Image Source: Twitter. Copyright Troy Holden (@troy) for Twitter, Inc.

When Twitter (TWTR) reports its second-quarter earnings results today, it won't be too surprising if the company reports a sequential decline in revenue. After missing analyst estimates in the first quarter with revenue of just $595 million versus expectations of $610 million, management guided for minimal growth in the second quarter. At the time, it expected revenue to come in between $590 million and $610 million.

For reference, Twitter posted a 15% sequential increase in revenue in the second quarter last year. The midpoint of its guidance suggests less than 1% growth this year. With a lack of catalysts and big events in the second quarter, lack of growth in the United States, and increased competition from Facebook (META -2.70%) and Snapchat, it's very possible that Twitter will report a second-straight sequential decline in revenue.

No reason to join the conversation

The first quarter is typically unseasonably strong for Twitter, because it has several major live events that drive logins and conversation. Things like the Super Bowl, Oscars, and Grammy Awards, are big events for Twitter. The second quarter thus faces a tough comparable, but Twitter has historically been able to grow its advertising revenue by attracting more big-brand advertisers through its direct sales team.

When asked about the slowdown in the company's outlook during Twitter's first-quarter earnings call, CFO Anthony Noto admitted that the company is no longer adding a lot of brand advertisers, which make up the majority of its advertising sales. "The penetration growth of those advertisers has largely run its course, and we're focused on driving greater share of wallet. And so some of the slowdown that you see is a reflection of the fact that we're moving from two dimensions of growth ... to one dimension of growth."

In fact, this pattern was apparent last year to investors who were paying attention. Twitter got a large bump in the middle of the second quarter from the acquisition of TellApart. The ad tech company powers Twitter's ad network, Twitter Audience Platform, and provided a significant bump to ad revenue coming from third-party publishers.

Last year, Twitter increased its ad-network revenue from $11.4 million to $194.2 million. In Twitter's 10-K, the company noted the "increase was driven, in part, by the acquisition of TellApart." Last quarter, nearly 40% of ad revenue growth came from Twitter's ad network. Now that TellApart is completely folded into Twitter, there's very little to drive revenue growth in the second quarter.

Competition cutting into growth

Aside from facing a tough comparable and a lack of catalysts, Twitter is facing intense competition from Facebook's Instagram and Snapchat. Last year, advertising on Instagram was limited to select partners to which Instagram sold ads directly. This year, Instagram has opened its advertising API, allowing anyone to buy ads on the platform.

Likewise, Snapchat advertising was in its infancy last year, but the company has expanded its ad products, and expects ad revenue to grow sixfold or sevenfold this year, to $300 million to $350 million.

Not only are Snapchat and Instagram competing with Twitter for "share of wallet" with brand advertisers, the two social networks -- along with a bevy of other apps -- are competing with Twitter for users and engagement. Instagram just announced it reached 500 million monthly active users with around 100 million in the United States. Snapchat has an estimated 150 million daily users, which is more than Twitter, which, based on some estimates, has fewer than 140 million people interacting with it daily. In Q1, Twitter reported 310 million monthly active users.

Twitter failed to add any U.S. users in three of the last four quarters. In fact, the company lost 1 million U.S. users in the fourth quarter, negating the gains it made in the previous quarter. Investors shouldn't expect the story to change in the second quarter, especially given the lack of big events. That means Twitter will potentially have less ad inventory in the U.S., its most-valuable market.

Instagram and Snapchat make stronger cases for advertisers' dollars with their larger average daily audiences that generally skew younger. That puts a lot of pressure on Twitter's sales team to grow its ad revenue from the first quarter.

The Street still expects Twitter to report revenue near the high end of management's guidance, at nearly $607 million. That may be too optimistic, setting up Twitter for a potential top-line miss.