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User growth was just one of Twitter’s concerns when the company reported second-quarter earnings on Tuesday. The social network also had to answer questions about how it plans to curb harassment on its platform following a series of attacks on Ghostbusters star Leslie Jones last week.
Harassment “has no place on Twitter,” CEO Jack Dorsey said during a conference call with investors. “We haven’t been good enough at ensuring that’s the case and we must do better.”
Twitter executives, including CFO Anthony Noto and COO Adam Bain, also had to address the company’s revenue shortfall during the second quarter. The social network reported that it brought in revenue of $602 million for the quarter, up 20 percent from the same period last year. But Wall Street was looking for revenue of $607 million and the miss sent Twitter’s stock sliding more than 10 percent during after-hours trading.
The company also reported that adjusted earnings were 13 cents per share for the quarter, compared with the 10 cents per share that analysts, as polled by Thomson Reuters, had been expecting.
Meanwhile, Twitter grew its user base to 313 million, up just 3 percent from the second quarter last year. That represents an addition of 3 million users since the end of the first quarter.
The company’s third-quarter outlook, which came in below analyst’s expectations, contributed to the stock slide. Twitter said it was expecting revenue between $590 million and $610 million.
Dorsey, a Twitter co-founder who has been back in the CEO seat since July of last year (in an interim capacity until he was named permanent CEO in October) continues to face investor questions about how he will boost the company’s sluggish user growth. Last quarter, Twitter added 5 million monthly active users to grow its base to 310 million MAUs but it has been surpassed by other fast-growing social networks like Instagram, which recently passed 500 million monthly users.
The company, under the product-minded Dorsey, has made a number of changes to its service to help simplify it for new users. Moments, for example, launched last year as a hub for a curated selection of tweets about breaking news, large events and other conversation starters. Twitter also has said it will no longer count links to images and video toward its 140-character limit. RBC Capital Markets analyst Mark Mahaney noted in a pre-earnings report that while none of these charges “will likely materially change Twitter’s user/usage growth, product innovations are a positive step.”
During the call with investors following the earnings news, Dorsey said Twitter has seen some impact from its product changes that will “give us a foundation for our future growth.”
The earnings report comes in the midst of the company’s efforts to build up its video business, inking a number of live-streaming deals with everyone from the NHL to CBS for sports and election broadcasts. But the impact of those deals on user growth or ad revenue won’t be seen for several quarters.
Twitter executives appear bullish on the opportunities that the live-streaming deals represent, however. The company said that its pact with the NFL to stream games that are part of its Thursday Night Football package has already drawn interest from advertisers. The company would only say that it has “sold through a meaningful percentage of the available ad inventory for the upcoming season,” but it added that advertisers like Anheuser-Busch, Sony and Verizon have already inked deals.
Shares closed on Tuesday down 1 percent, or 20 cents, to $18.45.
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