The number of active users on the social network reached 255 million in the first three months of 2014, up 5.8% on the previous quarter but below analysts' expectations.
Twitter also reported a net loss of $132m (Â£78m) for the latest quarter.
But it posted revenue of $250m, $226m of which came through advertising.
Despite higher user growth than the previous quarter, when Twitter saw just a 3.8% rise, Twitter's stocks fell by more than 11% in after-hours trading, sending the price below its initial public offering of $38.80 per share.
The rise in Twitter active users comes after four consecutive quarters of declining growth, but the turnaround was not strong enough to convince investors.
Twitter's chief executive Dick Costolo highlighted the company's revenue increase, and said it was "fuelled by increased engagement and user growth".
The integration of advertising management software MoPub had helped Twitter "reach more than 1bn iOS and Android users each month", he added.
Another measure of user engagement, timeline views, increased 15% in the first three months of 2014 to 157 billion.
But the number of Twitter users is still well below its most high-profile competitor, Facebook, which boasts 1.28 billion active users.
WhatsApp, the messaging app Facebook bought for $19bn, recently passed the 500 million user milestone.

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The 52-year-old replaces Richie Foran, who was sacked following relegation from the Premiership.
He has signed a two-year deal after leaving his head of coach education post at Hearts, where he spent 18 years at a player and manager.
The Highlanders won promotion to the top flight for the first time under Robertson's guidance in 2003.
Robertson left in 2004 to take over at Hearts and has had spells in charge at Ross County, Livingston and Derry City.
He has not held a managerial position since leaving East Fife in March 2012.
"This time last week it wasn't even on the radar," Robertson said of the job. "I didn't apply for the job, I had a very responsible, high-profile job at Hearts - commercial and the academy, working as head of coaching there to rebuild it.
"I was as surprised as anybody when the call came in to say, would you like to come up and have a chat?
"This is a massive challenge and one I'm looking forward to, and it's one we can achieve together as a club. We know what's ahead of us. It's far easier to stay in the Premiership, I think, than get out the Championship, but it's a challenge we're going to meet head-on.
"The fans' expectations will be high, and they should be, but they'll not be any higher than mine."
Caley Thistle chairman Willie Finlayson added: "We had an excellent interview process with some strong candidates but John emerged as our unanimous choice.
"We were hugely impressed with his tremendous drive, determination, communication and motivational skills.
"He clearly has a great knowledge of the game in Scotland and is both well respected and connected. We firmly believe he is the right man to lead us back into the Premiership."
After the departure of John Hughes, Foran was promoted to player-manager last summer on a four-year contract, having been at the club since 2009.
They won three of their last five fixtures but could not avoid finishing last and dropping down to the Championship.
Chairman and chief executive Kenny Cameron stood down three days after relegation was confirmed.
Aberdeen granted Inverness CT permission to speak to Under-20s coach Paul Sheerin about their managerial vacancy before deciding Robertson was the man to take them forward.
Shares in Twitter dropped to their lowest levels since the company's stock market flotation, as it reported slower than expected user growth.
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John Robertson is the new manager of Inverness Caley Thistle, returning to the club he left almost 13 years ago.