Twitter earnings beat expectations as revenue grows

Twitter reported a net loss of $125m (£82m) in the fourth-quarter, beating analyst expectations.

It also said revenue grew faster than expected, increasing by 95% to $479m during the October to December period.

Total monthly active users were 288 million, an increase of 20% from the year earlier.

However, growth from last quarter was significantly slower: the site managed to add only four million users in the past three months.

Twitter tried to explain away the slowing growth, saying it lost approximately four million users during the period as a result of integrating various third-party applications.

Twitter chief executive Dick Costolo sought to allay fears about user growth, saying in a statement accompanying earnings: “The trend thus far in [the first quarter] leads us to believe that the absolute number of net users added in [the first quarter] will be similar to what we saw during the first three quarters of 2014.”

In a memo to staff leaked earlier on Thursday, Mr Costolo warned that bullying behaviour on Twitter was turning away users.

Worryingly for investors, user growth in the US has all but slowed – the company said it had 63 million monthly active users in the lucrative US advertising market, the same as in the previous quarter.

However, so far the slowing user figures have not deterred advertisers.

Twitter said its advertising revenue increase to $432m in the fourth-quarter, an increase of 97% from the year before.

On a conference call to discuss earnings, Mr Costolo also confirmed that Twitter and Google had struck a deal, but remained coy on the details.

“I do want to confirm that we have a relationship that we have agreed to with Google,” he said, but declined to provide specifics.

Bloomberg and the New York Times had earlier reported that Twitter had struck a deal with the search giant to possibly make Twitter’s messages more visible in search results.

Shares in Twitter rose more than 9% in after-hours trading. BBC

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