In its second-quarter earnings report today, Twitter announced a decline in monthly active users which resulted in a massive 19% drop in its stock price. According to CNBC, the company blamed the decline on not moving to paid SMS carrier relationships in certain markets where users have better access to Twitter or Twitter Lite.
Twitter also noted that about 3 million accounts were affected by making changes to improve the “health” of the platform and some impact from GDPR, a set of regulations in the European Union intended to protect consumer data.
The company removed about 70 million accounts in May and June, although CFO Ned Segal said most of those were not included in its reported metrics.
At the same time, Twitter also issued weak guidance with adjusted EBITDA between $215 million and $235 million for the third quarter. The company expects stock-based compensation expenses to be around $300 to $350 million for the full year, down from a range of $350 to $450 million previously expected.
“As a result of our health work, decisions not to renew or move to paid SMS carrier relationships in certain markets, and our decision to allocate resources towards GDPR and health, MAU could decline on a sequential basis in Q3,” it said in its shareholder letter. “Based on our current level of visibility, we expect the decline to be mid-single-digit millions of MAU.”
You can read Twitter’s letter to its shareholders in full at the SEC website.