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TwitterShares of Twitter fell more than 10 percent in after-hours trading after the company missed quarterly expectations for revenue.

Twitter posted Q2 revenue of $602 million, up 20 percent year-over-year, but less than the $607 million analysts expected. The company posted profit of 13 cents per share, beating expectations for 10 cents per share.

Twitter reported 313 million monthly active users, up 3 percent from last year and up 3 million from the most recent quarter. RBC Capital’s Mark Mahaney expected 311 million monthly users, up just 1 million from last quarter, while other analysts expected growth in the 2-to-3 million range.

“We’ve made a lot of progress on our priorities this quarter,” Twitter CEO Jack Dorsey said in a statement. “We are confident in our product roadmap, and we are seeing the direct benefit of our recent product changes in increased engagement and usage. We remain focused on improving our service to make it fast, simple and easy to use, like the ability to watch live-streaming video events unfold and the commentary around them.”

All in all, it was a mixed earnings report for Twitter, which is struggling to add new users at the same rate of other social media giants like Facebook and Snapchat. User growth has effectively stalled since last year. The company’s stock is down nearly 50 percent in the past year, but up 7 percent over the past three months.

You can read Twitter’s letter to shareholders here. The company, which also missed revenue expectations for Q1, expects revenue of $590 million-to-$610 million for Q3, which is well below what analysts expected.

[Follow-up: Here’s how Twitter pitches its live-streaming platform to sports leagues and news media]

For the past several months, Twitter has turned its focus to live streaming, particularly with sports and news content. Following its deal with the NFL to stream 10 Thursday Night Football games this season, the company inked deals with the NBA; the NHL and MLB; and the Pac-12 conference. It also live-streamed content from Wimbledon earlier this month. Twitter also is partnering with non-sports media companies, like Bloomberg, and streaming events like the Republican National Convention.

The deals, which bring in additional advertising money for Twitter, are being made as the company struggles to add new users. Twitter this week rolled out a new marketing campaign intended to help explain itself to new users. The social media giant is also rolling out new features, like changing what counts toward the 140-character count, and expanding live video within feeds.

Here’s a bit of insight into advertising issues Twitter is dealing with, via the shareholders letter:

We’ve been doing business with the world’s most iconic brands for five years. In that time, we’ve delivered significant return on investment (ROI) and brand advertisers have been the single biggest driver of our success, helping us grow from $0 in revenue to the #3 display ad player. Our brand business remains strong in absolute terms, but there are some new challenges that we’re now tackling head-on.

First, there is increased competition for social marketing budgets, which requires us to continuously raise the quality bar on the advertising solutions we bring to market.

Second, while we have worked to drive higher ROI for advertisers (by leveraging our current user base, ad formats and innovations in targeting, creative and measurement), we’re still priced at a premium CPE relative to others. This has proven to be a headwind in growing Twitter’s share of overall social budgets and in our ability to grow faster in both video and performance advertising.

To achieve re-acceleration in our ads business, we need to continue to win our share of social marketing budgets and continue to deliver advertising solutions that extend beyond social marketing — into performance and premium mobile video budgets. These are large incremental market opportunities with strong growth that we believe Twitter is well positioned to capture over time.

To do this, we’re focused on three main initiatives: building a rich canvas for marketers; driving increased ROI with improved measurement, bidding, and relevance; and increasing scale by leveraging Twitter’s unique total audience. We believe these areas of focus will enable us to deliver value to advertisers of all sizes and capture incremental budgets for both video and direct response ads over time. Here’s an update on each of these key priorities and how we’re executing against them.

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