Earlier this week Twitter (NYSE: TWTR) announced its first quarter performance, which surpassed market expectations. But the market is still not pleased. This was the first ever quarter that showed declining revenues since the company went public. And, the future doesn’t look much rosier.

Twitter’s Financials

For the quarter, Twitter’s revenues fell 8% over the year to $548 million. The company reported an adjusted EPS of $0.11. The market had forecast revenues of $513 million and an EPS of $0.01 for the quarter.

By segment, advertising revenues fell 11% to $474 million. Data licensing and other revenue increased 17% to $74 million.

By region, revenues from the US fell 13% to $341 million and international revenues grew 2% to $208 million.

Among operating metrics, daily active user (DAU) count improved 14% over the year and monthly active usage (MAU) rose by 9 million to 328 million. The market was looking for a net growth of 4 million users to 321 million. Average US MAUs grew 7% and average international MAUs grew 6%. Within advertising, total ad engagements increased 139% over the year and cost per engagement (CPE) fell 63% over the year.

The increase in the users is partly attributed to the increasing adoption of its live premium video content. The service had 45 million unique viewers, up 31% sequentially. Additionally, Twitter is also benefiting from the tweets from President Donald Trump’s Twitter account and has seen significant increases in traffic and/or subscribers to the news and political accounts since the election.

For the current quarter, Twitter forecast an adjusted EBITDA of $95-$115 million.

Twitter’s Advertising Worries

Twitter may have delivered impressive results and surpassed market expectations on the user statistics as well. But all that does not really spell a rosy future for the company. Unlike other bigger players like Facebook and Alphabet, which have figured out the code to crack the mobile advertising market, Twitter has still not figured out how to translate the increasing user metrics to higher advertising revenues.