Twitter stock soars 10% after beating expectations for revenue and user growth

Analysts expected Twitter, the 140-character messaging service often used by U.S. President Donald Trump, to report earnings of 1 cent per share, compared with 15 cents per share in the first quarter of 2016, on revenue of $511.9 million. Average monthly active users reached 328 million, up 6% vs. 4% in the prior quarter, while daily active users jumped 14% compared to the same time past year. Although the company isn't yet profitable, its losses decreased by 23 percent to $62 million.

Investors have piled the pressure on Twitter to grow its user base and the company has responded by moving to diversify its offering through new features including live video broadcasts.

Twitter shares rose as much as 11 percent on Wednesday.

Monthly users were on the up, climbing six per cent on the same quarter a year ago and almost three per cent on the previous quarter to 328m.

A tweet from Twitter's investor relations arm noted that "we continue to expect revenue growth to meaningfully lag audience growth in 2017".

Twitter has never turned a profit, and for the first time since going public in 2013, it reported a decline in revenue from the previous year.

Analysts from Wall Street think that the company's business is declining and the company is expected to report a year-over-year decline in revenue, which would be the company's first ever loss, when the earnings are released on Wednesday.

Trump's tweets generate headlines on a daily - if not hourly - basis, ensuring Twitter is constantly in the news cycle.

Twitter executives, pointing to its growth in monthly active users, said it's making progress.

Specifically, Twitter says that revenue is down 8% year-over-year to a total of $548 million for the quarter.

But this quarter, analysts are predicting that even Twitter's revenue could take a hit.

Nevertheless, the company still remains behind competitors such as Facebook (NASDAQ:FB), Instagram and Snapchat with regards to performance and user activity. The microblogging service's first-quarter results show why it's hard to keep its "gold mine" from paying off to some degree, particularly when external conditions have become a little more favorable.

Things are more encouraging when we look at Twitter's monthly active users, which hit 328 million in Q1.

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