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"Twitter turned a surprise profit and handily beat Wall Street estimates for revenue, but missed estimates for user growth on its first quarterly earnings report since going public in November.\nTwitter reported earnings of $0.02 a share on revenue of $242.7 million, coming in ahead of estimates for revenue of $217.82 million and a net loss of $0.02 a share. For the 2013 year overall, Twitter generated revenue of about $665 million, more than double what it generated in the previous year.\nSee also: Will Twitter Be the Last Big Social Media IPO?\nHowever, Twitter reported having 241 million monthly active users at the end of the December quarter, an increase of just nine million from the previous quarter. During the earnings call that followed, the company revealed that it had only added one million monthly active users in the U.S. during the quarter, despite all the additional press coverage it received in the leadup to its public offering.\nDick Costolo, the company's CEO, was hammered with questions on the earnings call about the slowing user growth. He emphasized efforts to improve the user onboarding process and incorporate more rich media on Twitter in order to \"change the slope of the growth curve.\"\nCostolo also reasserted on the call that it continues to be \"one of our core values as a company to reach every person on the planet.\"\n\nTwitter Reach: Q4\u201913 avg Monthly Active Users 241 million, up 30% y/y. #TWTRearnings pic.twitter.com/74Eva0gRqc\n\u2014 TwitterIR (@TwitterIR) February 5, 2014\n\nThe user growth numbers weren't the only troubling detail in the earnings report. Timeline views, Twitter's rough metric for engagement, increased year-over-year, but declined from the previous quarter. \nCostolo noted that some of this dip in engagement was due to product changes in recent months, including \"threaded conversations,\" which limit the need to scroll through the timeline to search for tweets. \"We are essentially increasing the value of each timeline view,\" he said.\n\nTwitter Engagement: Q4\u201913 Timeline Views 148 billion, up 26% y/y. #TWTRearnings pic.twitter.com/JMwcymsmZx\n\u2014 TwitterIR (@TwitterIR) February 5, 2014\n\nTwitter's stock initially surged by as much as 8% in after-hours trading following the earnings report, but quickly turned negative on the user numbers, declining by 13% just before the earnings call started. \nCostolo's answers on the call appeared to do little to defuse investor concern about Twitter's slowing user growth. By the end of the call, the stock was down 18%, hovering around $55 a share.\nThis double-digit percentage decline is an abrupt turnaround for the company. Twitter's stock skyrocketed in the months after its IPO, hitting a high of more than $74 a share in December, or nearly triple its IPO price, driven by new ad targeting tools and optimism for the social media space in general. \nTwitter is certainly not the first company to experience a sharp, negative investor reaction after its first earnings report. The day after Facebook released its first earnings report as a public company, the stock hit a new low, driven by concerns about whether it could make the shift to mobile. \nIt took multiple quarters for Facebook to shake that \"mobile problem\" narrative. How long will it take Twitter to shake the \"user problem\" narrative?\n      window._msla=window.loadScriptAsync||function(src,id){if(document.getElementById(id))return;var js=document.createElement('script');js.id=id;js.src=src;document.getElementsByTagName('script')[0].parentNode.insertBefore(js,fjs);};\n_msla(\"//platform.twitter.com/widgets.js\",\"twitter_jssdk\");"^^<http://www.w3.org/2001/XMLSchema#string>
<http://mashable.com/2014/02/05/twitter-q4-earnings/>