META Meta Platforms Inc

Twitter Inc. posted another quarter of slowing revenue growth Thursday and said it would slash 9% of its global workforce, in its first report since recent takeover interest from potential suitors including Salesforce.com Inc. dissipated.

The social-media company's revenue rose 8.2% to $615.9 million, its smallest gain and ninth straight period of declining growth. Analysts expected revenue of $606 million.

Twitter recorded a loss of $102.9 million, or 15 cents per share. Excluding certain expenses such as stock-based compensation costs, Twitter posted a profit of 13 cents a share, compared with the average analyst estimate of 9 cents per share.

Twitter's monthly active users totaled 317 million in the third quarter, up just 1.7% from the second quarter. Cowen & Co. analysts had projected Twitter's user base would rise to 315 million.

The company said its restructuring and workforce cuts focus primarily on reorganizing its sales, partnerships and marketing efforts as it seeks to become profitable in 2017. Twitter said it expects to incur cash costs of $10 million to $20 million, as well as stock-based compensation expense of $5 million to $10 million associated with the restructuring, with most of the related charges coming in the fourth quarter.

Shares, which have fallen 45% in the past 12 months, rose 4.3% to $18.07 in premarket trading.

Twitter's results follow weeks of frenzied reports that the company was fielding acquisition offers from Salesforce.com, Walt Disney Co. and Google parent Alphabet Inc.—only to have them all walk away earlier this month. Analysts don't expect another round of takeover interest soon.

The lack of interest, at least for now, puts added pressure on Chief Executive and co-founder Jack Dorsey, who has struggled to accelerate revenue growth since retaking the CEO position a year ago. Mr. Dorsey must reassure investors that the struggling company is making headway on its strategy to reignite user growth, stem slowing advertising revenue and rein in costs.

Skepticism among some analysts has deepened. Before Thursday's results, Morgan Stanley analyst Brian Nowak wrote that marketers are planning to decrease ad spend on Twitter compared with a year earlier in favor of other services with "greater reach, lower effective pricing and superior targeting."

Indeed, as Twitter's woes continue, bigger rivals like Facebook have pulled further ahead while smaller upstarts like Snapchat, Instagram and Pinterest are quickly gaining ground. There could be "another wave of defections" at Twitter because of its lack of traction on recent product initiatives, SunTrust Banks Inc. analyst Bob Peck wrote in a recent research note.

Besides incremental product tweaks, Mr. Dorsey is banking on the social media company's push to live-stream premium content such as National Football League games and the recent presidential debates. Twitter struck a $10 million deal with the NFL to live stream Thursday night games.

Twitter attracted an average audience of more than 200,000 viewers for its first seven games through last week under the partnership. But only two of the 10 Thursday night NFL games it acquired the rights to stream took place in the third quarter.

An average of 243,000 viewers a minute tuned into the first game, featuring the New York Jets against the Buffalo Bills on Sept. 15. The second game between the Houston Texans and New England drew a bigger average audience—roughly 327,000.

More than bringing in new ad-revenue opportunities, Twitter executives hope its live-streaming content will help broaden its user base to mainstream users—namely, those who haven't understood the purpose of Twitter—and increase engagement on the platform as people tweet about the games and shows being broadcast.

In a recent report, Wells Fargo analyst Peter Stabler noted that an analysis of Nielsen Social TV ratings data showed that Twitter enjoyed a substantial bump in the share of social engagement around its inaugural NFL live-stream on Sept. 15. But that lift has steadily fallen during subsequent games.

Morgan Stanley analysts project the NFL deal will generate just $11 million in incremental ad revenue in the fourth quarter. Excluding that benefit, Twitter's owned-and-operated ad revenue will grow just 1%, according to Morgan Stanley.

Write to Deepa Seetharaman at Deepa.Seetharaman@wsj.com

(END) Dow Jones Newswires

October 27, 2016 07:55 ET (11:55 GMT)

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