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Twitter's $250 Million in Q1 Revenue Doesn't Stop User Growth Concerns

Stock slides 10 percent even in face of mostly positive results

Photo: Getty Images

Twitter's first quarter revenues hit $250 million, beating analysts' expectations by more than $8.5 million. Advertising accounted for 90 percent of the revenue ($226 million), a line item jump of 125 percent year-over-year for the quarter. And 80 percent of its that number came from mobile advertising.

Despite all those positives, its sluggish user growth  may end up attracting the most attention, as it is a lingering concern among Wall Street investors and tech observers.

In its second earnings statement as a public company, Twitter reported 255 million monthly active users, up from 241 million from the last quarter but falling short of analysts' projections of 257 million. The San Francisco-based digital platform's user base grew by 25 percent in Q1 compared to the same period in 2013. That's down from a 30 percent year-over-year increase in Q4 '13 and a 39 percent YOY increase in Q3 over their respective prior-year quarters.

Twitter's stock fell nearly 10 percent after the figures went public. Unfortunately for Twitter, investors probably immediately drew comparisons to Facebook's better earnings showing just a week ago. 

The company, which is led by CEO Dick Costolo, reported that timeline views lifted 15 percent YOY in Q1. But timeline views for 2013 Q4 showed considerably better, jumping 26 percent at the time, Twitter stated.

Back to more positive news for Twitter: its data licensing programs brought in $24 million, an increase of 75 percent YOY. It also drew 198 million monthly active mobile users, up 31 percent YOY.

"We had a very strong first quarter," Costolo said in a statement. "Revenue growth accelerated on a year-over-year basis fueled by increased engagement and user growth."

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