Wall Street thinks Twitter’s business is shrinking, and expects the company to report its first-ever year-over-year revenue decline when it releases earnings on Wednesday.
Analysts project that Twitter will bring in profits of one cent per share on revenue of $512 million for Q1. That’s about 14 percent less than the $595 million the company generated in revenue during the same quarter last year.
Twitter has reported year-over-year revenue growth every quarter since going public in late 2013, though that growth was just 1 percent in Q4.
Wall Street could be wrong, of course, but a shrinking business is bad news for Twitter, which already has user growth issues. (The issue being, the growth doesn’t exist.) If the company isn’t adding new users, that means it also isn’t growing its ad inventory, which is the easiest way to bring in more revenue.
Assuming that Wall Street’s expectations prove accurate, it will be interesting to hear how Twitter frames its slowing business. Last quarter, it started pushing a new growth story to investors, highlighting its daily active user engagement as an alternative to the monthly active user totals everyone usually focuses on.
Revenue, though, isn’t really something you can reframe.
Twitter earnings may also generate more chatter about a possible takeover. The company explored sale options in the fall, but the price tag was too much for most suitors to stomach.
We estimated that Twitter could sell for somewhere around $18 billion last August, when the company was valued at $13 billion. Now, Twitter’s market cap is just $10.7 billion.
Twitter reports earnings on Wednesday, before the stock market opens.
This article originally appeared on Recode.net.