Brands Aren't Paying Twitter What The Company Expected And It's Killing The Stock Price

Twitter Inc TWTR shares fell off a cliff in Tuesday's after-hours session, down 11 percent amid disappointing guidance numbers and a warning of soft advertising spend.

In its first quarter report released after the bell, Twitter said adjusted earnings of $0.15 per share beat $0.10 consensus, but forecast second quarter revenue between $590 million and $610 million compared to estimates of $677 million. That cut sent shares near their February 2016 lows.

Just as concerning, Twitter said in its shareholder letter that "[y]ear-over-year revenue growth from large brand advertisers was softer than expected," adding that the category is Twitter's largest contributor to revenue.

While the company did tout strong video ad growth, it also warned that usage of the legacy Promoted Tweet ad format was below expectations.

Twitter MAU was 310 million for the quarter, up from 305 million a quarter earlier. That figure also doesn't include SMS fast followers, the company added.

Year-over-year revenue growth is now 36 percent, down from 74 percent a year ago and 120 percent a year before, filings indicate.

Twitter shares rest near $15.75 as of this writing.