Twitter will report earnings for the first quarter of 2017 on Wednesday before the market opens on Wednesday. Last year, Twitter fell short of its revenue estimates in the 4th quarter and no estimates were provided for Q1. However, they did offer estimates of their earnings before EBITDA and margin range for analysts to forecast a range of revenue. Surprisingly the EBITDA range was almost 100million less than analyst forecast.
This will be Twitters first ever revenue decline. Overall analysts are estimating decline by 13.9% from Q4 last year. Twitter had warned shareholders about the stunned growth cause of ad revenue.
The lagged growth can be caused by few factors, which include the super competitive ad market. Snapchat didn’t do justice to their reports and Facebooks is clinging to their revenue because of the Instagram growth. Their website is close to saturation.
The second factor being them turning attention to different products, ditching their previous system. Twitter is now concentrating on video ads. It could hurt their upper and lower limit but will improve margins in the long run. Though the numbers are important investors would like to look at other factors as well.
Though a decline in revenue Twitter. The social media giants reported a substantial growth in user base (11%) and if the company shows progress toward its long-term goals even if it falls short of analysts expectations, it could be a good buying opportunity for those willing to take a risk on the ailing social network.