Twitter shares slumped 10% in early trading as the social media giant reported its slowest ever quarterly revenue growth since going public.
Its number of monthly active users actually climbed two million to 319 million in the final quarter of last year, but a decline in income from advertisers in that period will concern investors.
Ad revenue fell in the last three months of 2016, down from $641m to $638m year-on-year. This owed to a downturn in US performance, which wiped out international gains.
The year had started brightly, with ad revenue up in the first quarter, but ongoing concerns over trolling and hate speech on the site have come back to bite hard.
Twitter recorded a 14% rise in annual revenues overall, to $2.5bn, but this increase still fell below analysts' expectations.
The San Francisco-based company suffered losses of $457m in 2016, despite cutting its workforce by 9%. Since floating on the stock market in 2013, it has lost close to $2.8bn.
It has been aiming to turn a profit by the end of 2017.
Jack Dorsey calls on advertisers to focus on Twitter's strengths
CEO Jack Dorsey said in his Q4 earnings call:
"We said on our last call that revenue growth will lag usage. As you see in our numbers and our outlook, this has proven to be the case.
"Our advertisers need the same approach we applied to our consumer service: reset and focus on our strengths.
"This means clearly differentiating and complementing Twitter’s real-time nature and proving to advertisers that Twitter is easy and works for them and their customers.
"2016's challenge was reaccelerating our consumer usage. We did it, and that gives us the confidence we can do it again. 2017's challenge is simplifying and differentiating our revenue products. It will take time to show the results we all want to see, and we’re moving forward aggressively.
"The whole world is watching Twitter. While we may not be currently meeting everyone’s growth expectations, there is one thing that continues to grow and outpace our peers: Twitter’s influence and impact.
"You don’t go a day without hearing about Twitter. How it was used as the fastest way to send a message to the whole world in an instant.
"How it carried some of the most important commentary and conversations. How it mobilized people into action. That’s powerful, valuable, fundamental, and the reason we’re all here fighting so hard for this service and company we love.
"It’s been hard, it will continue to be hard, and it’s all worth it. Twitter forever changed the way the world communicates, and we will do it again."
