Twitter beat estimates on its top and bottom line but monthly active user growth was flat from the previous quarter.
Twitter reported a lower-than-expected number of monthly active users in its second-quarter earnings report before the bell Thursday.
Shares of the company dropped 9 percent in pre-market trading, after the company reported 328 million monthly active users, unchanged from the previous quarter.
Advertising revenue also decreased 8 percent year-over-year, totaling $489 million compared to $535 million in the same quarter last year.
Twitter started the year strong when the company reported 9 million more monthly active users than expected in the first quarter. User growth has been a concern for investors, who see the 328 million active Twitter users as severely lagging behind Facebook’s more than 2 billion.
A crackdown on abusive activity is making progress, as Twitter reported it is taking daily action on ten times as many abusive accounts compared to the same time last year. By limiting functionality or suspending accounts, Twitter found abusive users generated 25 percent fewer abuse reports. Mistreatment on the platform has scared off both advertisers and potential buyers, as Salesforce ruled out a bid for Twitter in part from concerns the social platform could not handle online abuse and trolls.
Online advertising is increasingly an issue for Twitter, as other technology companies such as Alphabet and Facebook continue to eat up more digital advertising revenue. Advert engagement grew 95 percent year-over-year in the second quarter, yet ad sales fell 8 percent from the previous year.
Digital trends analysis firm eMarketer projects Twitter’s advertising revenue will grow 1.6 percent this year, to $2.28 billion, with 90 percent of that revenue coming from the mobile market. Despite the focus on mobile, eMarketer believes the company’s share of global market advertising will shrink to 1.5 percent.
Shares of Twitter remain well below its IPO price of $26.
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