The stock price of Twitter (NYSE:TWTR) plummeted more than 12% during the extended trading on Tuesday after the social media company reported its financial results for the third quarter.

Twitter posted better-than-expected earnings for the quarter, but its user growth disappointed investors. Additionally, the social media company’s revenue guidance was lower than the estimate of Wall Street analysts.

Twitter 3Q financial results

Twitter reported that its non-GAAP earnings were $0.10 per share, higher than the $0.05 per share expected by analysts. Its revenue increased 58% to $569 million year-over-year. Analysts expected the company to deliver $560 million in revenue.

In a statement, Twitter CEO Jack Dorsey said, “We continued to see strong financial performance this quarter, as well as meaningful progress across our three areas of focus: ensuring more disciplined execution, simplifying our services, and better communicating the value of our platform.”

“We’ve simplified our road map and organization around a few big bets across Twitter, Periscope and Vine that we believe represent our largest opportunities for growth,” he added.

Twitter user growth: a long-term challenge

During the quarter, Twitter said its total average monthly active users increased 11% to 320 million excluding SMS Fast Followers. The number was lower than the 324 million estimated by analysts.

Bloomberg Intelligence analyst, Paul Sweeney commented, “Twitter remains a wait-and-see story. Investors were hoping that this quarter would finally get the stock out of the doghouse.”

Sweeney added, “The lack of meaningful user growth will clearly be a long-term challenge for Jack Dorsey and his team.”

Twitter 4Q guidance

For the fourth quarter, Twitter expected its revenue to be around $695 million to $710 million, lower than the $741.6 million consensus estimate. The company expected to achieve an adjusted EBITDA in the range of $155 million to $175 million.

During an interview with CNBC’s Closing Bell, finance columnist Mike Santoli commented, “They didn’t tank the quarter, they tanked guidance. That really is the story here. The trajectory is just not what the Street needs to see. No acceleration. I guess, really, investors are not in a position to see this management as intentionally low-balling.”