Hopes that the return of co-founder Jack Dorsey would boost Twitter’s user and revenue growth have been dashed after the social media company reported its weakest quarterly sales growth since 2013.
Revenue in the second quarter rose 20% – a rate of growth many big companies would be delighted with – to $602 million. But compared with growth of 61% in the same period last year, Dorsey and his team are struggling.
New monthly active users – an important measure of performance for firms like Facebook and Twitter – rose just three million from 310 million to 313 million. In fact, since Jack Dorsey came back on board in July 2015, just nine million new users have joined Twitter. When you compare that with Facebook’s increase of more than 100 million, it makes for pretty dismal reading.
There was at least some uplift for Twitter, with its losses falling from $136 million in Q2 last year to $107m(£84.7m)
Twitter chief financial officer, Anthony Noto, said: “We continue to believe that, with disciplined execution against our priorities, we can drive sustained engagement and audience growth over time.”
Writing to shareholders, Jack Dorsey said: “We are confident in our product roadmap, and we are seeing the direct benefit of our recent product changes in increased engagement and usage.”
Since his return he has brought in a number of changes in some sort of attempt to get Twitter growing and closer to a coveted profit. The 140 character limit has been loosened, with links and images no longer counting towards it, giving users more freedom to say what they want. And he introduced a new algorithm meaning users will see tweets they find more interesting and engaging first, rather than chronologically.
But with so few people joining Twitter, surely these new measures have been a waste of time?
“We are a year into Dorsey coming back and there is really no end in sight of when it is going to start picking up to where investors are going to be happy,” said Patrick Moorhead, an analyst at Moor Insights & Strategy.