Twitter shares tank after company reports slowing user growth

Despite a surge in revenue, Twitter saw its stock fall 10% after it reported a slowdown in user growth in the first quarter.

The San Francisco company reported revenue of $250 million, up 119% year over year, for the three months ended March 31. It had a net loss of $132 million, or 23 cents, compared with a net loss of $27 million in the same quarter a year earlier.

The microblogging platform said its net loss included $126 million of stock-based compensation expense.

Excluding one-time events, Twitter’s earnings per share were flat.

Analysts were expecting Twitter to report a loss of 3 cents a share, on revenue of $241.46 million, according to a survey by Factset.

Twitter reported its earnings after the markets closed. During regular trading, shares rose $1.89, or 4.64%, to $42.62.

In after-hours trading, shares were down $4.14, or 9.71%, to $38.48 at 1:40 p.m. PDT.

Twitter again struggled with user growth, a problem area during its last earnings report.

Twitter had 255 million monthly active users as of March 31, an increase of 25% year over year; analysts had expected 257 million. That also represented a slowdown in growth: Twitter had reported a 30% year-over-year increase in monthly active users during its last earnings report three months ago.

Mobile monthly active users reached 198 million in the first quarter, which represented 78% of the total.

Timeline views reached 157 billion for the first quarter, an increase of 15% year over year.

“We had a very strong first quarter. Revenue growth accelerated on a year-over-year basis fueled by increased engagement and user growth,” Chief Executive Dick Costolo said. “We also continue to rapidly increase our reach and scale.”

Advertising revenue totaled $226 million, up 125%. Mobile advertising revenue was about 80% of total advertising revenue.

Advertising revenue per thousand timeline views reached $1.44 in the first quarter of 2014, an increase of 96% year over year.

International revenue totaled $70 million, an increase of 183%, and accounted for 28% of total revenue.