Results released on Monday for the third quarter of the year show Twitter’s revenues soared to $361m, up 114% from the same period last year, beating expectations. But the number of monthly active users of the service grew just 13 million to 284 million from the previous quarter. Analysts had predicted growth would between 14 million and 17 million.
The number of monthly active users represents a 23% increase year on year but was up just 4.8% from the last set of results and below the 6.3% quarter-on-quarter growth it reported in the second quarter.
The company has shaken up management and begun changing its platform in order to make it more accessible to new users. During the quarter it updated its service on Apple’s iPhone, introduced a new options for its Vine video service and launched a new service tailored to NFL fans. Last week it held its first developers conference in four years, a move to embed its real-time technology in a new generation of apps and services.
While revenues are growing strongly, Twitter remains unprofitable. It reported a net loss of $175m for the quarter, up from $64.6m last year. And the slowing growth rate has worried investors.
Twitter’s share price was $48.56 when stock markets closed on Monday, down 24% this year. The company also disappointed investors with its prediction for revenues for the current quarter. Twitter is projecting revenues between $440m and $450m, the midpoint of which is below the average analyst estimate on Thomson Reuters of $448m.
“We had another very strong financial quarter,” said Dick Costolo, CEO of Twitter. “I’m confident in our ability to build the largest daily audience in the world, over time, by strengthening the core, reducing barriers to consumption and building new apps and services.”
Twitter’s stated aim is to eventually reach every person on the planet. In a conference call with analysts Costolo said he was happy with the “strategy and the quality” of what the company was doing but that given the scale of the company’s ambitions it was “more critical than ever” for Twitter to pick up the pace.
The company remains strong in mobile – the fastest growth area for advertisers. Mobile advertising revenue accounted for 85% of total advertising revenue in the quarter.
Twitter accounted for 0.5% of global digital ad revenues in 2013, according to eMarketer. That figure is expected to increase to 0.8% this year. By comparison, Facebook, which reports its latest quarterly results tomorrow, is expected to increase its share of the worldwide digital ad market from 5.8% in 2013 to 8% this year.
This article was written by Dominic Rushe in New York, for theguardian.com on Monday 27th October 2014 21.29 Europe/Londonguardian.co.uk © Guardian News and Media Limited 2010