Twitter shares fell 12% after-hours after the loss-making social network reported another quarter of slowing user growth as it struggles to keep up with Facebook and younger upstarts such as Instagram.
The early investor reaction to its latest results followed the revelation that monthly active user numbers grew by 11% year-on-year in the third quarter of its financial year – down from a rate of 15% over the previous three months to total 320 million.
Average monthly active users (MAUs) — a key measure of growth for Twitter — came in at 307 million for the quarter, a gain of only 3 million from the previous quarter.
The metric did not include users who sign up for the platform through text message. MAUs were up 8% year over year.
Twitter’s revenues surged ahead – growing by 58% on the same period a year earlier to $569.2m – but its forecast for future earnings in the current quarter came in below analysts’ expectations.
Chief executive Jack Dorsey – who returned to the role this month following the departure of Dick Costolo – has already acted to limit costs by cutting more than 330 jobs.
The number of employees affected – mostly engineers – totalled 8% of the workforce.
Dorsey said today: “We’ve simplified our roadmap and organisation around a few big bets across Twitter, Periscope, and Vine that we believe represent our largest opportunities for growth.”
He is under pressure to secure value for investors who have never seen a profit in Twitter’s near-decade-long history.
Twitter lost $132m during the company’s third quarter, with the total now at around $2bn.
The social network is struggling on several fronts. In New York, Wall Street investors and analysts are perpetually unimpressed.
And online, social media users are becoming increasingly uninterested as Twitter is dwarfed by Instagram, Snapchat, WhatsApp and others.