In an attempt to offset the generally bad monthly user news, CEO Jack Dorsey and CFO Anthony Noto focused on the growth of daily active users, which they claimed has risen 12% year-over-year but lagged by 14% from last quarter. "We also delivered better-than-expected adjusted EBITDA margins in Q2, despite the year-over-year decline in revenue", the group said.
Wall Street sees the daily usage metric as less significant because Twitter doesn't share how many daily active users it actually has, making year-over-year growth hard to assess. By limiting functionality or suspending accounts, Twitter found abusive users generated 25 percent fewer abuse reports.
The company's completely stalled user growth during its second quarter sent shares diving more than 10% in pre-market trading on Wednesday. The company has long associated user growth with a path to revenue growth, particularly as it tries to gain its footing in the digital advertising space. The social media service reported earnings claiming 328 million total users - the same number it reported after Q1.
Quarterly Revenue growth year over year is -7.8 Percent. The number of daily active users grew 12%, which was the third quarter in a row in which the micro-blogging firm reported daily active user growth in the double digits.
"With what Trump is doing, you would think more users would be there out of morbid curiosity", said Michael Pachter, an analyst at Wedbush, referring to President Trump's habit of using the platform to make surprising announcements and to trash opponents and allies. Twitter credited that strong performance to "news and political" activity on the social network, "particularly in the U.S".
"Both Facebook and Twitter have talked about working to convince advertisers of value of their ads", said Jan Dawson of Jackdaw Research in a tweet, noting that the difference is that Facebook is growing "rapidly". The company has also been investing heavily in video, but it has a hard time competing against Facebook and Google for advertising dollars.
However, the mark was still a 5 percent drop in year-over-year earnings for Twitter.