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| Twitter CEO Dick Costolo. |
Twitter reports earnings Thursday after the market closes.
It's going to be very interesting. Twitter CEO Dick Costolo has been under pressure for weeks, with investors calling for his ouster. In response to the pressure, Twitter has increased the velocity of its operations, rolling out new products.
Unfortunately for Twitter, most of the product improvements are happening this quarter, so they won't have much impact on Twitter's earnings.
Analysts are expecting earnings per share of $0.06 on revenue of $453.6 million, which would be up 86% year-over-year. Last quarter, revenue was up 114%, so if Twitter hits expectations, it would be a slowdown in the growth rate.
More importantly, analysts are anticipating 295 million monthly active users for the fourth quarter, according to Bloomberg. That would be 22% growth. Last quarter Twitter had 284 million users, which was up 24%. Again, that would be a slowdown in the growth rate.
This is Twitter's fifth earnings report. In all of its previous reports, the stock was whipped around pretty hard in reaction to the results, so you'll want to pay attention when the numbers hit. We'll have the results as soon as possible, so tune in!
Since Twitter last reported earnings, a lot has happened.
- Kevin Weil was promoted to be head of consumer products for Twitter. This was the most important thing that happened. Weil is a longtime, well-respected executive at Twitter.
- It held its analysts day in November. At the analysts day, Twitter promised faster execution, and it also projected that it would be one of the biggest internet companies, as measured by revenue, in the next few years.
- People started calling for Costolo to be fired. Analyst Robert Peck has been leading the charge. He says investors question whether Costolo has the vision to be CEO.
- A furious Twitter investor told us Costolo "should not be running the company."
Twitter's founders at the company's IPO.A sample of their support:
- Peter Currie, a Twitter board member who rarely tweets, tweeted on Jan. 5 that he was "very confident in Costolo and the talented team he has."
- Jack Dorsey, a Twitter cofounder and board member, went on a tweetstorm that was supportive of Costolo.
- Ev Williams, another Twitter cofounder and board member, told Twitter employees that he was "super supportive" of Costolo.
On the heels of board support for Costolo, Twitter went on a product-announcement blitz. All of this happened in the past few weeks:
- It announced group direct messaging.
- It added the ability to post video straight to Twitter.
- It announced syndicated promoted tweets for Flipboard and Yahoo Japan. This allows Twitter's ads to go on other sites.
- There is a report that tweets will be indexed by Google and show up in Google search results.
- There is a report that Twitter is changing its front page. When people hit Twitter.com they will see topics from people using Twitter.
- It updated what happens for new users. New users now get an "instant timeline" that fills with accounts to follow. The New York Times tested it and loved it.
- It also announced some new product that allows small businesses to quickly advertise.
And Wednesday night, The Verge reported that Costolo was telling Twitter employees he was embarrassed that Twitter was so terrible at dealing with trolls. He considers it a personal failure that Twitter isn't a better platform for people who don't want to be harassed.
Phew! That's a lot of stuff in short period of time.
Add it all together, and frankly, it looks a little weird. Why did Twitter go on this crazy blitz of announcements in the weeks leading up to its earnings?
It seems as if one of two things is happening here.
Either Twitter has gone pedal to the metal and is going to kill earnings, and point to all of this, and Costolo will be able to tell the haters to pound sand.
Or, Twitter's earnings are going to be rough, and Costolo wants board support and to be able to tell analysts about all the things he's doing to fix the product.
We will find out in a few hours what's going on.
