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Some estimates put Twitter’s accumulated losses since the company was founded at nearly $3bn.
Revenue rose by 58% to $569m, driven by an increase in advertising sales and above the forecast of up to $560m. But slow growth and a disappointing revenue forecast pushed the share price lower.
Twitter shares fell by 14% to $27.38 in extended trading after closing at $31.34 on the New York Stock Exchange, according to Reuters.
Twitter forecast fourth-quarter revenue of $695m and $710m, well below analysts' average estimate of $739.7m.
Analysts said the forecast suggests that Twitter needs more time for a turnaround as social media competition grows from Facebook’s Instagram and Messenger apps.
Commenting on the first results since returning in October 2015 as Twitter’s chief executive, Jack Dorsey said the company's performance had improved.
As interim CEO in the previous quarter, he delivered a downbeat view of Twitter's earnings and criticised its product offerings. Dorsey served briefly as Twitter's CEO in 2008 before he was ousted.
"We continued to see strong financial performance this quarter, as well as meaningful progress across our three areas of focus: ensuring more disciplined execution, simplifying our services, and better communicating the value of our platform," said Dorsey.
"We've simplified our roadmap and organisation around a few big bets across Twitter, Periscope, and Vine that we believe represent our largest opportunities for growth."
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Twitter said it had 320 million average active monthly users in the third quarter, up from 316 million in the previous quarter, but below analysts’ expectations of 324 million.
In a conference call after the earnings announcement, executives said savings from staff cuts would be invested in unspecified “top priority products”.
Dorsey said Twitter is still hiring and investing in talent and looking at some more “bold rethinking” and “bold experiences”.
Since taking over as CEO, Dorsey has launched Moments, which features the best tweets and content; laid off more than 300 employees; given back a third of his stock to employees; and hired former Google executive Omid Kordestani as executive chairman.