Twitter, the 140-character social media service, has posted disappointing results as user growth and engagement fell short of expectation - and the company's losses increased.
While revenue increased from $114.3m to $250.5m, year-on-year, in its first quarter results, there were signs that growth is slowing. The number of "monthly active users" of the service increased by 25 per cent to 255 million in the quarter to the end of March, according to the company, down from 30 per cent growth in the prior quarter.
There has also been evidence throughout the quarter that many new accounts don't continue to engage long term. For example, the number of monthly active users is less than one-third of the total number of active registered users - 645.75m, according to figures published in January.
Furthermore, the company's losses widened to $132m from $27m in the same quarter in 2013, although that also includes a colossal accounting figure to cover stock-based compensation for executives. With such costs stripped out, the company posted a net income of just $183,000.
The company's shares dropped by 11 per cent as a result.
However, CEO Dick Costolo brushed aside fears that Twitter had already peaked. "We had a very strong first quarter. Revenue growth accelerated on a year-over-year basis fuelled by increased engagement and user growth," said Costolo.
"We also continue to rapidly increase our reach and scale. With the integration of MoPub, we now reach more than one billion [Apple] iOS and [Google] Android users each month, making us one of the largest in-app mobile ad exchanges in the world and the only one at scale to offer native in-app advertising."