The shares of Twitter Inc (NYSE:TWTR) slid more than 12% during the afterhours trading closing at $43.22 after its third quarter 2014 results. The social media platform lost up to 7 percent user engagement during the quarter along with lower-than-expected revenue guidance for its fourth quarter 2014.
The micro-blogging platform announced its third quarter 2014 financial results with net revenue of $361 million along with net loss of $175 million for the quarter. Non-GAAP earnings per share during the quarter stayed at $0.01 and the tech company announced adjusted EBITDA of $68 million for its third quarter.
Dick Costolo, CEO of Twitter Inc (NYSE:TWTR), said,
“We had another very strong financial quarter. I’m confident in our ability to build the largest daily audience in the world, over time, by strengthening the core, reducing barriers to consumption and building new apps and services.”
Despite of a 23% growth in its user base, declining user engagement is a reason to worry and the social platform reported 284 million monthly active users during the quarter. The company reported 181 billion timeline views against the market expectations of 183 billion. The advertising revenue for every thousand-timeline views was $1.77 beating its previous quarter’s $1.60 revenue. Overall ad revenue during the quarter was $320 million with mobile ad revenue accounting for 85% of the total amount.
When talking about the monthly active users, executive of the micro-blogging platform said that the real-time reach exceeds the 284-million figures considering the hundreds of millions of users who receive content without logging into the platform. Further, the efficient profile design changes were responsible for lower refreshes and hence lower timeline views.
However, the analysts are not happy with these results and Arvind Bhatia, Sterne Agee analyst, said,
“For a stock like Twitter, which is up a bit since the last quarter, expectations were high. People expect more than just in line.”
Twitter Inc (NYSE:TWTR) projected net sales of $440 million to $450 million in the next quarter as compared to the market expectations of $448.8 million.
This article has been written by Prakash Pandey.