NEW YORK — Twitter failed to grow its user base at a quick enough pace for investors in the second quarter even as revenue grew sharply, feeding concerns about whether it can ever become a mass-market service like Facebook or Google.
The beleaguered company is searching for a permanent CEO to replace Dick Costolo, who stepped down at the beginning of this month. Co-founder and chairman Jack Dorsey is serving as interim CEO.
Dorsey said Tuesday that while the results show “good progress in monetization,” the company is “not satisfied” with the growth of its audience.
On average, Twitter had 316 million monthly active users in the second quarter, up 15 percent year-over-year but up less than 3 percent from the first quarter of this year.
San Francisco-based Twitter Inc. posted a loss of $136.7 million, or 21 cents per share, in the April-June period. That compares with a loss of $144.6 million, or 24 cents per share, a year earlier.
Adjusted earnings were 7 cents per share, above the 5 cents that analysts surveyed by Zacks Investment Research had expected.
Revenue jumped 61 percent to $502.4 million from $312.2 million. Analysts had expected lower revenue of $487.4 million.
User growth has been an ongoing challenge for Twitter, as it tries to make its service a widely used product rather than a niche short-messaging service popular with journalists, celebrities and young people.
For the current quarter ending in September, Twitter said it expects revenue in the range of $545 million to $560 million. Analysts surveyed by Zacks expected revenue of $563.9 million.
The company expects full-year revenue in the range of $2.2 billion to $2.27 billion.
Twitter had no updates on its CEO search.
After an initial after-hours spike, Twitter’s stock fell $2.54, or 7 percent, to $34. Twitter shares have increased roughly 2 percent since the beginning of the year, and have been trading near a 52-week low. They closed Tuesday at $36.54, a decline of nearly 4 percent in the last 12 months.