Twitter’s ad revenues are up, but user growth still disappoints

Although it had a slightly better story to tell than the last time, Twitter’s latest earnings report was still underwhelming for Wall Street.

The big complaint from last quarter was that Twitter’s user growth had slowed considerably and the company wasn’t doing enough to add new users. This quarter, the user growth increased, but still remained underwhelming. By reporting 255 million monthly active users at the end of March, Twitter managed to grow its user base by 5.8%, and a 25% increase over the same quarter last year. However, it’s still decelerating user growth, meaning that even though it’s adding users, the rate at which they’re joining is slowing down.

That’s a crucial figure for the bottom line, because if user growth is slowing down, Twitter won’t be able to provide much for advertisers, especially when you compare it to the exponential growth of platforms such as Pinterest and Whatsapp. Plus, it doesn’t help that its biggest social media advertising rival Facebook continues to dominate, recently reaching one billion mobile users. 

However, that doesn’t mean Twitter isn’t doing enough to attract the ad dollars. With new targeting capabilities and and lead generating tools for marketers, Twitter registered a more-than-decent increase in revenue, posting $250 million, a 119 percent year-on-year increase in revenue that beat analysts’ expected figure of $241 million.

The headache for Twitter continues to be its inability to attract hordes of new users and keep them active on the platform. It’s tried to jazz things up by redesigning its user interface to be more visual and intuitive (read: more like Facebook.) But given that its use just isn’t as obvious as Tumblr, Pinterest or Instagram, Twitter’s going to continue to have tough earnings calls about its growth.

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