Twitter Inc (TWTR) hit $243M in Q4 revenues, but user growth has slowed down

Posted Feb 5, 2014

Twitter Inc (NYSE:TWTR) has reported their first quarterly financials since going public. Twitter hit sales of $243 million for the quarter, which is up 116% from the same time last year. This is well past Wall Street expectations of $218 million in revenues.

For the current quarter, Twitter is expecting to hit sales of between $230 and $240 million, which is double last year’s the revenues of the same time last year. But it is lower than the past quarter. This is the first time that Twitter saw quarter-over-quarter sales fall since the company started to report their revenues in 2011. Twitter’s revenues dropped over 17% in after-hours trading after a call with analysts.

Twitter saw a net loss of $511 million for the quarter and the company is not yet profitable. Most of the loss was due to employees cashing out their stock-based compensation. Twitter closed at $65.97 and is trading at $54.40 in after-hours trading as of the time of this article was being published. Twitter currently has a market capitalization of $36.63 billion. If you exclude the employee stock-based compensation and one-time expenses, Twitter earned $10 million.

Why is Twitter’s stock dropping? The company is seeing a slowdown in user growth. The company reported that 243 million use the service on a monthly basis as of last quarter. This is a 30% jump compared to last year, but is only a 3.9% jump from the previous quarter. Twitter’s growth rate was 7.4% in the previous four quarters and was 10.3% in 2012.

Twitter’s mobile users are up 37% year-over-year. Over three quarters of all users access Twitter through a mobile device.

Twitter generated most of their revenue from ads. The company saw $220 million in ad revenues this quarter, which is a jump of 121% from last year. Mobile accounted for 75% of the ad sales. The remaining $23 million was from data licensing and other sources.

[Source: CNN]