Twitter CEO Dick Costolo gestures during a conference at the Cannes Lions in Cannes June 20, 2012.ERIC GAILLARD/Reuters
Twitter Inc. posted fourth-quarter revenue that topped estimates, showing the company was able to draw more advertising even as user growth continues to slow.
Revenue increased 97 per cent to $479.1-million, beating the average projection of $453.6-million. Profit excluding some items was 12 cents a share, compared with an average analysts' estimate of 6 cents, according to data compiled by Bloomberg.
Twitter's monthly active users rose 20 percent to 288 million, compared with 23-per-cent growth in the prior period, the San Francisco-based company said Thursday in a statement. That was slower than the 22 percent growth to 295 million users estimated on average by analysts.
Twitter is working to demonstrate that it can profit off its users, passing $1-billion in annual revenue last year. Chief Executive Officer Dick Costolo, who has faced questions about slowing user growth and management turbulence, has retooled the executive team and pushed out a series of new features for the microblogging service in recent months. He has also been striking deals to put the 140-character messages and ads in more places.
"We are increasingly confident in the company's ability to grow users over time," Doug Anmuth, an analyst at JPMorgan, said in a note to investors this week. "We expect strong ad revenue growth to continue."
Twitter rose in extended trading, after closing at $41.26 in New York. The stock's drop last year compares with an 11- per-cent gain in the Standard & Poor's 500 Index.
The fourth-quarter net loss narrowed to $125.4-million from a loss of $511.5 million a year earlier.
New Features
Costolo last year ousted his chief operating officer and switched his heads of finance, product and engineering. In November, Twitter held an analyst meeting where the CEO made a list of promises about how the microblogging service would change by accelerating the release of new features to retain and recruit users, such as tools to shoot and edit video, or send messages between groups of people.
The changes are intended to keep people glued to Twitter's product for longer. In the fourth quarter, the company said its members viewed their timelines more often, with 182 billion views, compared with 181 billion in the prior quarter.
Mobile advertising was 88 per cent of total ad revenue in the fourth quarter, Twitter said. International revenue more than doubled.
For the first quarter, Twitter forecast revenue of $440-million to $450-million, compared with the average analyst estimate of $449.9 million.
Striking Deals
Twitter has addressed its slowing user growth in the past by saying that a wider audience of people see tweets on news websites and television sets than they do on the company's own site. Bloomberg News reported on Wednesday that Twitter has also struck a deal with Google Inc. to make tweets easier to find on the search engine.
The company is also extending advertising beyond its main site. This week, Twitter said it would push ads known as Promoted Tweets onto websites and apps from Flipboard Inc. and Yahoo Japan Corp. Twitter is also working to convince outside developers to use its mobile-advertising marketplace, MoPub, to run ads on their games and applications.