After market close on Tuesday July 28, Twitter (NYSE: TWTR) will field questions from analysts during its second-quarter conference call. But the company will also go beyond this practice and answer some questions from users on Twitter.
If management were to answer your question, what would you ask? Here are three topics many investors may want to know more about.
How many users can Twitter attract?
With all the fuss about Twitter's slower-than-expected user growth, and following Twitter CEO Dick Costolo's decision to step down, it's time the social media company stepped up its transparency about what it wants to achieve with user growth going forward. After all, slower-than-expected user growth is probably the main reason why Twitter is looking for a different CEO. It's hard to know if growth is slower or faster than management expects without clear guidance on Twitter's long-term vision for the size of its user base.
When Twitter reported first-quarter results, management said it had 302 million monthly active users, up 18% from the year-ago quarter, and 5% sequentially. While 302 million active users is a sizable number, and 18% year-over-year growth in users isn't bad, these levels of users and this growth aren't living up to the Street's expectations for the company. After all, critics wonder, shouldn't Twitter have snapped up at least a third of Facebook's 1.44 billion monthly active users by now?
Twitter needs to offer more insight into its expectations for users. Does management believe Twitter is destined to always have a fraction of Facebook's monthly active users? Is Twitter a niche? Or does management expect future moves by the company to dramatically expand its addressable market?
Is new-user retention improving?
Central to Twitter's problem in rapidly growing its user base is underwhelming new-user retention. But the company has been vocal about efforts to change this.
The strategy to improve new-user retention? Twitter wants to provide immediate value through a compelling timeline the moment a user signs up. The company hopes a valuable and instant timeline will make new users more willing to stick through the learning curve of understanding what Twitter's core users mean with their hashtags, slang, and symbols packed into 140-character-sized tweets.
Is a 140-character limit still relevant?
Tweets have always been limited to 140 characters. While it's not fair to criticize this move because it obviously played an important role in turning Twitter into the $23 billion company it is today, it's at least worth considering whether or not this is still the right figure for character limitation today.
As Twitter attempts to appeal to a larger audience and increase new-user retention, could raising the character limit help capture higher engagement levels from new users? Could it open the door to more opportunities, and to more ways to communicate on the platform without handicapping the experience?
While Twitter hasn't hinted it will lift the character limit for Tweets in the future, it has announced it would remove the limitation in native direct messages this month.
If the character limit for tweets is ever increased, investors shouldn't expect a sizable change. Increasing the limit by too many characters could potentially ostracize the company's core users and burden the company's mission to help people easily share and discover information instantly.
Anyone who wants a chance at getting Twitter management to answer their question during the conference call can tweet their question during the call to @TwitterIR. Be sure to include hashtag #TWTRearnings in the tweet. The conference call begins at 2:00 PM PT.
For a closer look at expectations going into Twitter's first-quarter results, check out this earnings preview.
Editor's Note: An earlier version of this article incorrectly stated Twitter's reporting date was 7/21. The article has been updated to include the correct date, 7/28.
Daniel Sparks has no position in any stocks mentioned. The Motley Fool recommends Facebook and Twitter. The Motley Fool owns shares of Facebook and Twitter. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.