Twitter’s User Growth Disappoints but Profits Remain Strong
Twitter recently revealed its financials for the fourth quarter which showed decent growth in revenue. However, the area of concern for the company is its user growth.
According to the newly shared figures, Twitter only managed to get 4 million users during the fourth quarter. Thus, ending the year with 288 million active users.
Compared to figures from the third quarter, that’s a 1.4% hike in user growth. That’s the lowest Twitter has ever recorded and as a result, the company fell behind Facebook’s user growth.
However, CEO Dick Costolo claims that the first quarter of 2015 will show decent growth. In a statement
during a conference call with investor of the company, Costolo explained how growth rates from January suggest that Q1 growth is going to be comparable to the first three quarters of last year.
After Twitter’s financial report went public, their shares went down immediately, but they managed to recover and post a gain of 8% during after hour trading.
Twitter also claimed that Apple’s roll-out of iOS 8 cost them 4 million users in Q4 as they shifted from iOS 7. Twitter said that 1 million of these users who switched to iOS 8 were erased because they either forgot their passwords, or never downloaded the app again.
Costolo also blamed an “unforeseen bug in the release of iOS 8” as one of the reasons they lost users. The other 3 million users were lost due to Apple changing a feature in the Safari browser called “Shared Links.” Apple is yet to comment on Twitter’s claim.
Still, Twitter in doing well financially and says their adjusted income is 12 cents per share, compared to the expected 6 cents.
Also, revenue doubled year-over-over and stands at $479 million. That also exceeds expected $453 million in revenue. Disappointing user growth is concerning for Costolo but since the company showed strong financial results, he doesn’t seem to be under a lot of pressure from investors.
Twitter has high hopes for 2015 as well and believes that profits will be between $2.3-2.35 billion at the end of the year. Meanwhile adjusted EBITDA is expected to be around $550-$575 million.
For the looks of it, Twitter seems to be way good at making money compared to gaining more users. How will the company manage to change that remains to be seen.
Do you think twitter’s blame on Apple is justified? How often do you use twitter on iOS 8?