Twitter is Nearing Profitability, But Still has a Serious Growth Problem

By Shea Bennett Comment

Twitter is Nearing Profitability, But Still has a Serious Growth Problem

Twitter unveiled its 2014 fourth quarter earnings report yesterday and while the company’s financials beat estimates across the board, Twitter added just four million monthly active users (MAUs) between October and December of last year, representing quarterly growth of just 1.4 percent.

To put things into perspective, Facebook, which is already about four times the size of Twitter, grew by 3.1 percent in Q4 2014, adding another 43 million users.

Which means that Facebook added almost as many users in three months as Twitter has added in a year, despite the latter being a fraction of the size.

Twitter has a serious, serious growth problem. And everybody knows it.

Here’s Twitter’s MAU chart, dating back to Q1 2010.

Twitter is Nearing Profitability, But Still has a Serious Growth Problem

On the flip side, Twitter is totally killing it in revenue, raking in $479 million in Q4, an increase of 97 percent year-on-year.

They’re also moving closer to overall profitability, too, losing just $125.4 million in the quarter, down from a loss of $511.5 million a year ago.

All of which pleased investors – after first falling, the stock rallied significantly in after-hours trade.

But the slow growth in overall usage is still a major problem, and one that will keep the stock pegged down for the foreseeable future. The company has released a number of new features in recent weeks that they hope will attract and, critically, retain new users, and the market will be looking for signs of this with the Q1 2015 earnings release.

(Twitter image: Pete Simon via Flickr.)

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