Twitter shares slumped more than 11 percent in US after-hours trade after quarterly results revealed user numbers had declined sequentially.
Shares had closed up 4 percent at $14.98 in regular trade.
Twitter earnings also disappointed shareholders with its revenue guidance for the first quarter 2016 at between $595 million and $610 million which was below Wall Street expectations of about $633 million.
Announcing quarterly results, Twitter said monthly active users declined to 305 million in the fourth quarter from 307 million in the previous quarter. The numbers excluded SMS-only users.
Shares took a hit as the user numbers had dropped below expectations. According to Wall Street estimates the user numbers for the fourth quarter was expected to be 309 million.
"We saw a decline in monthly active usage in Q4, but we've already seen January monthly actives bounce back to Q3 levels. We're confident that, with disciplined execution, this growth trend will continue over time," the company wrote in a letter to shareholders.
The micro blogging site's fourth quarter earnings were pegged at 16 cents per share against analyst expectation of 12 cents per share on $710 million as per Thomson Reuters consensus estimates.
Revenue in the fourth quarter, however, recorded an increase from the year-ago quarter. Overall revenues were $710 million for the quarter, an increase of 48 percent from the year-ago period. Advertising revenue also posted a 48 percent year-on-year rise at $641 million but it was less than the $647.7 million expected by Wall Street.
