Summary:

In its first earnings report as a public company, Twitter reported revenue and profits higher than had been expected, but it’s user base continues to grow slower than company watchers had hoped.

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Twitter officially released its first earnings results as a publicly traded company after the closing bell at the New York Stock Exchange on Wednesday, and the numbers were pretty good. For the fourth quarter of 2013, Twitter CEO Dick Costolo said in the report that the company had its “strongest quarter to date,” ending with quarterly revenue of $243 million — up 116 percent year-over-year.

Revenue-wise, Twitter fared much better than the expected revenue of $217 million, and it posted non-GAAP earnings of $0.02 per share — a metric in which many analysts predicted a loss. The company is still not profitable, reporting a non-GAAP net loss of $34 million, but it is better than 2012’s reported loss of $49 million. But on the earnings call this evening, Costolo remained bullish about the growth of Twitter’s revenue, opening ad channels and enhancing products.

“We have only scratched the surface of what we believe Twitter can become,” Costolo said.

Twitter’s stock has been tumultuous since it tripled its IPO price immediately after hitting the trading floor on November 7. The stock climbed to nearly $75 before hovering around the $65-$66 mark — today, it closed at a slight dip of $65.97 but fell in after-hours trading.

"Twitter monthly active users worldwide as of Q4 2013"

However, there is still a hang-up on usership. Despite Dick Costolo’s moonshot prediction one year ago that Twitter’s growth would surpass 400 million users, Twitter’s user base is growing steadily (if a bit slowly). The earnings report said Twitter now has 241 million monthly active users, an increase of just 30 percent year-over-year but a small increase from the 232 million MAUs from the third quarter of 2013. However, Costolo remained unfazed about Twitter’s slow growth, citing increased onboarding processes onto mobile, integration of rich media, and accessibility to “casual” users.

“With confidence in our ability to scale revenue, we are doubling down in 2014 to accelerate the growth of our user base,” Costolo said.

"Twitter monthly active users worldwide (percent growth) as of Q4 2013"

There is a lot of pressure for Twitter to convert its potential — and its hype — into real returns, and Q4 offered a slight assurance that it has the power to become profitable. Costolo seems to believe that the key to profitability is accessibility.

“One of our core values as a company is to reach every person on the planet, and in 2014, we’re focusing on building a product that is truly accessible to everyone,” he said.

This post was updated several times Wednesday afternoon as more information became available.

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