Twitter’s just published its financial results for the fourth quarter and fiscal year that ended December 31, 2013. The results showed that while its revenues continue to increase, growth in users is now on the decline.
The report stated that revenues for the fourth quarter were up by 116 percent, totalling $243 million, with most of that money coming from advertising. It also said that almost one third of its advertising revenue came by way of mobile advertising.
The last quarter caps a very profitable year for Twitter, which saw total revenues rise by 110 percent year-over-year to $665 million.
“Twitter finished a great year with our strongest financial quarter to date,” said Dick Costolo, CEO of Twitter.
“We are the only platform that is public, real-time, conversational and widely distributed and I’m excited by the number of initiatives we have underway to further build upon the Twitter experience.”
Despite the increase in revenues, Twitter saw slower user growth in its first quarter as a public company. Twitter’s average Monthly Active Users (MAUs) increased by 30 percent year-over-year to 241 million, while its Mobile MAUs reached 184 million – an increase of 37 percent year-over-year that represents 76 percent of its total MAUs. Even so, this growth is notably slower than in recent months.
Timeline views reached 148 billion in the fourth quarter of 2013, an increase of 26 percent year-over-year. According to Costolo, the decline in Timeline views is associated with a new feature that connects conversations in a seamless manner – thus users need not to refresh the page as often. Timeline views are counted every time the page is refreshed on desktop or mobile. Despite the decline in Timeline view, Costolo reported that more users were interacting with tweets by retweeting or favoriting them, which is still considered as strong user engagement.
Costolo stated that some changes will be coming to Twitter soon that will allow more people to enjoy using the service. He said that the plan is to make Twitter more ‘user-friendly’, especially for those people who are new to the website. This, he hopes, will entice more people to sign up for the service.
Some are now questioning whether or not the company has been overvalued, as the company’s shares are worth more than double the IPO price at $74.73 a share. But others believe that Twitter will be able to pull through.
“This is kind of an example of a very new company that isn’t really well understood by the street so people don’t get a sense of how the revenue builds up, like the numbers were better than expected but in a way that was dramatically different than people thought it was going to be,” said Mark Mahaney, an analyst at RBC Capital Markets.