Shares of Twitter fell more than 12% after the social media company missed on user growth in the first quarter and offered lower-than-expected revenue estimates for the future.
The company said after market close Thursday that its average monetizable daily active users rose 20% year-over-year to 199 million, but analysts expected 200 million. Despite the disappointing user growth figures, Twitter beat expectations on revenue and earnings, though it wasn’t enough to convince investors.
Twitter reported $1.04 billion in revenue for the first quarter, up 28% from $808 million a year ago, when the pandemic began to hit corporate earnings. Twitter booked a profit of $68 million in the quarter, up from a $8.4 million loss a year ago.
In another blow to investor sentiment, Twitter announced guidance for the second quarter that was on the lower end of expectations.
The company said it expects revenue between $980 million and $1.08 billion in the second quarter, while analysts were hoping for guidance of $1.06 billion.
On a conference call with analysts, Twitter CEO Jack Dorsey also offered some insight into how the company is thinking about content moderation. The company has faced criticism for suspending accounts, including that of The Post, and limiting the reach of stories that it deems violate its rules. Though some say it’s failed to clearly define its platform rules.
Dorsey said the company wants to give users more tools to contribute to content moderation because he doesn’t think Twitter should be “the arbiter of all these things.”
“It should be more of the wisdom of the crowds and we’re trying to find that right balance,” he said.
The earnings offered investors their first glimpse into how the company could perform without former President Donald Trump, who was banned from the platform after the Jan. 6 riots at the Capitol.
Trump used the social media platform more than any other elected official and in an unmoderated way that some have credited with helping Twitter grow in recent years.