Shares in Twitter dropped to their lowest levels since the company’s stock market flotation this week, as it reported slower than expected user growth and a net loss of $132- but ad revenues reached $226m.
View this video from Bloomberg discussing Twitter’s financial results below:
The number of active users on the social network reached 255 million in the first three months of 2014, up 5.8% on the previous quarter but below analysts’ expectations.
Twitter also reported a net loss of $132m (£78m) for the latest quarter.
Twitter said the number of monthly active users was up 25 per cent from a year ago at 255 million, and 198 million were on mobile devices.
Advertising revenue hit $226 million, an increase of 125% over the past year, with mobile accounting for roughly 80% of the total.
It posted revenue of $250m, $226m of which came through advertising.
Despite higher user growth than the previous quarter, when Twitter saw just a 3.8% rise, Twitter’s stocks fell by more than 11% in after-hours trading, sending the price below its initial public offering of $38.80 per share.
“We had a very strong first quarter. Revenue growth accelerated on a year over year basis fuelled by increased engagement and user growth,” chief executive Dick Costolo said on Tuesday.
“We also continue to rapidly increase our reach and scale.”
Costolo said that with the integration of the mobile advertising startup MoPub, “we now reach more than one 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 made a splash last year on Wall Street with a surge on its market debut, but its shares have struggled since then amid doubts on its pace of growth and progress toward profitability.
The rise in Twitter active users comes after four consecutive quarters of declining growth, but the turnaround was not strong enough to convince investors.
Using a popular Wall Street measure excluding special items, Twitter essentially broke even on a per-share basis, according to its quarterly report.
Read the official announcement here