Twitter Shaves Q3 Guidance; Shares Collapse in the After Hours

Any way you slice it, these numbers were an abomination. They aren’t adding new users, even with their fake bot creating machines. The company just guided revenues down by an astounding $90 million and they’re far from being free cash flow positive. One must ask the question: is @Jack the one to lead this company?

The bottom line is this: On June the 10th, 2015, the day Jack Dorsey took over Twitter as CEO, the share price was $36.85. Right now, in the after hours, the stock is trading at $16.70 (-10.5%), down 53% since his reign of terror began.

• Reports Q2 (Jun) earnings of $0.13 per share, $0.04 better than the Capital IQ Consensus of $0.09; revenues rose 19.9% year/year to $602 mln vs the $607.41 mln Capital IQ Consensus.
• MAUs
  • Average monthly active users (MAUs) were 313 million for Q2, up 3% year-over-year and compared to 310 million in the previous quarter.
  • Average U.S. MAUs were 66 million for Q2, up 1% year-over-year and compared to 65 million in the previous quarter.
  • Average international MAUs were 247 million for Q2, up 4% year-over-year and compared to 245 million in the previous quarter.
  • Mobile MAUs represented 82% of total MAUs.
• Revenue Breakdown
  • Advertising revenue totaled $535 million, an increase of 18% year-over-year.
  • Mobile advertising revenue was 89% of total advertising revenue.
  • Data licensing and other revenue totaled $67 million, an increase of 35% year-over-year.
  • U.S. revenue totaled $361 million, an increase of 12% year-over-year.
  • International revenue totaled $241 million, an increase of 33% year-over-year.
• Ad Engagements
  • Total ad engagements were up 226% year-over-year.
  • Cost per engagement (CPE) was down 64% year-over-year.
• Co issues downside guidance for Q3, sees Q3 revs of $590-610 mln vs. $681.34 mln Capital IQ Consensus Estimate.
• For Q3: 
  • Adjusted EBITDA to be in the range of $135 to $150 million;
  • Stock-based compensation expense to be in the range of $165 to $175 million.
• For FY 2016 expect:
  • Capital expenditures to be $300 to $375 million (Prior $300-425 mln);
  • Adjusted EBITDA margin in the range of 26-27% (Prior 25-27%).