Twitter beat earning expectations today, announcing a more than doubling of first quarter revenue to $250 million, but the social network fell short in the most important measure: growth in new users.
Twitter announced that it has 255 million monthly active users, up 14 million from the total it had at the end of 2013. That figure is up 25% over last year at this time, but only 5.8% since last quarter, a growth rate better than the 3.8% it eked out last quarter, but still on the low end of analysts’ expectations.
Another closely watched engagement metric is timeline views, which reached 157 billion, an increase of 15% year-over-year, but another indication of slower than idea growth since timeline views increased 26% YoY last quarter.
In after-hours trading on the NASDAQ, Twitter was down nearly 10%, after closing the trading day up 4.6% at $42.62.
The revenue news continued to positive and above expectations, coming in well above analysts’ predictions of $241.5 million. Earnings per share were $0.00, also beating the $-0.03 expectation. Advertising revenue was $226 million (up 125% YoY) with mobile advertising contributing about 80% of the total. And advertising revenue per thousand timeline views was $1.44, an increase of 96% year-over-year.
“We had a very strong first quarter. Revenue growth accelerated on a year over year basis fueled by increased engagement and user growth,” Twitter CEO Dick Costolo said in the earnings release. “We also continue to rapidly increase our reach and scale. With the integration of MoPub, we now reach more than 1 billion iOS and Android users each month, making us one of the largest in-app mobile ad exchanges in the world and the only one at scale to offer native in-app advertising.”
Twitter, playing catch-up to Facebook and its 1.28 billion monthly active users, has been working hard in the past few months make itself more accessible. It’s advertising business is strong now but the consensus in the business it that to be viable long term it needs to extend its reach beyond its base beyond the journalists, PR/marketing professionals and tech users who use it heavily.
With that in mind, the company rolled out a redesigned — and many say Facebook-like — profile page for the desktop. It even tested making @replies and hashtags — which Twitter head of news Vivian Schiller called arcane — less prominent.
It’s hard to say whether these efforts are helping, but one Twitter executive in a Wall Street Journal article this week seemed to hint that they were overdue.
Twitter, said COO Ali Rowghani, needs better explain its value for users. “The challenge with that is it’s somewhat abstract to explain and we’ve never actually systematically as a company made an effort to explain it, and instead what’s happened is the world has kind of defined what Twitter is for us,” he said. “For good and for bad.”
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