Twitter Revenue Jumps, but Profitability is Still Elusive
The social-network messenger saw revenue climb an impressive 74 percent, but it lost $162 million in the quarter -- 23 percent more than a year ago.
Twitter’s revenue continues to spiral upward, but it has yet to record a profit in nearly nine years in business. The company is still trying to find the right combination to get it into the black and cool off investors at the same time.
On April 28, Twitter posted weaker-than-expected quarterly financial results for Q1 2015, reporting revenue of $436 million, up a whopping 74 percent from $250 million in the same quarter a year ago. However, that figure was well below the $457 million that Wall Street analysts had expected.
Twitter has not seen black ink despite its continuing investments in new data centers and additional sales staff. For Q1 2015, Twitter reported a loss of $162 million, 23 percent more than its previous-year deficit.
Twitter's day was not helped when the press release announcing the financials was posted two hours early on the company's investor relations Web page, which is updated by the NASDAQ stock market. Shortly after noon PST, Selerity, a New Jersey company that continually crawls the Web for financial data, began tweeting Twitter's first-quarter numbers after it found the link to the press release, while the stock was still trading.
Because revenue missed estimates and the company trimmed its full-year guidance to a high of $2.27 billion, down from $2.35 billion, Twitter's stock price took a big hit, dropping about 20 percent before the close of the market.
Twitter's stock was trading at $51.23 just before Selerity began distributing the earnings news in tweets beginning at 12:07 p.m. PST. The stock fell down to $48.35 before it was halted at 12:27 p.m. at Twitter's request. The stock closed at $44.36.
Twitter also rolled back sales forecasts for Q2 to $470 million to $485 million, which also missed forecasts.
Twitter said in its report that 302 million people used its service at least once a month during the first quarter -- up from 288 million in December, and in line with recent trends. Still, the figure failed to impress investors, who have been watching closely for results from recent changes Twitter has made to help newcomers better understand how to use its service.
Twitter also revealed a new advertising partnership with Google, which aims to make its ads easier to buy. At some point later this year, ad agencies using Google's DoubleClick advertising platform will be able to buy ads on Twitter exactly as they do on other sites. Marketers also will be able to use Google Analytics to measure the performance of Twitter ads.
Twitter has consistently been one of the 10 most-visited websites. As of December 2014, Twitter had more than 500 million users, out of which more than 284 million are considered active users.