Nine years after cofounding Twitter, Jack Dorsey is finally getting his first, and perhaps only, moment speaking for the company to Wall Street.
Twitter will report June quarter results after the market closes Tuesday. It's the company's first earnings report since a shakeup last month when Twitter cofounder Dorsey took over as interim CEO. Dick Costolo, Twitter's previous CEO and a favorite punching bag of Wall Street, stepped down on July 1 without a permanent successor in place.
The social network is currently conducting a CEO search. Dorsey may be a contender, but his role as CEO of Square is thought to rule him out. Adam Bain, the executive who grew Twitter's advertising business, is widely thought to be the top candidate for the job. The earnings call could provide an opportunity for Twitter's top brass to confirm.
Dorsey has never actually run a public company, despite having helped launch Twitter and cofounded Square, the payments startup rumored to be nearing a public offering. This earnings call may prove to be a difficult introduction. (Then again, it can't be much worse than last quarter when a bot leaked earnings results early and tanked the stock.)
Hello! Get Periscope to watch our Q2 earnings prepared remarks and Q&A. We go LIVE at 2pm Pacific @TwitterIR. $TWTR https://t.co/TN3r3VLQEN— Jack (@jack) July 28, 2015
Ever since Twitter went public in late 2013, the company has been judged primarily by its user growth, or lack thereof. Dick Costolo struggled to convince analysts and investors that Twitter had mainstream potential and knew how to unlock it. His departure, announced abruptly just weeks before the end of the quarter, only adds to concerns that user growth is still not where it needs to be.
Robert Peck, an analyst with SunTrust, predicts Twitter's user numbers will be "roughly flat" compared to the previous quarter, according to an investor note obtained by Mashable. In other words, Twitter will be stalled at 302 million monthly active users, the same as last quarter, though the actual number reported may be higher because the company is for the first time including SMS users in the counting.
John Blackledge, an analyst with Cowen and Company, predicts that Twitter will actually lose two million users in the U.S. quarter-over-quarter, according to a separate investor note.
[img src="http://media.ycharts.com/charts/dfe89b609516eb4d2ec243ccf5ed16d6.png" caption="" credit="" alt="TWTR Chart"]TWTR data by YCharts
If that dismal prediction is accurate, it would fall to Dorsey to explain how the service he helped create can compete for users and advertisers against Facebook and newer, faster-growing services like Instagram and Snapchat when its stalling out overall and losing members in key markets.
User growth isn't Twitter's only potential red flag. Twitter stock plummeted more than 20% after its last quarterly earnings report as the company's revenue came in well below estimates. The reason, Costolo explained at the time, was because of worse-than-expected performance from Twitter's direct response advertisements. Investors will be looking to see if this issue continues to weigh on sales.
Twitter is expected to post earnings of $0.04 per share on revenue of $481 million for the June quarter, according to the consensus estimate among analysts surveyed by Thomson Reuters. That would be up from earnings of $0.02 per share on revenue of $312 million in the same quarter a year ago.