Is there some reason articles like this doesn't include profits? Revenue is specified along with a number of other key metrics, but not profit.
The overall conclusion seems to be the same as with Meta last week: It's going well, but not as well as predicted. The slower than expected growth is only a problem, because the stock market likes predictability and will punish any company unable to correctly foresee the future.
> punish any company unable to correctly foresee the future
If you're calculating the present value of future profits and the rate of increase in profits declines then the present value can swing wildly. That's not "punishment". It's the market self correcting.
Because profit doesn't matter as much for a growth story, growth does. They do it to themselves... in the face of this 'miss' the CEO continues to pitch the growth story: https://www.theverge.com/2022/2/10/22925114/twitter-earnings... So it should be no surprise when the financial reporters and markets flog them when they miss.
Profit isn't very meaningful without a lot of context. A growing business could plow all of their would-be profits back into growing their business, making it look like they are losing money. Or a failing business could cannibalize itself to get a couple quarters of profits at the cost of destroying its long term prospects for success. Revenue is a much more concrete figure that sort of tells its own story, unlike profit.
That's is an interesting take, because the company I work for is the exact opposite. Revenue is useless, because you can just create all the revenue you want.
Among other things, we resell hardware and software. The basic idea is that customers can get a Dell, or Oracle server and a license for an Oracle database from us, when buying hosting. This saves them the trouble of dealing with multiple suppliers. The hardware and software business is just sort of a side thing, but we can generate crazy amounts of revenue by losing money on hardware. The idea is that we make the money back longterm on hosting. We never use revenue as a meaningful KPI, because we know that some years it will be inflated like crazy by hardware or software sales (which aren't profitable).
So I don't really see revenue as useful figure either, not without also knowing if you're profitable.
Your company has a different model than Twitter. Some companies need to measure Revenue, some Profit and some Growth - and many will switch which is the important one as they grow (or shrink).
It’s called a Ponzi scheme. It works until it doesn’t. See Robinhood and Peleton.
All five of the Big Tech companies were profitable before they went public. Even Amazon had positive margins and they were plowing money back in to the business. Most of the former unicorns don’t have positive margins.
“Growth” is okay if your funneling profits back into your business. But see DoorDash. How do you not money delivering food when everyone is afraid to leave their house like in 2020?
It’s not about growth, it’s about attrition. Every VC is hoping that they can
pawn their money losing investments off to a gullible public.
This was exactly the feeling in the air around year 2000. Irrational exuberance is what they termed it. Be interesting to see how the current climate evolves.
The overall conclusion seems to be the same as with Meta last week: It's going well, but not as well as predicted. The slower than expected growth is only a problem, because the stock market likes predictability and will punish any company unable to correctly foresee the future.