Twitter said the majority of active users added in the second quarter came from SMS fast followers – people who receive updates from the social media site but do not have an account.
For comparison, Facebook has almost three times as many active users as Twitter, and still grew by 17 percent in Q1.
The company reported an adjusted Q2 earnings of 7 cents per share for a total amount of $502.4 million, 61% higher than its last year’s revenue of $312.2 million.
The poor monthly data on users overshadowed the company’s second-quarter earnings and revenue, which exceeded expectations, and its bullish projections for future revenue. Also, the company’s worldwide revenue, which it generated from the global markets, grew 78 percent to $181 million.
Following announcement of the figures, Twitter’s stock soared 12% in after-hours trading. The management mentioned that the MAUs growth does not look good for the second quarter; however, it did not provide any estimates.
Dorsey took the helm temporarily at the start of this month after previous boss Dick Costolo stepped down.
While many people are familiar with Twitter, the company has not been able to convince people that they need it. Twitter also “remains too hard to use”, Mr Noto said in a conference call broadcast on Twitter’s live-streaming service Periscope. On average, analysts had projected that the company would post revenue of US$481 million and profit of US$0.04 per share, after eliminating the compensation expenses.
However, interim CEO and co-founder Jack Dorsey said he is not happy with the growth level, and that the company is still underperforming. “We expect that will take a considerable period of time”.
Shares in the social network have swooped 13 per cent lower, wiping several billion from the company’s market value, after reporting muted growth in user numbers.
Edison Investment Research analyst Richard Windsor disagreed.
After several warnings by the company, Wall Street analysts had been cautious in their expectations for the quarter.
While twitter’s monetization results and overall earnings have continued to defy investors and posted stronger growth, it has been the user-base which has failed to replicate that growth. At the end of 2014, there were only 42 hedge funds with $1.01 billion invested in the stock.
