Feeds

Twitter investors squawk as user growth, income disappoint again

Shares sink on fears its popularity has plateaued

Beginner's guide to SSL certificates

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. ®

Choosing a cloud hosting partner with confidence

More from The Register

next story
Facebook pays INFINITELY MORE UK corp tax than in 2012
Thanks for the £3k, Zuck. Doh! you're IN CREDIT. Guess not
Google Glassholes are UNDATEABLE – HP exec
You need an emotional connection, says touchy-feely MD... We can do that
Lawyers mobilise angry mob against Apple over alleged 2011 Macbook Pro crapness
We suffered 'random bouts of graphical distortion' - fanbois
Just don't blame Bono! Apple iTunes music sales PLUMMET
Cupertino revenue hit by cheapo downloads, says report
US court SHUTS DOWN 'scammers posing as Microsoft, Facebook support staff'
Netizens allegedly duped into paying for bogus tech advice
Feds seek potential 'second Snowden' gov doc leaker – report
Hang on, Ed wasn't here when we compiled THIS document
Verizon bankrolls tech news site, bans tech's biggest stories
No agenda here. Just don't ever mention Net neutrality or spying, ok?
Inside the EYE of the TORnado: From Navy spooks to Silk Road
It's hard enough to peel the onion, are you hard enough to eat the core?
prev story

Whitepapers

Why and how to choose the right cloud vendor
The benefits of cloud-based storage in your processes. Eliminate onsite, disk-based backup and archiving in favor of cloud-based data protection.
A strategic approach to identity relationship management
ForgeRock commissioned Forrester to evaluate companies’ IAM practices and requirements when it comes to customer-facing scenarios versus employee-facing ones.
High Performance for All
While HPC is not new, it has traditionally been seen as a specialist area – is it now geared up to meet more mainstream requirements?
Top 5 reasons to deploy VMware with Tegile
Data demand and the rise of virtualization is challenging IT teams to deliver storage performance, scalability and capacity that can keep up, while maximizing efficiency.
Mitigating web security risk with SSL certificates
Web-based systems are essential tools for running business processes and delivering services to customers.