Twitter revenue beats estimates but user growth stalls

Today Twitter has released its financial results for the quarter and fiscal year ending on 31 December 2014. The results are mixed, featuring a growth in profit but a tiny growth in user count, which compared to Facebook’s and Instagram’s should be of some concern. The growth in users increased by a mere 1.4% in the fourth quarter, down from 4.8%, compared to the third quarter in 2014.

For the drop in user growth, Anthony Noto, Twitter CFO, hazards possible causes for it. He suggests that the roll out of iOS 8 cost Twitter 4-million monthly active users.

Image: Gigaom

There are also other problems that plague Twitter. The company has been releasing new features to solve some of its problems. These include the rollout of a revamped new user experience, instant timeline for new users to give them an idea of which users to follow and Timeline highlights, a feature that shows tweets users have missed.

Read more: 5 things we learned from Facebook’s quarterly results

Twitter also managed to beat estimations made against its fourth quarter report. It reported a net loss of US$125-million, or 20 cents per share. Non-GAAP earnings sat at 12 cents per share on a revenue of US$479-million, a 79% increase year-over-year. In doing so, the company beat Wall Street’s 6 cents per share with revenue of US$453.1-million predictions.

“We closed out the year with our business advancing at a great pace. Revenue growth accelerated again for the full year, and we had record quarterly profits on an adjusted EBITDA basis,” said Dick Costolo, CEO of Twitter.

“In addition, the trend thus far in Q1 leads us to believe that the absolute number of net users added in Q1 will be similar to what we saw during the first three quarters of 2014.”

In the report Twitter also announced its financial fourth quarter 2014 product highlights. These included, amongst others, an “advertising revenue [that] totalled US$432-million, an increase of 97% year-over-year”, “mobile advertising revenue was 88% of total advertising revenue” and “international revenue totalled US$164-million, an increase of 149% year-over-year”.

Twitter has, at least where revenue is concerned, good reasons to be upbeat.

The company also projected its performance in the first quarter of 2015 and its outlook for the full year of 2015. It has predicted its revenue to be in the range of US$440-million to US$450-million. And for the full year, it projected its revenue is projected to be in the range of US$2.3-billion to US$2.35-billion.