Twitter has been emphasizing improving the health of the platform, which includes the removal of thousands of spam and suspicious accounts and allocating resources to comply with new privacy regulations in Europe.
Those higher costs could eat into Twitter's future earnings, some analysts said.
"The street is just about done giving them a break about it", said JJ Kinahan, chief market strategist at TD Ameritrade.
It expects capital expenditure of between $550 million and $600 million, well above analysts' average estimate of $415 million for 2019.
Still, in early trading on Thursday morning, Twitter shares (twtr) are tumbling. Contributing to Twitter's monthly user count woes, the company has cracked down on bots and purged hundreds of fake accounts from Iran, Russia, and Venezuela that were believed to be targeting the 2018 midterm elections. In its guidance, the company offered a revenue range of $715 million to $775 million against analyst consensus of $764.9 million, according to Refinitiv data published by CNBC. It has hundreds of millions of daily users and many rely on it to ...
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The company said it saw an increase in daily users who log in to Twitter on a mobile device vs. those who use only desktop computers.
Monthly active users totaled 321 million in the fourth quarter, in line with analysts' forecasts but down from 330 million a year earlier and 326 million in the third quarter.
Total advertising revenue rose 23 percent to $791 million.
FILE PHOTO - A 3D-printed logo for Twitter is seen in this picture illustration January 26, 2016.
Twitter's 24 percent year-over-year revenue increase (26 percent on constant currency basis) makes it clear the company is able to show revenue growth despite a declining user base, according to eMarketer Senior Analyst Jasmine Enberg. $791 million of that figure comes from advertising revenue, split $425 million in the United States compared to $366 internationally - while data licensing making up the other $117 million.
Twitter has made its first annual profit in its 13-year history but another fall in the number of its users and a disappointing sales forecast took the gloss off the results and sent its shares down almost 10 per cent.