The company reported better-than-expected results, financially. But it only added 9 million monthly active users since the last quarter.
Robert Galbraith / Reuters
Despite beating analyst expectations on nearly every measure — revenue, guidance, earnings and the like — shares of Twitter are still tanking in extended trading after the company reported its fourth-quarter earnings.
That's likely partly because Twitter also said it had 241 million monthly active users at the end of the quarter, a gain of only 9 million new users since the last quarter when it went public with 232 million monthly active users. Twitter's shares fell 12% in extended trading, erasing much of the gains it made following a euphoric post-IPO run that sent shares north of $60.
The company reported fourth-quarter earnings Wednesday of $243 million and earnings of 2 cents per share, above analyst estimates of $217.8 million in revenue and a loss of 2 cents per share.
Not shown: a drop to a share price of around $57.
In order to continue to grow Twitter's business, it has to do a few things: find better ways to target advertisements so it can charge more for advertisements, build new advertising businesses so it can sell new ads, and increase its user base in order serve more ads across the board. While Twitter has done a good job convincing investors that it is building new advertising products, including some that would allow it to advertise on networks outside of Twitter, it still hasn't quite addressed a core question about its growth: can it get more users.
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