Feeds

Twitter investors squawk as user growth, income disappoint again

Shares sink on fears its popularity has plateaued

Top three mobile application threats

Twitter reported first-quarter revenue growth of 119 per cent over the year-ago period, but profitability continues to elude the microblogging network and it still isn't gaining new users as fast as investors would like.

Revenues for three months ending on March 31 were $250.49m, more than double what they were for the same period a year ago. Advertising revenue accounted for 90.4 per cent of that figure, and 80 per cent of Twitter's total ad dollars came from mobile advertising – a healthy sign in today's market.

But on the other hand, Twitter posted a net loss of $132.36m, which was nearly five times as much as it lost in the year-ago quarter.

Admittedly, that figure takes into account $126m of stock-based compensation expense. But even excluding those costs and the effects of taxes and depreciation and amortization expenses, Twitter's net income for the quarter was just $183,000, a sum that wouldn't cover one week's rent on its 295,000-square-foot art deco headquarters in San Francisco.

As a result, Twitter reported earnings of $0.00 – nothing – per diluted share, which actually beat analysts' estimates slightly but pleased no one.

During an earnings call with financial analysts, CEO Dick Costolo glossed over the dollar figures to tout Twitter's recent gains in monthly active users, and throughout the call he repeated that the company's metrics show that new users are just as engaged with the service as established ones.

Monthly active users hit 255 million in the quarter, an increase of 25 per cent from Q1 of 2013, which was in keeping with the sequential growth of 5.5 per cent. Fully 78 per cent of those users were accessing Twitter from a mobile device, for a total of 198 million mobile active users, a 31 per cent year-on-year increase.

Costolo said that Twitter's traffic continued to benefit from one-off events during the quarter, such as the Winter Olympics. As an example, he said, the site served up 3.3 billion views of tweets in the 48 hours following the recent Academy Awards broadcast alone. Favorites and retweets were also up 26 per cent.

More importantly, timeline views – one metric Twitter uses to gauge user engagement – rose to 157 billion during the quarter, up 15 per cent year on year and up 6.1 per cent from the previous quarter.

While all of that sounds good, however, the ratio of timeline views to active users actually fell 8 per cent from the year-ago quarter, indicating that on average, each active user is viewing timelines less often than before.

Costolo said that some of this was due to site redesigns. In particular, he said, Twitter has changed how it displays conversations, so that users no longer need to click around to different timelines to see all sides of the discussion.

But shareholders seemed unconvinced that Twitter has its income and user growth strategy in order, and they battered its shares as a result. The company's stock price sank more than 10 per cent in after-hours trading, to land at a new post-IPO low. ®

Application security programs and practises

More from The Register

next story
BBC goes offline in MASSIVE COCKUP: Stephen Fry partly muzzled
Auntie tight-lipped as major outage rolls on
iPad? More like iFAD: We reveal why Apple fell into IBM's arms
But never fear fanbois, you're still lapping up iPhones, Macs
White? Male? You work in tech? Let us guess ... Twitter? We KNEW it!
Grim diversity numbers dumped alongside Facebook earnings
Microsoft: We're making ONE TRUE WINDOWS to rule us all
Enterprise, Windows still power firm's shaky money-maker
HP, Microsoft prove it again: Big Business doesn't create jobs
SMEs get lip service - what they need is dinner at the Club
ITC: Seagate and LSI can infringe Realtek patents because Realtek isn't in the US
Land of the (get off scot) free, when it's a foreign owner
Dude, you're getting a Dell – with BITCOIN: IT giant slurps cryptocash
1. Buy PC with Bitcoin. 2. Mine more coins. 3. Goto step 1
There's NOTHING on TV in Europe – American video DOMINATES
Even France's mega subsidies don't stop US content onslaught
You! Pirate! Stop pirating, or we shall admonish you politely. Repeatedly, if necessary
And we shall go about telling people you smell. No, not really
prev story

Whitepapers

Top three mobile application threats
Prevent sensitive data leakage over insecure channels or stolen mobile devices.
Implementing global e-invoicing with guaranteed legal certainty
Explaining the role local tax compliance plays in successful supply chain management and e-business and how leading global brands are addressing this.
Top 8 considerations to enable and simplify mobility
In this whitepaper learn how to successfully add mobile capabilities simply and cost effectively.
Application security programs and practises
Follow a few strategies and your organization can gain the full benefits of open source and the cloud without compromising the security of your applications.
The Essential Guide to IT Transformation
ServiceNow discusses three IT transformations that can help CIO's automate IT services to transform IT and the enterprise.