Twitter shares are up more than 4.5% in pre-market trading after the struggling social media company said that it will cut employment by 9% — but beat Wall Street’s expectations for Q3 financials.
The number of monthly active users — a closely watched statistic — increased 3.3% vs last year to 317 million. Analysts expected 316 million.
Twitter reported a net loss of $102.9 million, a 21.9% improvement vs the period last year, on revenues of $616 million, up 8%. Analysts anticipated revenues of $605.8 million. Adjusted earnings at 13 cents a share beat projections for 9 cents.
“Our strategy is directly driving growth in audience and engagement, with an acceleration in yearover-year growth for daily active usage, Tweet impressions, and time spent for the second
consecutive quarter,” CEO Jack Dorsey says. “We see a significant opportunity to increase growth as we continue to improve the core service. We have a clear plan, and we’re making the necessary changes to ensure Twitter is positioned for long-term growth. The key drivers of future revenue growth are trending positive, and we remain confident in Twitter’s future.”
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The layoffs will mostly hit Twitter’s sales, partnerships and marketing efforts, the company says. They’re designed to “create greater focus and efficiency” to help it become profitable.
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The restructuring will result in as much as $20 million in expenditures, almost all for severance outlays, and possibly $10 million in non-cash expenditures related to stock-based compensation expenses. They should hit the books in Q4.
As a result, the company declined to offer financial guidance for the year-end period.
Investors will be listening carefully to a conference call this morning where Dorsey’s expected to lay out his growth strategy after Twitter tried, and failed, to attract a buyer.
Many fear that Twitter’s symbols and protocols make it unappealing to non-users, which will limit its ability to grow.
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