Despite a gloomy outlook and the announcement that Twitter would cut 9% of its workforce and close Vine its video streaming service, the company beat earnings expectations in its third quarter results.
With Wall St expectations for Q3 at about $605 million and nine cents a share, the social media company surprised analysts by coming in with revenues of $616 million and 13 cents a share in adjusted earnings.
Nonetheless, despite the positive revenue numbers, Twitter is still a loss making business. Its loss for the quarter stood at $0.15 a share or $103 million.
Meanwhile Titter’s user base was up 3% year on year to reach 317 million people, and up 313 million from Q3. Average active daily user numbers were also up 7 percent as compared to the same period last year.
In a bid to become a leaner operation the company will perform a restructuring of its operations that will see Twitter cut 350 people or 9% of its workforce from its marketing, partnerships, and sales departments. Company CEO Jack Dorsey asserts that the restructuring will help the company achieve GAAP profitability by 2017.
Meanwhile the company announced that it would be shutting down Vine. The video app service launched to compete with Facebook’s Instagram never gained sufficient traction in the saturated video app market.
Twitter’s CEO Jack Dorsey asserts that the company’s strategy is to drive growth in engagement and audience numbers, while accelerating time spent, tweet impressions, and daily consecutive usage year on year. He believes that the company has a good opportunity to drive growth as it continues to make improvements to its core service, to position Twitter for long-term growth.
The closure of the Vine service and the announcement of job cuts were blunted to some extent with the better than forecast third quarter earnings, which slowed sharply, but still exceeded Wall Street projections.