Twitter Inc reported its slowest revenue growth since the entry into the public market in 2013, while continuing to deal with serious competition from social networks such as Snap Messenger and Instagram, which is owned by Facebook Inc (NASDAQ: FB).
The company's shares fell 10% to $ 16.81 before the official opening of the trading session on Thursday.
Twitter announced that its user base has increased by 4% to 319 million monthly active users.
Analysts on average had expected that this figure would amount to 319.6 million, according to market research firm FactSet StreetAccount.
Revenue rose just 1% to $ 717.2 million, short of the forecast of analysts polled by Reuters – at $ 740.1 million. Adjusted profit, however, greatly exceeded underestimation.
Growth in the number of Twitter users was supported by the hype of social networks regarding the US presidential election, as well as the increase in the number of President Donald Trump subscribers, who has used the micro-blogging service in the electoral campaign.
Twitter net loss widened to $ 167.1 million, or 23 cents per share, in the fourth quarter ended 31 December, from $ 90.24 million, or 13 cents per share, a year earlier.
Restructuring costs for the period rose to $ 101.2 million from $ 12.9 million a year earlier.
In October, Twitter announced plans to cut 9% of partners around the world as part of a major restructuring of the company.
Excluding one-time balance sheet items, the company earned 16 cents per share in the fourth quarter, topping analysts' forecast of 12 cents per share.
Two days earlier, the sentiment on Twitter was bullish. The shares on Tuesday rose nearly 2% after the publication of comments about the good prospects of the company thanks to the President Donald Trump, who used it during and after the campaign.
On Wednesday, the BTIG changed its recommendation on the Twitter shares to from “neutral” to "buy", specifying a target share price of $ 25.