Skip to main content

Twitter's latest financials are strong but its executives are jumping ship

Twitter's latest financials are strong but its executives are jumping ship


Shares were up after hours, but turmoil continues in the ranks of management

Share this story

Scott Olson/Getty Images

Twitter posted higher than expected revenues and profit today, and the stock was initially up more than 10 percent in after-hours trading. But interim CEO Jack Dorsey said that the company still was not satisfied with its growth, adding just 2 million core users this quarter. And Twitter's head of growth, the project manager on its Discovery feature, and the vice president of project management all departed, adding to the recent exit by the company's head of communications. The stock quickly gave up its early gains and is now trading down six percent.

The company reported $502 million in revenue and profit of 7 cents a share, roughly twice what it posted for the same period last year. At the same time Christian Oestline, vice president of product management, announced he was headed to YouTube, and Todd Jackson, former product management, announced he was leaving for Dropbox.

The two front runners to take the CEO spot at Twitter are Adam Bain, the head of Twitter's successful business unit, which has largely exceeded investors expectations despite anemic user growth, and its prodigal son, Dorsey, a co-founder, former CEO, and last minute replacement for former chief Dick Costolo. Our sister site Recode reported today that Dorsey is still very much angling for the job, despite being the CEO at Square, which recently filed for an IPO, and would presumably like his full attention.

Twitter did add an additional 6 million users if you count the people who use the service over SMS. But the company does currently earns little money from them. Twitter continues to have an outsized presence in the media, politics, and public discourse, thanks to its popularity with the rich, famous, and powerful. You only need to look back one week to the Twitter spat between Nicki Minaj and Taylor Swift, which became the story for several days. Hundreds of millions of people who never use Twitter no doubt saw those tweets and perhaps even a few ads surrounding them.

On today's earnings call Dorsey told investors that the company's failure to derive value from all those logged out users was "unacceptable and we're not happy about it." If the company can change the way it executes, Dorsey believes it will become the first place people check every morning, and the best place to share their ideas.

Twitter's chief financial officer Anthony Noto used some data to put that in perspective. In most developed markets Twitter has a 95 percent brand awareness, but only 30 percent penetration. This means that it is only reaching "technology enthusiasts and early adopters" and has still failed to transition into the "mass market".