Yesterday Twitter unveiled their third quarter 2014 earnings report and while they once again met or beat analyst expectations across the board, the key monthly active user number (MAU) came in slightly softer than expected, and the stock tanked accordingly.
Twitter added 13 million new MAUs for Q3 2014, which was below the 14 to 17 million forecast range. But here’s the thing: 13 million really isn’t that bad. It maintains Twitter’s average over the previous four quarters, and is exactly what I predicted when I last looked at these numbers at the end of July.
Moreover, it keeps Twitter on track for a chance at reaching 300 million MAUs by the end of this year. Here’s your updated chart:
As you can see I forecast 297 million MAUs in the Q4 2014 earnings report. To reach 300 million, Twitter would need to add 16 million MAUs in Q4, which is entirely doable. Even if we get another 13 million MAU quarter Twitter should pass 300 million MAUs sometime in January, so it’s not looking too bad overall.
However, for investors there’s a wealth of difference between “not looking too bad” and “exceeding expectations”, so unless Twitter bats the MAU number out of the park in Q4 – which means 16 million plus – the stock probably isn’t going to be taking off anytime soon.