By Angela Chen And Yoree Koh
Twitter Inc. on Tuesday gave downbeat sales guidance for the
current quarter and year, as first-quarter revenue rose less than
expected, following disappointing results from some of its newer
products.
Shares plunged in late-day trading, falling 18% to $42.27, it's
second-worst day ever by percentage. The quarterly report--expected
after the market close--came out earlier when the website Selerity
found the company's earnings release online and began reporting the
company's results in tweets.
Twitter Chief Executive Dick Costolo said in the company's news
release, "Revenue growth fell slightly short of our expectations
due to lower-than-expected contribution from some of our newer
direct-response products."
Some of the new products Twitter has introduced include video
functionality, the "while you away" recap feature, instant
timelines and group direct messaging.
The San Francisco-based company is under intense scrutiny as Mr.
Costolo and his new leadership team tries to show investors that
they still have ways to reinvigorate user growth and generate the
kind of revenue that matches the powerful platform's cultural
influence.
In the latest quarter, the number of Twitter users who log in at
least once a month rose to 302 million in the March quarter, up 18%
from the prior-year period.
For the current second quarter, the company expects revenue
between $470 million to $485 million, below analyst estimates of
$538 million. For the full year, the company expects sales of $2.17
billion to $2.27 billion, again below analyst estimates of $2.37
billion.
Separately, the company said that it has agreed to acquire
marketing company TellApart Inc. and will partner with Google's
DoubleClick advertising platform. Financial terms of the TellApart
deal, which is expected to close around June 1, weren't
disclosed.
Twitter has yet to eke out a profit amid ongoing investments on
new data centers, office expansion and talent.
For the latest quarter, Twitter reported a loss of $162 million,
or 25 cents a share, compared with a loss of $132 million, or 23
cents a share a year earlier. Excluding stock-based compensation
and other items, the company's per-share earnings rose to seven
cents a share from zero cents a share in the prior-year period.
Analysts, on average, were expecting earnings of four cents a
share, according to Thomson Reuters.
Revenue increased 74% to $435.9 million. The company had
expected earnings between $440 million to $450 million, while
analysts surveyed by Thomson Reuters estimated, on average, that
Twitter would post revenue of $456.8 million.
Advertising revenue grew 72% to $388 million, with mobile
advertising revenue comprising 89% of the amount. International
revenue more than doubled to $147 million.
The San Francisco company's maturing advertising business, which
comprises the bulk of its revenue, is making further headway,
riding the wave of advertising dollars shifting to mobile and
social platforms.
Less than an hour before the market's close, Selerity--a New
Jersey firm that crawls the Web for financial data-- began
reporting Twitter's earnings numbers in multiple tweets. The firm
says its Web-crawling software found the link to Twitter's news
release announcing the earnings on the company's publicly available
investor relations page.
"There is occasional scraping that occurs," said Brendan
Gilmartin, Selerity's executive vice president of content and
client services, in an interview. "In this instance, we noticed
that the results were available."
It wasn't clear when Twitter may have first inadvertently
published the link and if it removed it once Selerity started
tweeting the results. Twitter has said it is investigating the
leak.
Write to Angela Chen at angela.chen@dowjones.com and Yoree Koh
at yoree.koh@wsj.com
Access Investor Kit for Google, Inc.
Visit
http://www.companyspotlight.com/partner?cp_code=P479&isin=US38259P5089
Access Investor Kit for Google, Inc.
Visit
http://www.companyspotlight.com/partner?cp_code=P479&isin=US38259P7069
Subscribe to WSJ: http://online.wsj.com?mod=djnwires