Twitter Shares Up on Revenue Growth

Twitter shares jumped 10% in after-hours sales in response to revenue growth of 97%.

The social media service reported revenue of $479m and a net loss of $125m, both exceeding analyst expectations.

Investors were encouraged by Twitter's ability to grow revenue from its existing users rather than being discouraged by a slowdown in user growth.

Twitter reported that the number of monthly active users grew by four million in the last quarter of 2014 (1.4%) but said the 288 million monthly active users represented 20% growth since December 2013.

This figure is below market expectations of 295 million and analysts said growing the user base remains a key challenge for Twitter.

Analysts said however that even though there is growth, it represented a marked slowdown and means Twitter's membership is still a fifth of Facebook's.

Twitter chief executive Dick Costolo said the business was advancing at "great pace" and explained the slow growth by saying: "The trend thus far in Q1 leads us to believe that the absolute number of net users added in Q1 will be similar to what we saw during the first three quarters of 2014."

Similar to Facebook investors, Twitter investors see mobile advertising revenue as a key indicator of future growth, and the service has made a successful transition to mobile devices.

In an effort to attract and retain advertisers, Twitter launched "tailored audiences" for mobile apps, a new way for advertisers to target audience sectors based on mobile app actions such as installations, purchases or sign ups.

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