Twitter CEO Dick Costolo declared last quarter that Twitter was taking measures to make the service more welcoming to new users. Evidently there's a lot more work to be done.

Two growth stories that are crucial to the fate of the company -- now up to 3,000 employees -- are currently unfolding: one of ads and one of users. In the case of the former, the news is very good for Twitter. Total revenue grew to $250 million in the first quarter of 2014, up 119% year over year and also up slightly from the holidays. More than 90% came from advertising, and 80% percent of that ad revenue came from mobile, up from 75% in the previous quarter.

Meanwhile, ad revenue per thousand "timeline views" -- a metric that represents every time users refresh their Twitter streams -- was up 96% to $1.44, a good indicator that Twitter is getting better at extracting revenue out of user engagement.

On the user front, however, growth was still relatively flat. Twitter added 14 million monthly active users last quarter, up to 255 million from 241 million in the fourth quarter of 2013. In the U.S., it added 3 million users, upping its total to 57 million. That's better than the 1 million it added in the fourth quarter, but it shows that Twitter is still failing to appeal to the mass social-networking audience that Facebook -- which had 202 million monthly users in North America last quarter -- has cultivated.

It's a problem that Twitter is eager to address, through product changes like the revamped desktop user profiles it introduced earlier this month on the Today show, and potentially even through marketing of its own. Ad Age reported in March that Twitter was reaching out to ad agencies, looking for creative ideas for how to market the service.

Most of the new users are coming from abroad, which is problematic for Twitter because they're currently much less valuable. Ad revenue per thousand timeline views for U.S. users was $3.47 last quarter, compared to $0.61 for international users.

Twitter stock was down by more than 10% in after-hours trading.

Mr. Costolo said today that he's pleased by Twitter's user growth -- which he characterized as "reaccelerated" in the U.S. -- and that he sees it as the result of an ongoing effort and not due to any single change. He mentioned algorithmic changes in the recommendation of accounts to follow and efforts to make Twitter more visually engaging as contributing factors. But he was also circumspect about the road ahead.

"We still firmly believe that it will be the combination of changes that we make over the course of the year on that roadmap that will result in a change in the growth of the platform," said Mr. Costolo. He also teased improvements to come, including in the area of direct messaging, which are intended to make the network stickier for more users.

Twitter's net loss was was $132 million, up from $27 million a year earlier, with $126 million of that allotted for stock-based compensation expense. It also made $24 million from its data licensing business "and other revenues", up 76% year over year.

Ad performance
Even if Twitter's user growth remains modest in the near-term, there are still plenty of opportunities for it to generate more revenue from the users it has, which last quarter's results show.

"Twitter's ad products are still relatively new, and there's plenty of pent-up demand [from marketers] in the existing user base once the ad units and the measurement model mature," said Bryan Wiener, chairman of the social-marketing company Expion.

Twitter's chief financial officer Mike Gupta said that ad engagements -- such as retweets, replies and favorites -- had increased 28% quarter over quarter and 700% year over year. That was largely due to the introduction of "media-forward" timelines last October, by which photos automatically display in users' Twitter streams.

It's a key data point for Twitter, since advertisers pay for engagements, not impressions.

Total timeline views per monthly active user are still well beneath the levels they were at in early 2013. However, Mr. Costolo attributed that to changes intended to make the Twitter stream more engaging -- namely "threaded conversations," by which users can see conversations between users they follow in sequence instead of them populating the stream at precisely the time they were published.

Mr. Gupta observed that Twitter had had strong advertiser demand around events like the Super Bowl, Grammys, Oscars and Olympics.

"We're seeing them increase their mobile budgets around live events," he said.

Twitter didn't break out revenue for products and programs like MoPub or Twitter Amplify. However, Mr. Gupta did say that anticipated revenue from Twitter's newly launched mobile app install ads has been factored into the outlook for the second quarter. Revenue is projected to be between $270 million and $280 million.