Twitter Inc. made an official statement today that its user growth declined for another straight quarter. This put a lot of pressure on the companys Chief Executive Officer, Dick Costolo, who needs to make Twitter attractive to more customers and advertisers, and also led to a sell-off in the stock.
Mr. Costolo said during an earnings call with some analysts, cited by the Wall Street Jounal: “We had another very strong quarter financially. I’m happy with the strategies and the quality of the work we’re doing but given our significant aspirations and the breadth of the opportunity in front of us, it’s more critical than ever that we increase our overall pace of execution.”
According to Twitters statement, its active subscribers increased by 23% to 284 million. This result was lower than the 24% increase over the previous period and comes after more than twelve quarters of decelerating growth. The companys non-GAAP earnings per share amounted to 1 cent, which was in line with the initial analysts forecasts. The losses of Twitter on a GAAP basis increased from $64 million in 2013 to $175 million now.
Twitter also said that its revenue over the third quarter increased more than two times to $361 million and surpassed the initial expectations. This resulted into the company raising its full-year forecast. However, the U.S.-based companys user growth slowed once again after gaining momentum over the last few quarters.
The companys investors had expressed their concerns that the social media would not fulfil its promise to reach a billion subscribers over the first six months of the year.
The CEO Costolo said in an interview for Bloomberg after the company released its earnings report: “It’s the number that we delivered into the market and it’s our number one priority. We have an aspiration to build the largest daily audience in the world.”
Twitter Inc. was 2.78% down to close at $48.56 per share yesterday. The company is valued at $30.73 billion. According to CNN Money, the 31 analysts offering 12-month price forecasts for Twitter Inc. have a median target of $58.00, with a high estimate of $65.00 and a low estimate of $28.00. The median estimate represents a +19.44% increase from the last price of $48.56.
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