This is Why Twitter Shares Sank After its Earnings Report

Social media platform Twitter reported its financial results on Thursday and share prices took a nose dive as a result. Shares fell over 11% in extended hours.

The company may have reported some stellar numbers in revenue, but monetizable daily user growth didn’t come in as expected nor did guidance.

For the first quarter, Twitter reported revenue of $1.04 billion, which was a growth of 28% from the $808 million in the year ago quarter. This also beat the $1.03 billion forecast by Refinitiv.

Those gains reflected “accelerating year-over-year growth in MAP revenue and brand advertising that improved throughout the quarter,” says Chief Financial Officer Ned Segal. “Advertisers continue to benefit from updated ad formats, improved measurement, and new brand safety controls, contributing to 32% year-over-year growth in ad revenue in Q1.”

Earnings per share was 16 cents adjusted, compared to the 14 cents that was forecast by Refinitiv.

Total number of monetizable daily users has grown 7 million from the fourth quarter to 199 million but was below the 200 million that had been expected, per FactSet.

Twitter ad revenue grew 32% year over year to $899 million with total ad engagement growing 11% over the same period.

This was the first quarter where the platform did not have the presence of former President Donald Trump. Trump had been removed from the service following the Jan. 6 insurrection at the U.S. Capitol.

Looking ahead, Twitter has guided for revenue in the range of $980 million and $1.08 billion for the second quarter. Analysts were expecting guidance of $1.06 billion on average, per Refinitiv.

Disclaimer: We have no position in any of the companies mentioned and have not been compensated for this article.