Twitter didn’t even come all that close to hitting its first-quarter 2016 revenue target — this, despite a 37 percent growth in ad sales.
Once the company made its Q1 financials public, TWTR stock fell hard. Shares had closed Tuesday at $17.75 per share, up 66 cents, or 3.86 percent — this was before the bad news. The stock instantly dropped double digits in after-hours trading.
Wall Street had expected the social media company to report earnings per share of 10 cents on $607.84 million in revenue, according to Yahoo Finance. Unfortunately, Twitter managed just $595 million in sales. On the bright side, that’s still up 36 percent versus the comparable quarter last year. Oh, and the company bested on adjusted EPS by a full nickel — so it could have been worse.
Plus, there has been increased adoption, though maybe not enough for media analysts. Twitter reached 310 million Monthly Active Users over its the recent three-month period, up 3 percent from 305 million MAUs in Q1 2015.
Here’s Twitter’s own explanation about what had happened with that whole top-line thing:
“Revenue came in at the low end of our guidance range because brand marketers did not increase spend as quickly as expected in the first quarter,” Twitter wrote in its Q1 letter to shareholders. “We see a clear opportunity to increase our share of brand budgets over time.”
“We have a strong product roadmap designed to tap into incremental brand-oriented online video budgets, and will deliver additional features for advertisers later this year — including more detailed demographic targeting and verification, and reach and frequency planning and purchasing,” the company continued.
Twitter executives will hold a conference call at 5 p.m. ET today to drill down further into the financials.