Even though Twitter has more than 300 million active users, it still hasn’t managed to get into the black.
In a shareholder document for the year ending 2015, the company said it had a deficit of more than $2.09 billion since it was founded due to “significant operating losses.” Despite the company’s revenue growing from $28.3 million in 2010 to $2.22 billion in 2015, it still hasn’t managed to become profitable.
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The company blames a “decline in the growth rate of [its] user base” and that future revenue growth will depend significantly on the company’s ability to attract new users and increase overall engagement.
In the risks section of the document, the company admits that “despite our efforts to reduce barriers to consumption, people who are not our users may not understand the value of our products and services and new users may initially find our product confusing.”
It also went on to say that “there may be a perception that our products and services are only useful to users who tweet, or to influential users with large audiences” and that such a perception is a key problem for the business.
Twitter was founded in 2006 and hasn’t made a profit since its inception. That’s despite significant growth in its overall revenue, because its operating costs have also grown significantly.
An overall $2 billion loss isn’t that surprising, given the scale Twitter operates at, but it is a lot of money given that the company has been operating for just six years.
➤ Twitter FY15 year end [Shareholder.com]