Shares of Twitter dipped more than 10 percent on Tuesday after the company missed analyst expectations for quarterly revenue.
Twitter reported revenue of $595 million for the first quarter of 2016, which is up 36 percent year-over-year but missed Wall Street’s estimates of $608 million.
“Revenue came in at the low end of our guidance range because brand marketers did not increase spend as quickly as expected in the first quarter,” the company noted.
The social media giant did beat expectations for profit with $0.15 earnings per share and for user growth, reporting monthly active users at 310 million, up 3 percent year over year and up from 305 million last quarter.
But investors are likely not happy with Twitter’s Q2 outlook, as the company expects revenue of $590 to $610 million, well below the $678 million that analysts expected.
“We see a clear opportunity to increase our share of brand budgets over time,” Twitter noted in the earnings release. “We have a strong product roadmap designed to tap into incremental brand-oriented online video budgets, and will deliver additional features for advertisers later this year — including more detailed demographic targeting and verification, and reach and frequency planning and purchasing.”
You can read the shareholder’s letter here.
Twitter’s struggles to impress Wall Street and add new users date back to one year ago, when the company’s earnings report disappointed Wall Street as its stock began a huge dive, reaching an all-time low of $14.31 in February. Shares are down more than 65 percent in the past year.
Last quarter, Twitter actually saw its user base dip from 307 million to 305 million, excluding users who use Twitter’s “SMS Fast Followers” service. It was the first time Twitter’s monthly active user count dropped quarter-over-quarter.
Twitter this year has implemented a number of changes, both internally and to its product. In January, Twitter’s executive team went through an upheaval, as its head of engineering, head of media, head of product, head of human resources, and head of Vine departed.
To attract more users, Twitter in February announced a new feature that highlights “important” tweets above the normal timeline that shows tweets in chronological order. The idea is to surface the “tweets you’re most likely to care about,” according to Twitter.
There are other possible changes to Twitter’s product on the horizon, like increasing the tweet character limit from 140 to 10,000.
Twitter also inked a streaming deal with the NFL earlier this month.
From today’s shareholders letter:
As we outlined last quarter, we’re focused on what Twitter does best: live. Twitter is live: live commentary, live connections, live conversations. Whether it’s breaking news, entertainment, sports, or everyday topics, hearing about and watching a live event unfold is the fastest way to understand the power of Twitter. Twitter has always been the place to see what’s happening now and our continued investment in live will strengthen this position. By doing so, we believe we can build the planet’s best daily connected audience. A connected audience is one that watches together, and can talk with one another in real time.
This is our first quarterly update after laying out our long-term strategy and priorities. As a reminder, we have five priorities for the year: refining our core service, live-streaming video, creators and influencers, safety, and developers. Each is critical to strengthening our platform and audience around live. We made meaningful progress across each in Q1.