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Twitter’s Number of Active Users Declined Last Quarter

Twitter’s user growth problem is getting worse: The company reported negative growth of monthly active users for Q4 of 2015 Wednesday as part of its earnings results. During the quarter, only 305 million users were active on Twitter per month on average, compared to 307 million in Q3 of 2015.

This excludes so-called SMS fast followers, who receive notifications from the company via text messaging without signing up for a full account, and aren’t being monetized through any of the company’s apps. Including SMS fast followers, Twitter ended the year with 320 million monthly active users, up from 292 million a year ago, but flat when compared to Q3. Twitter claims to reach a total audience of 800 million users per month, including non-registered users who read tweets embedded on third-party websites.

The company broke the bad news as part of its Q4 2015 earnings release, which otherwise came with few surprises. Twitter generated $710 million in revenue during Q4 of 2015, compared to $479 million during the same quarter a year before. On a non-adjusted basis, the company generated net earnings of $114.6 million, or $0.16 per share, compared to $79 million and $0.12 per share a year ago.

These numbers were within or even slightly above analyst expectations; analysts had expected revenue of $709-$710 million, and earnings per share of $0.12. But once again, all eyes are on user metrics, as the company is struggling to keep up in an evolving market place that continues to bring strong growth to competitors like Facebook, Instagram and Snapchat.

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Twitter has made some bold product moves in recent months to make its service more inviting to new users. In October it launched Moments, a media-heavy curated Twitter experience around trending topics and events. And earlier on Wednesday, it started to add a selection of what it deems the best tweets to the top of a user’s timeline.

The launch of Moments was accompanied by the company’s first-ever big marketing campaign, which makes it ever more puzzling that Twitter wasn’t able to grow users during the quarter. Twitter CEO Jack Dorsey tried to assure investors during the company’s earnings call that usage numbers have “bounced back” to Q3 levels in January, and CFO Anthony Noto attribute some of the Q4 declines to the fact that Twitter decided to send fewer emails to its users.

The company laid out a few key initiatives for 2016 in its first-ever letter to investors Wednesday. Interestingly, it made live video streaming part of its core focus, writing: “We believe live streaming video is a strong complement to the live nature of Twitter, and it helps instantly explain the value of our service. We’re going to invest heavily in these first-screen, connected audience experiences. Being able to instantly broadcast and watch a live stream with others is extremely powerful and entertaining.”

Twitter launched its social live streaming service Periscope earlier in 2015. The company didn’t reveal any new metrics about Periscope in its letter to investors, but said that Periscope founder and CEO Kayvon Beykpour is now part of Twitter’s executive team. “Kayvon brings a very strong product sense to the table to make everything we do at Twitter better,” the letter read.

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