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With Twitter\u2019s acquisition hopes essentially dead, the company now seems it\u2019s on its own to fend for itself and needs to figure out a way to build a reasonable and profitable business.<\/p>\n
Today, it got a much-needed good Q3 performance by largely beating Wall Street\u2019s expectations across the board. The company also confirmed that it would lay off roughly 9 percent of its staff as it looks to restructure itself into a company that can continue to run on its own and keep Wall Street happy. Those layoffs are targeted at sales, marketing and partnerships, the company said, confirming an earlier TechCrunch report.<\/p>\n
Twitter reported earnings of 13 cents per share and revenue of $616 million, and the service grew to 317 million users. Analysts were looking for earnings of 9 cents per share on around $606 million in revenue, as well as 315 million monthly active users. Last quarter, the company had 313 million monthly active users.<\/p>\n
After the rare beat \u2014 and a brief rush of optimism \u2014 Twitter\u2019s shares rose as much as 5% in pre-market trading. Ironically, by Twitter standards, this isn\u2019t that much of a swing, but it surely must be a breath of fresh air for the company\u2019s executive team and employees which have seen the company\u2019s stock continue to stumble for the past year. Given that there\u2019s little guidance for the fourth quarter, however, shares have come down and are only up around 3.5% now.<\/p>\n
As Twitter looks forward, the company isn\u2019t even going to be reporting revenue guidance \u2014 a tradition for many technology companies as it looks to set expectations for Wall Street in the coming months. That seems largely because the company is going to be restructuring its sales teams as it \u201cwill move from three sales channels to two.\u201d It seems that Twitter\u2019s restructuring this time around is going to be a big rejiggering of the company\u2019s core business driver, so we\u2019ll have to see where things land next quarter.<\/p>\n
Earlier this week it was reported that the company would lay off as much as 8% of its workforce \u2014 or 300 people \u2014 according to Bloomberg. We reported that, in these layoffs, the sales team in particular was being targeted<\/a>. While for a long time business head Adam Bain was seen to have built a strong business, in recent quarters Twitter\u2019s ability to grow its sales have become a question mark, especially as Facebook continues to add new users at a healthy clip and emerging platforms like Snapchat are growing like crazy and enticing advertisers.<\/p>\nOnce again, it looks like the company\u2019s sales is still not growing as fast as it needs to, especially as a company like Snapchat is looking to generate as much as $1 billion in revenue as it looks to IPO at a valuation as high as $35 billion next year<\/a>. Advertising revenue grew only grew 6% year-over-year, while its small data and licensing revenue stream continues to grow at a semi-healthy clip.<\/p>\n Twitter did better than Wall Street expected, but it still needs to figure out how to re-ignite that growth engine.<\/p>\n Under CEO Jack Dorsey, who took over about a year ago, the company has said it\u2019s going to try to make the service as straightforward \u2014 and less confusing \u2014 as possible. But in his first year, not a lot has been done outside of taking away character count contributions for some media and most recently for @ mentions. Twitter\u2019s largest problem, its trolls, haven\u2019t also been addressed at a product level. That final problem even scared away suitors like Disney and Salesforce from buying the company.<\/p>\n \u201cTo capture this large opportunity, and drive daily active usage across the millions of people at the top of our funnel each day, we\u2019re refining our core service in four key areas: onboarding, the home timeline, notifications and Tweeting,\u201d Twitter said in its earnings statement. \u201cWe\u2019re rapidly iterating across these four areas and encouraged by the direct benefit we\u2019ve seen from recent product improvements that are driving results in Q3, following the inflection in Q2.\u201d<\/p>\n Even a cursory look at Dorsey\u2019s tenure doesn\u2019t show much for the company\u2019s potential. Its stock has fared very poorly since he took over a year ago, user growth has slowed to an absolute crawl, and revenue growth appears to be tapering off.<\/p>\n Twitter continues to look at new product options, including live video like its Thursday-night NFL broadcasts. With an Apple TV app, it would seem like live-streaming events like this might actually be the company\u2019s sweet spot, especially heading into the election. Twitter said its most-recent Thursday-night NFL games reached more than 3 million viewers<\/a>, up from its first game, which had 2.35 million viewers. The second and third presidential debates had 3.3 million unique viewers<\/a>, up 30% from the first debate, the company said.<\/p>\n Video has been our top rev generating ad format. Demand for the debate package was so strong that inventory sold out in record time. #TWTR<\/a><\/p>\n![\"twitter](\"https:\/\/i0.wp.com\/www.rsoftsolution.com\/blog\/wp-content\/plugins\/RSSPoster_PRO\/cache\/bdf86_screen-shot-2016-10-27-at-4-11-51-am.png?resize=640%2C388\")
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