Twitter came under fresh pressure Thursday as the social network reported sluggish revenue and user growth, and widening losses in the past quarter.
Pre-market trades showed Twitter shares slumping 10.8 percent as hopes faded for a rekindling of growth at the messaging platform, which has lagged its rivals in the fast-moving social media segment.
Twitter reported a net loss in the fourth quarter of 167 million, after a 90 million deficit in the same period a year ago. Revenue in the quarter rose a modest one percent to 717 million.
In the critical area of user growth, Twitter said it ended 2016 with 319 million monthly active users, a gain of four percent from a year ago in the closely watched metric and only two million more than the prior quarter.
Twitter, which has never reported a profit, has been revamping its offerings as it seeks to expand beyond its core base of politicians, celebrities and journalists. Some analysts had expected a bump in Twitter use following the election of US President Donald Trump, who is an avid user of the platform and frequently offers his views on policy.
Twitter chief executive Jack Dorsey said however that “2016 was a transformative year as we reset and focused on why people use Twitter: it’s the fastest way to see what’s happening and what everyone’s talking about.”
Dorsey added that Twitter “overcame the toughest challenge for any consumer service at scale by reversing declining audience trends and re-accelerating usage.” He said that “daily active usage accelerated for the third consecutive quarter, and we see this strong growth continuing.”
Twitter said it continues to work toward achieving profitability in 2017.
Chief operating officer Anthony Noto commented, “We’re hearing positive feedback from our ad partners about our continued acceleration in audience growth and engagement.”
But he noted that “revenue growth will continue to lag audience growth due to the sales cycle, and could be further impacted by the escalating competition for digital advertising spending and our efforts to re-evaluate our revenue product feature portfolio.”
Earlier this week, analyst Richard Greenfield of the research firm BTIG said he saw positive signs of growing user engagement on Twitter.
“It is undeniable that Twitter has been thrust into the global zeitgeist following the US presidential election in November 2016,” Greenfield said in a research note.
“Not only is President Trump actively using Twitter to communicate directly with the American people, his tweets are impacting consumers all around the world. “
Greenfield said he does not expect immediate financial rewards for Twitter, but that over the next year it could see improvement.