It was June 11, 2015, when Twitter (NYSE:TWTR) announced Dick Costolo would step down as CEO and be replaced by Twitter chairman and co-founder Jack Dorsey. Initially serving as an interim CEO, Twitter made the position permanent later that year.

Before choosing Dorsey as its new, permanent CEO, Twitter said it was looking for someone who could lead the company's "next phase of growth." But since Dorsey came back, Twitter's stock has plummeted 51% and its revenue growth has turned to declines.

Long story short, investors will be looking for some signs of a turnaround when Twitter reports its third-quarter results.

A woman using a smartphone

Image source: Getty Images.

Twitter recently set a date for its third-quarter earnings report: Oct. 26. Here's what investors should watch for when the report goes live.

Revenue

It wasn't long ago when Twitter was growing revenue at extremely high rates. In 2015, for instance, it soared 58% year over year. And while revenue growth decelerated rapidly in 2016, it was still in the double digits, at 14%. But the revenue trend recently has been concerning.

Twitter's revenue tumbled in both quarters during the first half of 2017. First-quarter revenue fell 8% year over year and 5% year over year in the second quarter. 

Unfortunately, Twitter doesn't expect its revenue growth rates to improve during the second half of the year. "[W]e do not expect to see our total revenue growth rate improve in the second half of 2017 due to headwinds in the second half (of approximately $75M) associated primarily with de-emphasized revenue products," Twitter explained in its second-quarter shareholder letter. Furthermore, even after adjusting to exclude the impact of these headwinds, Twitter only said it "could" see revenue growth during this period.

Monthly active users

Twitter's underwhelming user growth became a hot topic again in after its second-quarter results. The stock fell sharply when the company reported results, primarily because user growth came to a halt on a sequential basis as total monthly active users remained at 328 million.

Management has repeatedly said that revenue growth will lag user growth. So, it's clear why Twitter's user growth is so important. Of course, Twitter has also said it's more useful for investors to view the company's user growth on a year-over-year basis instead of a sequential basis. And if this metric is a better indicator of whether revenue growth is on the way, investors can take some comfort in the fact that its second-quarter monthly active users were up 5% year over year. Still, it would be nice to see Twitter's sequential growth return to growth in Q3.

Daily active users

Twitter has been increasingly trying to shift investors' attention away from monthly active user growth to daily active user growth.

A businessman using a smartphone in the back of a cab

Image source: Getty Images.

Daily active users increased by 12% year over year in Q2. Though the growth was lower than the 14% growth the key metric saw in Q1, it was notably the second-highest growth in daily active users Twitter has seen in the past eight quarters. CFO Anthony Noto said during the company's second-quarter conference call that the steep growth "bodes really well" for Twitter's future revenue growth.

Look for more double-digit year-over-year growth in daily active users in Q3.

Twitter will report its third-quarter results before market open on Oct. 26 at approximately 4:00 a.m. Pacific Time.

Daniel Sparks has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Twitter. The Motley Fool has a disclosure policy.