(Reuters) - Twitter Inc (TWTR.N) shares fell about 5 percent Wednesday after the social network said its revenue growth would slow this year and costs rise as it works to fight the spread of hate speech and allegations of election manipulation through its service.
That outlook overshadowed the second profitable quarter in the 12-year-old company’s history, topping Wall Street estimates for revenue, profit and monthly active users, as advertisers in Asia and other markets outside the United States embraced its video ads.
Revenue growth for the remainder of 2018 will be similar to the slower rates of 2016, Twitter said. It said its tally of daily active users, a closely watched metric, grew 10 percent year-over-year, a slower pace of growth than the 12 percent to 14 percent maintained in recent quarters.
That slower user growth “has spooked investors,” Wedbush Securities analyst Michael Pachter said.
Twitter said it expected to increase its workforce by 10 percent to 15 percent in 2018 to make discussions on the service more civil, increase ad sales and meet other priorities. Twitter cut its headcount 6 percent last year.
Its shares traded down 5 percent around midday at $28.92 on the New York Stock Exchange. Through Tuesday's close, they were up 26.9 percent this year, compared with a 1.5 percent decline in the S&P 500 Index .SPX.
Total revenue rose to $664.9 million, beating analysts’ expectations for $607.6 million, according to Thomson Reuters I/B/E/S.
Twitter swung to a net profit of $61 million, or 8 cents per share, in the first quarter, from