbers
In a letter to shareholders, Twitter emphasised the efforts it's making to clean up the "health" of the platform, after ongoing complaints about misogyny, trolling, racism and misinformation.
"We continue to invest in improving the health of the public conversation on Twitter, making the service better by integrating new behavioral signals to remove spammy and suspicious accounts and continuing to prioritize the long-term health of the platform over near-term metrics," the company wrote.
"We are proud of the tangible improvements people are seeing on Twitter. We believe Twitter's value as a daily utility is enhanced when the conversation on the platform is healthy and people feel safe expressing themselves freely and openly."
The company is also trying to tackle accusations of censorship, after Vice News reported it was "shadow banning" Republican accounts. Twitter denied shadow banning, and said the problem was down to a bug that affected "hundreds of thousands of accounts."
Twitter's losses followed 'Facebook Thursday' - a catastrophic day in the history of Facebook. It shares took a hit of 19% - the worst trading day ever for the company. Some $120 billion was wiped off its market value. It was also the biggest loss for a single stock, ever.
The massacre was triggered on Wednesday after the social network posted quarterly results below what Wall Street was expecting — and weaker guidance for the next quarter, too.
A big cause of Wall Street's concern: Facebook's user growth, once the stuff of Silicon Valley legend, is showing signs of stalling out.
Facebook didn't add any daily active users in North America in the past quarter, and saw a decline in Europe.
At the start of trading in New York on Friday, Facebook's share price was still in negative territory.
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