Twitter shares fell 13% after the social media company reported its first quarter results and shared a disappointing ad sales revenue prediction that failed to meet analysts’ expectations.
For the first quarter of the year, the company reported a total revenue of $1,036 billion with a 28% year-over-year growth rate. While its ad business accounted for $899 million, remaining $137 million were generated from data licensing and other revenue.
In addition, the company said the number of its average monetizable daily active users reached 199 million with a 20% Y/Y increase.
Also Read: Twitter Revenue and Usage Statistics
Twitter executives said that the company started the year with slow ad sales and some advertisers pulled back their ad spending due to the U.S. Capitol Riot on January 6. “When there is unrest for one reason or another,” said Twitter Chief Financial Officer Ned Segal, advertisers “often pause when there is a more important conversation than the conversation around their product.”
Unlike Google and Facebook which reported their quarterly ad sales this week beating forecasts, Twitter said it expects its ads sales to be between $980 million and $1.08 billion during the second quarter that will end in June, failing to meet analysts’ predictions.
Meanwhile, it’s worth noting that Facebook also expects a significant drop in its ad revenue due to the iOS 14 IDFA changes. Apple’s new App Tracking Transparency feature which comes into effect this week will make it mandatory for developers to get user permission in order to track their data.
Twitter is currently working on various features to monetize its platform including the Super Follow service which will charge users for exclusive content and the Tip Jar feature (for its Clubhouse-alternative Spaces) which will allow users to support their favorite content creators with donations.
The company is also reportedly testing new shopping features to enable sales on its platform and working on in-app purchases for Android.