Friday 21 October 2016

Twitter shares dive as it reports heavy loss

James Titcomb

Published 27/07/2016 | 08:03

Twitter's Chairman Jack Dorsey. Reuters/Cathal McNaughton
Twitter's Chairman Jack Dorsey. Reuters/Cathal McNaughton

Twitter has revealed a second-quarter loss of $106m (£81m) and warned that growth would slow significantly in the coming months, sending shares crashing.

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Over a year after founder Jack Dorsey returned to the microblogging social network, Twitter said monthly user numbers had grown by just 3 million in the quarter to 313 million.

It continued to make a heavy loss as growth slumped. Revenue growth was just 20 per cent year-on-year, against 36pc just three months ago. Twitter also forecast that revenue growth in the coming quarter would slow further.

Twitter's shares have slumped as the company's growth slows down earlier and more rapidly than expected. The service has been plagued by accusations that it is confusing and difficult to use, as well as lacking wide appeal.

When results were released, Twitter's shares dropped by more than 11pc in after-hours trading. While the company's loss was an improvement on the $137m from the same period a year ago, it was higher than the $80m reported in the first quarter of the year.

Revenues were $602m and Twitter predicted that in the next quarter they would be between $590m and $610m, which would represent a rise of between 4pc and 7pc - a worse-than-expected slowing. Twitter said it had seen "less overall advertiser demand than expected".

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