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Twitter missed Wall Street’s earnings estimates, and its ad business is slumping

The company’s Q4 revenue grew by just 1 percent over the same quarter last year.

Drew Angerer / Getty

Twitter didn’t finish 2016 as well as investors hoped it would.

The company missed Wall Street’s revenue estimates Thursday, reporting $717 million in revenue for the fourth quarter, just a 1 percent gain from the same quarter a year ago. It reported profits of 16 cents per share, which was higher than analysts expected.

Twitter also added two million new users in the quarter and now claims 319 million monthly active users.

Wall Street analysts were looking for profits of 12 cents per share on revenue of $740 million. They also expected Twitter to report user growth of roughly two million to three million new users last quarter. The shares plummeted 9 percent in pre-market trading.

Twitter’s advertising revenue, which makes up the vast majority of its business, was actually down in Q4 from the year prior. The fourth quarter is usually the biggest of the year for advertisers who spend aggressively around the holidays. Twitter did not issue guidance on its fourth quarter revenue three months ago because it was restructuring its sales team. It also lost its longtime head of sales and COO, Adam Bain, in November.

The company is set to host a call with analysts and investors at 8 am ET.


This article originally appeared on Recode.net.

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