Twitter (TWTR 17.02, -2.59) has slumped 13.2%, as disappointing user growth overshadows better than expected results. Today's decline puts shares back at levels from the middle of June.
The social media site reported above-consensus second quarter earnings of $0.08 per share on a 4.7% year-over-year decline in revenue to $574.00 million, which was also ahead of expectations. Furthermore, the company's adjusted earnings before interest, taxes, depreciation, and amortization totaled $178.00 million, which was well ahead of guidance for EBITDA between $95.00 million and $115.00 million. Adjusted EBITDA made up 31.0% of total revenue, up from 29.0% of revenue one year ago.
However, the impact of positive financial metrics has been more than offset by concerns about Twitter's ability to continue growing its user base. Average monthly users totaled 328 million, which was up 5.0% year-over-year, but was in-line with the total from the first quarter.
Sequential Monthly Active User growth has been difficult to come by. In the first quarter of 2017, monthly active users increased by 3.0% quarter-over-quarter. This followed three consecutive quarters of 1.0% quarter-over-quarter growth.
Ad engagements increased 95.0% year-over-year and rose 4.0% quarter-over-quarter. Advertising revenue grew 3.0% quarter-over-quarter to $489.15 million, but was down 8.0% year-over-year.
Looking ahead, Twitter expects that third quarter adjusted EBITDA will be between $130 million and $150 million while adjusted EBITDA margin is expected between 25.0% and 26.0%. For the full year, Twitter expects that total non-GAAP expenses will decline between 3.0% and 6.0% year-over-year after previous guidance called for a decline of up to 5.0%.