Twitter released its most recent quarterly report on Thursday, accompanied by an announcement of a $400 million share buyback, provoking market ambivalence that has some investors doubting the company’s future success.
The new quarterly report, the first since Parag Agrawal stepped in as CEO of Twitter last November, revealed underwhelming metrics for revenue and user growth, disappointing those who had hoped that the new leadership would see immediate success in key business metrics.
Recent months have been tumultuous for the social media network, which has undergone significant changes in the wake of founder Jack Dorsey’s departure as CEO. Agrawal has made his presence known with a prompt and ambitious roster of changes, some of which have provoked criticism.
Twitter has also made an ambitious push into live audio chat with Twitter Spaces, which became available to all users in October of last year. Likely inspired by the breakout success of Clubhouse in 2021, Twitter has pushed the Spaces feature in recent months, and many users have flocked to the new feature to conduct live audio conversations with followers.
Advertising revenue grew by 22 percen from the final quarter of 2020, falling just short of analysts’ expectations of $1.43 billion total (the actual revenue was $1.41 billion). Twitter also reported 6 million new users during the recent quarter, a significant increase but far below the levels needed for the company to meet its ambitious goal of 315 million users by the end of 2023.
While these results were underwhelming, Twitter prevented shares from falling drastically by announcing a $400 million stock buyback simultaneously with the quarterly report. Stocks rose in response to the announcement on Thursday morning, but had altogether fallen by 2 percent by the end of trading.
The market’s ambivalence in response to the report is reflective of the content therein: Twitter has demonstrated steady, if somewhat underwhelming, growth in a number of key metrics, with ambitious approaches to grow the site’s audience and revenue. While Agrawal may have hoped for a more exciting report this quarter, the underwhelming results of the latest release make for a stunted beginning to his tenure as the new CEO.
