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twitterTwitter met Wall Street’s lowly expectations with its quarterly earnings report on Tuesday, showing a net loss of $137 million on revenue of $502 million, compared to the $481 million analysts predicted. That puts the company’s revenue up 61 percent year-over-year.

But the social network’s slowing user growth is the real storyline the company was hoping to turn around — but didn’t.

Twitter grew its active user count by 8 million from Q1 to 316 million in Q2, up 15 percent year-over-year. That’s down from 18 percent growth last quarter, 20 percent the quarter before that, 23 percent before that and 24 percent at this time last year.

If you take out “SMS Fast Followers,” or users who only subscribe to certain accounts through text messages instead of the app, Twitter added just 2 million users.

For comparison, Facebook has almost three times as many active users as Twitter, and still grew by 17 percent in Q1.

“Our Q2 results show good progress in monetization, but we are not satisfied with our growth in audience,” interim Twitter CEO Jack Dorsey said in the earnings release.

That’s a troubling trend for a company whose most valuable asset is a dedicated audience. But otherwise, investors seemed pretty happy with Tuesday’s report, sending the company’s stock up about 5 percent in after hours trading.

Twitter reported $452 million in advertising revenue, 88 percent of which is from mobile. Total advertising sales were up 63 percent year-over-year.

The company expects revenue between $545 million and $560 million next quarter, and is still searching for a new chief after former CEO Dick Costolo stepped down on July 1.

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