Twitter shares nosedived in after-hours trading on Wednesday (US time) after the microblogging platform reported no growth in users during the fourth quarter, a key metric for the company's outlook.
Shares fell as low as $US13.31 after the closing bell. Prior to the earnings report, Twitter shares had closed up 4 per cent to $US14.98 apiece.
The company reported revenue of $US710 million ($1 billion) the last three months of 2015, meeting estimates by analysts.
However, Twitter's monthly active users remained at 320 million, the same as the third quarter.
Following some optimism after Jack Dorsey returned as CEO last year, the San Francisco company once again is facing serious doubts about its viability and growth potential.
Robert Peck of SunTrust Robinson Humphrey said Wednesday's earnings would be a "seminal moment" for Dorsey and the Twitter team given the company's recent executive departures, stock price declines and negative investor perception.
Dorsey "is tasked with articulating the vision for the company heading into 2016 and beyond. He must be able to give employees and Wall Street a reason to believe," Peck wrote in a research note. "Without this, the stock could continue to be under pressure."
Dorsey has been trying to lead a revamp of the Twitter service, and ahead of earnings on Wednesday, the company revealed a new Timeline feature that shows tweets out of order — a controversial move that takes away from Twitter's real-time feel.
An earlier change, Moments, which curates and promotes popular tweets, was not well-received.
"We do not think that Moments drove a meaningful increase in users, as much of the content remains outdated or irrelevant," Wedbush Securities analyst Michael Pachter said in a note to investors last week. "In addition, Twitter remains difficult to use relative to its peers, and a solution does not appear to be imminent."
Los Angeles Times