Tuesday marks
Since his appointment three weeks ago, Dorsey has overseen the launch of a new hand-curated content tab called "Moments," cut 8% of Twitter's total staff, gave a third of his Twitter stock back to employees and helped bring on former Googler Omid Kordestani as chairman of the board.
Dorsey hasn't offered any updates on user growth, which he admitted has been unsatisfactory, during the company's last earnings call. Analysts will likely be paying more attention to user growth than any other metric as Twitter tries to become a tool for the masses. However, the company did recently give investors some good news in a company filing this month, saying it expects revenue and a measure of its adjusted earnings to be at or above the high end of its previous forecast, revenue between $545 million and $560 million and adjusted profit of between $110 million and $115 million.
A survey of 38 analysts polled by
Here are five areas investors will be closely watching on Tuesday:
1. User growth: Slowing user growth is still Twitter's biggest challenge, and investors will be eagerly looking for any signs of increased reach and activity on the service. RBC Capital analyst Mark Mahaney estimated in a note that Twitter's user base has grown by about 7 million people during the last quarter, rising to a total of 323 million. If accurate, this gain would reflect growth of 13% year-over-year, which is slower than the second quarter and first quarters, with 15% and 19% year-over-year growth respectively. Dorsey has said that making the site simpler and more immediately valuable to the user are key to turning its 316 million monthly active users into a billion monthly active users. Twitter has fewer users than several other younger communication apps, such as Instagram with more than 400 million monthly active users and WhatsApp with 900 million monthly active users.
2. Product updates: Twitter's new "Moments" tab is part of the network's larger effort to give the site more mainstream appeal. It will be interesting to see if Twitter offers any updates on whether the tool, which is focused on live events and trending content, and other curation efforts this year, such as "while you were away," have boosted activity on the service. Investors will also be listening for details about future product plans. During a conference call announcing his CEO appointment this month, Dorsey said “dramatic” product changes next year will affect not only Twitter’s main app, but also Twitter’s video apps Periscope and Vine. And although investors are eager for Twitter to appeal more to mass audiences, Dorsey said he is focused on building new tools both for Twitter’s daily, most passionate users, as well as for the broader public. Twitter appears to have seen an increased product launch pace under Dorsey as CEO, both around consumer features as well as advertising products, Robert Peck, an analyst at SunTrust Robinson Humphrey said this month. It would please investors for this trend to continue. Investors will also be eager for insight into whether Twitter's recent layoffs, which include engineers, affect the pace of product launches.
3. Juggling jobs: Dorsey has said he is fully committed to being CEO of both Twitter and Square, the mobile payments startup he founded. But Dorsey's situation raises questions about how Twitter will do when he's focused on Square, which is expected begin its IPO roadshow next month. Investors will want to know what steps Dorsey has taken to structure leadership at each firm to make sure both do well.
4. Board reorganization: Twitter's board has experienced some reshuffling over the past few months, and investors will be listening for hints at whether any additional changes are in the works. Former
5. Advertising revenue growth: Twitter has built a strong advertising business, but faces fierce competition from Google and Facebook. Twitter is expected to take in about 8%, or $2 billion, of global social network ad spending this year, according to eMarketer; by comparison, Facebook is expected to rake in nearly 65%. What's more, Twitter's revenue growth has been slowing -- revenue growth was 63% year-over-year in the second quarter, down nine percentage points from the first quarter. It remains a question as to how big