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Everything you need to know about Twitter’s first earnings call (like why stock is falling)

everything need know twitters first earnings call feb 2014 twitter ipo
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Twitter just finished its first earnings call. CEO Dick Costolo and the Twitter team explained the company’s earnings from the past quarter, and fielded questions about what is next for the company. Here’s what you need to know:

Twitter, appropriately enough, used Twitter to share earnings information

The company created an account specifically for the earnings call, and tweeted some figures out: 

This tweet explains Twitter’s revenue increase. Looks good, right? Well, investors didn’t necessarily think so, but we’ll get to that in a minute.

Add revenue from Timeline views is up. Another thing that looks positive but apparently wasn’t enough to sweeten Wall Street.

The above tweet may explain some of the ambivalence. Yes, monthly average users are up, but not by that much. People may be worried that Twitter saturated its market, because this isn’t the first time user growth has slowed. In fact, it’s the fourth consecutive quarter that user growth has geared down. 

As Twitter’s leaders geared up to talk, the company’s stock swooped

It dropped down around 17 percent over the course of the day. The company certainly isn’t reporting bad earnings, but the high expectations and even higher stock prices meant it was easy to disappoint. Investor worry certainly doesn’t mean Twitter is on the rocks – just look at how Facebook recovered from concerns that it couldn’t monetize mobile. 

Twitter has plenty of plans to attract new users and keep old ones engaged

Costolo sounded most energized when he discussed ways to make Twitter more appealing. “Recent changes like putting direct messaging front and center in our native mobile apps on iOS and Android are also driving increased interaction, with messaging up more than 25 percent since that change.” he said, explaining how recent initiatives have spiked engagement. Costolo also noted that he wants to make changes to help new users get started and to re-engage inactive users. 

So, this wasn’t the best day for Twitter when it came to the stock market, but overall, the company has remained shrewd and continued to pursue smart strategies without making any huge missteps. Don’t count the blue bird out.

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