Three days ago, Twitter published the company’s Earnings Report in its 2nd quarter of 2018, which came as a disappointment for shareholders around the world.
The company reported a loss of one million total monthly active users, which was 336 million monthly active users, according to Twitter’s last quarterly report. While the number of monthly active users on Twitter fell down to 335 million, as reported in Twitter’s Q2 2018 report.
This fall in monthly active users came unlike the analysts’ expectations, who expected Twitter to reach more than 338 million monthly active users.
As stated by Twitter in its investor letter:
“Based on our current level of visibility, we expect the decline to be mid-single-digit millions of [monthly active users],” the company.”
Twitter’s daily active users were up 11 percent last quarter, its seventh straight quarter of double-digit growth.
“the effort to clean up the platform will enable long-term growth as we improve the health of the public conversation on Twitter.”, CEO Jack Dorsey told investors.
The below graph showcases the average of growth in Twitter’s daily active users since 2016.
Total revenue hit $711 million in Q2, up 24% year-over-year, and Twitter posted net income of $100 million (or 13 cents per diluted share), and a net margin of 14%.
Experts and analysts had expected that Twitter’s total revenue would reach $696 million. This increment in the total revenue perhaps is the result of this decrease in the user base.
As a result of these numbers in Twitter’s Q2 2018 Earnings Report, Twitter’s stock plunged 20.5% in Friday trading, which is a result of the fall in the number of active monthly users from 336 million to 335 million over the past three months.
It should be pointed out that Twitter’s shares opened down by 15% when Wall Street opened on Friday before the investors had been reported, reaching a total of 20.5% by the time the markets closed Friday.