While beating earnings and revenue expectations in its first quarterly results as a public company, Twitter has left investors disappointed. The stock dipped 11 percent after it reported its slowest pace of user growth.
Twitter Inc. posted a better-than-expected fourth quarter revenue on Wednesday in its first results since its flotation on the New York stock exchange three months ago.
Revenue doubled to $243 million from $112 million a year earlier. According to Factset, analysts had expected revenue of $218.1 million.
Its net loss of $511 million, or $1.41 per share, in the October-December period was also lower than the 2 cents per share predicted.
Nevertheless investors were looking for more, and focused instead on news of Twitter's anaemic user growth and decline in timeline views.
The company's stock dipped as much as 11 percent from a close of $65.97 to $58.50 in after-hours trading Wednesday after it reported its lowest number of new monthly users since it first began disclosing figures.
The San Francisco-based company averaged 241 million monthly users in the December quarter, up just 3.8 percent from the previous three months. That compares to a user growth of 10 percent, 7 percent, and 6 percent during the first three quarters of the year.
Timeline views also fell from 159 billion to 148 billion in the quarter, indicating users are refreshing their accounts less often.
Twitter made its Wall Street debut in November with an initial public offering price of $26 a share. The stock price has more than doubled since, in part on the belief it could eventually rival Facebook, which has five times as many users.
Wednesday's results are likely to divide investor opinion on whether that remains realistic.
"What this report will do is it will question how mainstream is Twitter as a platform," said Arvind Bhatia, an analyst at Sterne, Agee & Leach.
"Both in the US and internationally, the monthly active user base did not grow as fast as people thought, and that has an impact on the number of timeline views," Bhatia added.
ccp/jm (AP, Reuters)