Twitter Revenue Beats Forecasts, but User Numbers Fall Short

Twitter just can’t seem to catch a break.

Critics have panned the company’s slowing user growth. It has churned through the hiring and firing of top managers. Recently, investors have started to wonder if Dick Costolo, Twitter’s chief executive, is the right man for the job.

And 2015 is not looking so good either.

On Thursday, the company reported that it had 288 million regular users on its platform, an addition of only four million people from the previous quarter and roughly one-fifth the number who visit Facebook on a monthly basis. It is a significant miss from analysts’ expectations of about 291 million regular users.

There was some good news for the eight-year-old micromessaging service, which since its initial public offering in 2013 has been playing defense against shareholders who expect blockbuster quarterly results akin to Facebook, a far larger social media service. It said it had revenue of $479 million in the fourth quarter, up 97 percent compared with $243 million a year ago and besting analyst expectations of $453 million.

The company reported a loss of $125 million, or 20 cents a share, up from a loss of $500 million, or $1.41 a share, in the fourth quarter a year ago. But using a measure of income that excludes stock-based compensation and other expenses, the company reported a profit of $79 million, or 12 cents a share, in the quarter, compared with a profit of $10 million a year ago.

Twitter shares were up 4.5 percent in early after-hours trading after the results were announced.

Analysts lowered their estimates for Twitter’s year-end quarter after Anthony Noto, Twitter’s recently appointed chief financial officer, cautioned that continued changes to Twitter’s core product may cause the company’s metrics to fluctuate.

The real proof of change, some say, will be in the coming months.

“Twitter is very much in its ‘prove it’ time period, and the results this quarter won’t prove it,” said Robert Peck, an analyst at the brokerage firm SunTrust Robinson Humphrey. “What we want to see: As we look into the first quarter, is Twitter going to see real traction from it for the rest of the year?”

For months, Twitter has been trying to prove that traction will come in a series of small yet significant changes over time, and that its best years are still ahead.

It has promoted Kevin Weil, a well-regarded manager in Twitter’s revenue division, to oversee all of the company’s consumer and revenue products. The company has released a new feature that allows users to take video inside the Twitter app, one that will most likely be a long-term source of lucrative advertising revenue.

And on Thursday, Twitter announced a new partnership with Google that will make the hundreds of millions of tweets that flow through the service every day much easier to find using the world’s most popular search engine.

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