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Will Twitter Deliver on Its Growth Promise to Wall Street?

Twitter reports earnings on Tuesday.

Anthony Quintano for Re/code

Twitter added just four million new users last quarter, which isn’t a lot for a company that CEO Dick Costolo says is aiming to create the “largest daily audience in the world.”

But last quarter was an anomaly. At least that’s what Twitter told Wall Street. The company lost users to “seasonality” and an unexpected iOS 8 update that meant people’s phones no longer pinged servers in Twitter’s favor.

This explanation and better-than-expected financials were sufficient for investors — Twitter stock is up nearly 23 percent since it last reported earnings. But now Twitter will have to prove that its lackluster user jump was indeed a one-time thing when it reports first-quarter earnings on Tuesday afternoon.

Costolo said in January that user growth in the three months ending in March would return to what Twitter experienced for the first three quarters of last year when it averaged more than 14 million new users per quarter. That’s a lot better than four million, but a lot less than 50 million, which Facebook just added last quarter.

Analysts appear to be taking Costolo at his word. RBC Capital’s Mark Mahaney expects Twitter to report 301 million users, 13 million users more than last quarter and 18 percent year-over-year growth. Cantor Fitzgerald’s Youssef Squali is looking for 14 million new users.

On the financial side, analysts are looking for a profit of 4 cents per share on revenue of $456.5 million from Twitter for Q1. That’s revenue growth of more than 82 percent year over year.

Twitter has been very busy this year rolling out new products, including a number intended to help bring on new users.

The company has rolled out a new logged-out homepage to show off content to people without accounts, and this week it launched the Android version of Highlights, a tool that finds a small sampling of tweets to summarize what happened on the service for people who may not check their accounts frequently.

 Twitter growth since late 2012.
Twitter growth since late 2012.

This article originally appeared on

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