Twitter misses on fourth-quarter revenue but beats on earnings (TWTR)

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Twitter missed analysts' expectations for its fourth-quarter revenue — reporting $717 million versus estimates of $740 million — as advertising spend lagged behind a recent acceleration in daily usage of the platform.

However, the company did beat on earnings — reporting EPS of $0.16, versus the $0.12 expected by analysts.

Twitter's monthly active users grew to 319 million, up from 317 million in the prior quarter. Daily active usage grew 11% year-on-year, up from growth of 7% in the third quarter, which the company credited to product improvements, marketing and "organic trends."

In a press release, Twitter CEO Jack Dorsey described 2016 as a "transformative year" in which the company attempted to focus its efforts on explaining why people use the platform and making it easier for them to use it.

Dorsey said: "We overcame the toughest challenge for any consumer service at scale by reversing declining audience trends and re-accelerating usage. As a result, in the fourth quarter, daily active usage accelerated for the third consecutive quarter, and we see this strong growth continuing. While revenue growth continues to lag audience growth, we are applying the same focused approach that drove audience growth to our revenue product portfolio, focusing on our strengths and the real-time nature of our service. This will take time, but we're moving fast to show results.”

Twitter warned its revenue growth will continue to lag its audience growth, "due to the sales cycle" and said it could also be negatively affected by the "escalating competition for digital advertising spending."

This is the first quarterly earnings Twitter has reported without its former sales chief and COO Adam Bain, who announced he was leaving the company in November. It also follows the headcount reduction Twitter announced in October, which affected around 9% of its global workforce.

Here are the key numbers from Twitter's Q4 earnings:

Q4 revenue: — $717 million versus $740.14 million expected by analysts

Q4 EPS (adjusted): $0.16, versus $0.12 per share expected by analysts

Q1 guidance: Adjusted EBITA to be between $75 million and $95 million, adjusted EBITDA margin to be between 17% and 17.5%.

Q4 monthly active users: 319 million, up from 317 million in the prior quarter.

Q4 daily active users: up 11% year-over-year.

Twitter will host a conference call with analysts at 5:00 a.m. Pacific Time/8:00 a.m. Eastern Time on Thursday.

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