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Twitter Is Making Money. It Needs to Add More Users.

CEO Dick Costolo talks revenue and flagging user growth.

Asa Mathat

Twitter’s first earnings numbers are in, and the Street didn’t like what it saw.

Despite beating analysts’ revenue and earnings expectations, Twitter’s user growth numbers are slouching. Shares fell off a cliff in after-hours, trading down 12 percent at about $58.70.

The company is doing well selling ads. Ad revenue per user is up. And more than 75 percent of the company’s revenue comes from mobile devices. These are all good things.

Bad news is, Twitter is having a heck of a time adding new users to its platform. It only added 9 million new users last quarter, and has significant retention problems.

Which is important. If Twitter effectively stays a “niche” service that’s hard for the mainstream to understand, then it’s hard to believe the pitch that it’s the perfect “second-screen” TV experience.

Take a look at my live-blogged notes from the company’s first earnings call earlier Wednesday afternoon, below.

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