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Twitter reported its fourth-quarter 2015 earnings on Feb. 10, but the news wasn’t anything to message home about.
The good news: The social network’s revenue continues to grow, generating $710 million in Q4 — an increase of 48 percent over $479 million a year ago — and it was in line with analysts’ projections. Bad news: Operating expenses continue to be a problem; Twitter lost 13 cents a share as a result.
The company’s net loss improved to $90.2 million from a loss of $125 million, or 20 cents a share, in the same quarter last year. Twitter, whose 10th birthday will be March 21, has never made a profit during its time in business.
There was also other bad news. Twitter is a company that relies heavily on growth in its user base; its total in Q2 was flat from last quarter at 320 million registered users and up 9 percent from 288 million last year. Analysts had expected Twitter to report 325 million users.
In the social networking world, steady growth in users is extremely important, because people come and go on a daily basis. While others such as LinkedIn, SnapChat and Facebook continue to grow, Twitter has stalled. It needs to add users at a faster clip or it risks moving into troubled waters.
Last year Twitter started documenting what it calls SMS Fast Followers, or people who use the service only by messaging, and added them to its list of monthly active users (MAUs). Twitter’s earnings report showed that excluding those users, Twitter dropped from 307 million MAUs to 305 million.
It was the first time the company reported a user decline on a quarterly basis.
Twitter claims that its usage numbers are now on the rise; monthly visitors at the end of January returned to the same levels as in late September, CEO and co-founder Jack Dorsey said on a conference call to analysts and investors.
The problem, Dorsey admitted, is that in some ways Twitter still is not intuitive to use, and it has quirks that new users find difficult to grasp.
“We think there’s a lot of opportunity to fix the broken windows and confusing aspects of our product,” Dorsey said. “The real-time nature of what we do is what we are most focused on building. Twitter is live: live commentary, live conversations, live connections.”
Dorsey, who also serves as CEO of Square and has presided over numerous layoffs in the last nine months, told listeners on the call that the company has a plan that will stabilize the financials. He’d better have a plan; two years ago, Twitter stock was selling for about $60; on Feb. 10, it had dipped all the way down to $15. It has lost 67 percent of its value in the last 12 months.