Twitter’s sales forecast falls short with tepid user growth

SAN FRANCISCO Twitter Inc. gave a lacklustre first-quarter sales forecast and reported tepid user growth, suggesting that changes to improve the social-media platform haven’t yet attracted a much wider audience.

Revenue will be US$715 million to US$775 million in the period, the San Francisco-based company said Thursday in a statement. Analysts, on average, projected US$766.1 million, according to data compiled by Bloomberg. Twitter also reported a decline in monthly active users, though it began reporting daily active users and showed growth in that metric. The shares slid 9.84 per cent to US$30.80 in New York.

Twitter has been upping efforts to reduce abuse and root out fake accounts and election malfeasance, which have crimped user growth in a competitive digital-ad market. Its share of the lucrative market is expected to dip this year as rivals like Facebook Inc. and Alphabet Inc.’s Google boost their dominance, according to EMarketer.

“There is a lot we can do within the product that can create a much better experience for users on the service,” chief executive Jack Dorsey said on a call with analysts.

Daily users rose nine per cent in the fourth quarter to 126 million, a measurement that investors have been asking for as a better gauge of the service’s popularity. The growth rate was also nine per cent in the third quarter and had jumped 12 per cent in the fourth quarter of 2017, the company said.

Monthly active users averaged 321 million, dipping by nine million from the same period a year earlier and down five million from the third quarter. The numbers seem to indicate that its overall audience isn’t growing, though existing users are returning more often.