Turns out Twitter is its own worst enemy.
The social media company, which is already struggling against investor doubts about its meager growth, saw its share price plunge today after its latest earnings results leaked in a tweet.
Selerity, a data science company that hunts for the online addresses of earnings releases based on past URLs, posted Twitter’s first quarter earnings results to Twitter well ahead of the company’s planned release of the figures. The less-than-stellar results sent Twitter’s stock down more than 18 percent by the market’s close.
During the company’s earnings call, a representative said Nasdaq manages Twitter’s investor relations site. Twitter stopped short of accusing the stock exchange of botching the release but said it had instructed that the earnings numbers not be posted until the market’s close. Twitter said it is still investigating the matter.
Regardless of when the results came out, they weren’t great. Twitter posted a big miss on revenue in spite of the company’s launch of new products and features meant to attract more users. In the first quarter, Twitter’s revenue rose 74 percent to $436 million, but missed analysts’ expectations for $456.5 million. The company averaged 241.6 mobile monthly active users---a key metric---missing an expected 243 million.
"Revenue growth fell slightly short of our expectations due to lower-than-expected contribution from some of our newer direct response products,” Dick Costolo, Twitter’s CEO, said in the company’s news release.
Now a little over a year after the company began publicly trading its stock, Twitter continues to face intense pressure from investors to have its revenues catch up with its perceived cultural value and compete with other social networks. Recently, the company rolled out new tools to make its service more accessible to new users, including giving strangers the ability to direct-message each other; adding options like an auto-filling Instant Timeline for Android users; and surfacing the most popular tweets that a user may have missed from their feeds.
In some ways, the tactics have worked: the number of Twitter’s total monthly active users rose to 302 million for the first quarter, up 18% from the same period a year ago. Last quarter, Twitter reported adding just 4 million new users, the smallest jump in quarter-over-quarter growth for the company so far. Costolo promised investors the company would rebound in this past quarter, which it did accomplish—amounting to a small win for Twitter. Twitter’s first quarter adjusted earnings also came in at 7 cents per share, beating analyst estimates of 4 cents per share.
Anthony Noto, Twitter’s CFO, admitted, however, that user growth has not been looking up so far in the second quarter of 2015. “We’re off to a slow start in April,” he said on the earnings call. Perhaps in part to help boost those numbers, Twitter says it will start counting some of their SMS-only users from emerging markets in its monthly active user count. Those were not counted in the 302 million figure cited for the first quarter, the company said.
Some of Twitter’s acquisitions have brought returns. On the earnings call, Costolo emphasized the power of native mobile video on the microblogging service, and said Twitter was especially well-positioned in the space. He cited the success of Periscope, the live-streaming app Twitter bought earlier this year for a reported $100 million, and called broadcasts of last night's unrest in Baltimore on the platform “riveting.” In the first ten days after its launch, Costolo said, more than 1 million people signed into the app. Twitter today also announced it agreed to buy TellApart, an advertising technology company.
Noto said Twitter had formed valuable partnerships with both Google and Apple, so that tweets would emerge in real-time in both Spotlight and Google’s search engine, with the functionality rolling out on Google by May. “This is not a supply issue, this is really a demand issue,” Noto said of the growth of Twitter’s advertising business.
But for a company that’s been doing everything it can do to meet investor expectations, despite struggling on the way, the early disclosure is unlucky---and didn’t even appear to require that much effort. "Today’s $TWTR earnings release was sourced from Twitter’s Investor Relations website https://investor.twitterinc.com," Selerity said (on Twitter). "No leak. No hack."
