Twitter has once again disappointed investors with an earnings report that will show user growth has faltered. Twitter has taken a new approach to reporting, providing all shareholders with an earnings letter detailing its operational performance and offering a commentary from the senior management team. However, the company’s fourth quarter results are disappointingly familiar, and the report once again highlights stagnant user growth as an area of concern.
“2015 was another very strong year for Twitter”, said the letter, although a net loss of $90.2m for the quarter and the same number of average monthly active users as in the previous quarter have done little to drum up positivity among investors. Shares were down by as much as 13 percent in extended trading before they recovered to a three percent loss.
Shares were down by as much as 13 percent in extended trading
Twitter went public in 2013 with a valuation of $25bn, but troubles in the years since mean its value has fallen to under $10bn.
This quarter is the first in the company’s almost 10-year history that monthly users haven’t grown. Despite the disappointment, Twitter was quick to highlight a few reasons to feel positive about the future. “We saw a decline in monthly active usage in Q4, but we’ve already seen January monthly actives bounce back to Q3 levels”, said the letter. “We’re confident that, with disciplined execution, this growth trend will continue over time.”
Revenue for the quarter was up 48 percent on the previous year, although shareholders are concerned Twitter’s management is unable to sort out the firm’s deeper problems (such as its ongoing identity crisis). The company wrote in the letter that 2016 will be “a year of many changes for Twitter”, with a “new product roadmap which includes significant changes, the changing mix of our business, and the investments we plan to make in significant growth opportunities”. However, the company is yet to convince investors that these new prospects are quite so exciting.