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Twitter Asks for More Time to Fix Things -- And Freaks Out Wall Street

Twitter posted profits of seven cents per share on $502 million in revenue, up more than 60 percent over this same time last year.

Anthony Quintano for Re/code

Twitter added just two million new core users last quarter, and while it also beat Wall Street revenue estimates, investors still aren’t buying the Twitter story. The company’s stock swung wildly in after-hours trading, dropping as much as 6 percent.

Interim CEO Jack Dorsey addressed these concerns at the top of the company’s earnings conference call, calling the company’s user growth "unacceptable." The bigger theme was: Why aren’t more people — meaning regular people — using Twitter? We’re working on it. Give us time.

Dorsey said part the reason for lackluster user performance was flaws in the product itself, which is making it harder for new people to sign up. Basically, as Twitter has said in the past, it needs to do a better job of explaining to everyday people why Twitter should be for them and not just tech people and journalists.

Dorsey telegraphed the need for patience and that it will take time to fix, meaning you may not see a turnaround by the current quarter, or even the next. That’s essentially a gift to whomever will be the permanent CEO as he’s set expectations sufficently low.

The product issues might also partly explain the sudden departure of two top Twitter executives: Christian Oestlien, Twitter’s VP of product management in charge of growth, announced that he’s headed to YouTube. Todd Jackson, who ran Twitter’s content and discovery team, is going to Dropbox.

As to the the more important issue of Twitter’s CEO search, Dorsey said there was "nothing meaningful to share."

Twitter added eight million new users in total if you include what Twitter calls SMS Fast Followers, people who receive tweets as text messages instead of through an actual account. The company’s never highlighted the SMS Fast Followers total before, but said on its last earnings call that it would start to this quarter. If you include those people as part of the user base, which Twitter is obviously doing now, users jumped from 308 million last quarter to 316 million. If you exclude Fast Followers, Twitter’s user base is 304 million people.

The obvious explanation for the change is that it makes Twitter’s user base look significantly bigger. Twitter has struggled to meet Wall Street’s growth expectations since going public back in late 2013; Analysts set low expectations for the company this quarter, too. The addition of two million new core users is the smallest quarter-over-quarter jump it has ever reported.

Twitter posted profits of seven cents per share on $502 million in revenue for the quarter, up more than 60 percent over this same time last year. Analysts were looking for profits of four cents per share on roughly $481 million in revenue. Most of that revenue comes from advertising. Twitter reported $452 million in ad revenue on the quarter, a 63 percent jump from last year.

Twitter stock was up 5 percent Tuesday ahead of earnings.

We’re liveblogging the earnings conference call, but apparently you can also follow along on Periscope.

This article originally appeared on Recode.net.