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The Boston Globe

Business

Revenue up at Twitter, but growth is a worry

SAN FRANCISCO — Twitter is struggling to convince Wall Street that it is still a company with plenty of potential to grow.

In its second earnings announcement as a public company, Twitter said Tuesday that it had more than doubled revenues, beating its own forecasts and the expectations of investment analysts. But the social network’s stock fell more than 11 percent in after-hours trading because the number of people who joined it did not increase as fast as many had hoped.

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Wall Street, it appears, is more worried about Twitter’s ability to add users and keep them engaged than about its ability to increase revenues.

In the last two quarters, that has been a problem. Twitter said it had 255 million monthly users globally in March, up 5 percent from 241 million at the end of December, which ended a quarter in which monthly active users rose by less than 4 percent.

But most disconcerting for shareholders is that Twitter made $1.44 in advertising revenue for every 1,000 timeline views, down from $1.49 in its previous quarter. That may be the best marker of Twitter’s ability to make money from its platform, and in the first quarter it was trending down.

Twitter’s revenue in the first quarter, which ended March 31, was up 119 percent to $250 million from $114 million in the first quarter of 2013.

Twitter lost $132 million, compared with a loss of $27 million a year ago. However, adjusted earnings were $183,000, or about break-even per share, compared with a $10.5 million loss a year ago.

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