Twitter, the under-pressure social media company, reported results on Thursday morning, and let's face it, they kind of sucked.
The company reported stagnant user growth (in fact it actually lost users during the quarter, once you exclude people, typically in emerging markets that use an SMS version of the service), with its all-important active user base steady at 320 million. Oh, and it lost $US90 million during the quarter and its shares sank by as much as 12 per cent in after-hours trading (they had recovered somewhat to be down just 3 per cent at the time of writing).
The only good thing about the result was the way it was communicated. For the first time, the company eschewed part of the traditional quarterly earnings call ritual that just annoys analysts, the media and investors.
Instead of reading out, word for word, a prepared statement that everyone who cares already has in front of them, outlining the quarter that was, Twitter issued a letter to shareholders and jumped straight to analyst Q&A. It was even broadcast on Periscope, the company's video live-streaming service.
And it was great.
CEO Jack Dorsey had more time to articulate the company's plan to grow its user base through (controversial) product improvements such as a filtered timeline and making the service easier for new users to understand. "We really want to focus on live because it's the fastest and easiest way to understand the power of Twitter," he said.
Thought Twitter exec team sounded good and clearest yet about plan on earnings call. Hard part, of course, is delivering.— Dan Frommer (@fromedome) February 10, 2016
It's always darkest before the dawn, and whether these initiatives work in terms of jumpstarting user growth remains to be seen. Twitter's problem at the corporate level has never been about making money from its users - it has been about not having enough users in the eyes of Wall Street. But, even if it can't achieve that, and the market reaction suggests investors have their doubts, I still believe it will be just fine once people come to grips with the reality that Twitter is just not going to be as big as Facebook.
Either that or it ends up being acquired by somebody (perhaps Google).
At any rate, Twitter is not the first company to do away with the boring prepared earnings statement recital. Netflix pioneered it, and electric car maker Tesla does a similar thing, and it has worked really well for both of them.
At least one Australian company, Telstra, has already broadcast its profit result on Periscope, but jumping straight to Q&A doesn't seem to have caught on here yet. Here's hoping it does soon.
