Twitter Revenue Nearly Doubles But User Growth Remains a Problem

Getty
Twitter CEO Dick Costolo

The company reported fourth quarter revenue of $479 million, a 97 percent bump over the same period last year.

Twitter reported better-than-expected fourth-quarter earnings despite slow user growth. 

The social media company reported revenue of $479 million, a 97 percent increase over the same period last year, and earnings of 20 cents per share minus some expenses. That beat analyst expectations of $453 million in revenue and adjusted earnings of 6 cents per share.

User growth continues to be a problem for the company. There were 288 million average monthly active users, a 20 percent increase over the same period last year. That's off the 295 million average MAUs that analysts had been expecting. It represents an addition of just 4 million net MAUs in the quarter. Twitter is attributing a loss of 4 million MAUs during the last quarter on problems integrating with Apple's new iOS8. 

For the year, Twitter reported revenue of $1.4 billion, up 111 percent over 2013, and adjusted earnings of 14 cents per share. 

Twitter shares immediately dropped more than 6 percent in response to the company's user metrics but quickly rebounded and were trading up more than 6 percent on the Nasdaq a half hour after the report was released. 

The fourth-quarter earnings come at an important inflection point for Twitter, which went public in November 2013. CEO Dick Costolo has come under fire in the media recently, in part due to the departure of top-level executives including COO Ali Rowghani, and some observers have predicted that he could be replaced this year. The Twitter board and founders have since come out strongly in support of Costolo. Co-founder Jack Dorsey unleashed a tweetstorm in late January in which he noted that "there isn't a single person who has been thinking longer about Twitter" than Costolo. 

Meanwhile, the company has introduced a number of new features over the last week, including private group chat and the ability to upload and edit video. The company has also struck a deal with Google to make Tweets appear in search results. 

In recent days, Costolo has taken a strong stance against abusive behavior and so-called trolls on the Twitter. In internal memos reported on by The Verge, Costolo told employees, "We suck at dealing with abuse and trolls on the platform and we've sucked at it for years." He added that Twitter loses "core user after core user by not addressing simple trolling issues that they face every day."

Speaking on a conference call with investors, Costolo briefly addressed executive turnover at Twitter, noting that execution at the company has improved. "I'm delighted about that and the results that I'm seeing from the team," he added. 

He also provided more context about the company's video plans, commenting that Twitter's new video tools are about sharing videos in the moment, while Vine, which sees 1.5 billion loops a day, is a creative platform. As Twitter's new consumer-oriented video product grows, the company plans to support both user-generated content and content from partners, and plans to roll out new features that help users that fall into the middle of those categories. 

comments powered by Disqus