Updated to include comments from Jim Cramer.

NEW YORK (TheStreet) -- Twitter (TWTR - Get Report) topped analysts' revenue estimates for the second quarter, but investors seemed to be more concerned about less-than-stellar user growth.

The San Francisco-based social-media company reported late on Tuesday revenue of $502 million, up 61% from the same period a year earlier, and above analysts' expectations of $481 million. Twitter beat expectations on earnings as well, with 7 cents per share, compared with expectations of 4 cents per share.

Nonetheless, Twitter failed to report any significant gains in average monthly active users (MAUs), claiming a total of 316 million MAUs for the first quarter (including SMS users), up 15% year over year, but only 8 million higher than the previous quarter. Excluding SMS users, MAUs stood at 304 million, up 12% year-over-year, and just 2 million higher than the previous quarter.

"Product initiatives we've mentioned in previous earnings calls like instant timelines and logged out experiences have not yet had meaningful impact on growing our audience or participation," Jack Dorsey, the interim CEO, said on the earnings call. "This is unacceptable and we're not happy about it."

Dorsey also had no update on the search for a more permanent CEO. Meanwhile, Twitter executives seem to be leaving the company left and right.

"They are basically saying if you want results any time soon sell our stock. I wish we could comply for actionalertsplus.com but we are frozen," said TheStreet's Jim Cramer, Portfolio Manager of the Action Alerts PLUS Charitable Trust Portfolio.

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For the third quarter, Twitter expects revenue to fall between $545 million to $560 million.

Despite a jump of more than 5% just before the earnings call and a spike right after earnings were reported, shares later fell back down after-hours on Tuesday. In premarket trading Wednesday morning, shares of Twitter were down 10% to $32.93.

Here are the three key takeaways from Twitter's second-quarter earnings report:

Steadying Revenue

Although Twitter management highlighted many challenges and uncertainty for the company, revenue has been a steady positive. Revenue for the quarter was well above both analysts' expectations and the company's guidance from last quarter.

Much of this growth stems from successful advertising initiatives.

"From an advertising products perspective, year-over-year growth was driven by promoted tweets and specifically promoted tweet features such as video, mobile app downloads and website cards," Twitter Chief Financial Officer Anthony Noto said during the earnings conference call. "These features were also the primary driver of quarter-over-quarter revenue growth as we continue to execute on initiatives to improve targeting, measurement and creative capabilities for our advertisers with direct response objectives."

The recent acquisition of ad-tech firm TellApart has helped Twitter continue to monetize its platform with enhanced cross-device measurement. The DoubleClick partnership also helps Twitter with attribution and more successful advertising.

"Despite slowing user growth, advertising revenue exceeded the top-end of guidance (ex-acquisition as well) due to better ad monetization," Canaccord Genuity analyst Michael Graham wrote in a note Wednesday morning.

Stalled User Growth

Despite the revenue beat, though, Twitter showed pretty slow growth in its user base. The stall wasn't too surprising, but is still worrisome.

Twitter added only 2 million monthly active users (excluding SMS users) in the quarter.

"The big negative from the quarter was the acknowledgment that MAU growth would likely take some time to rebound, placing a cloud on what was otherwise a slightly better than expected report," Barclays analyst Paul Vogel wrote in a note Wednesday morning. "By the company's own admission, Twitter remains challenging to use and understand for the mass market consumer. The value proposition is still poorly understood, despite high overall awareness of the product."

Dorsey himself admitted that this was unacceptable and proceeded to explain that the company would work to reignite user growth by simplifying the service and better conveying its value to potential users.

"People all over the world know of the power of Twitter, but it's not clear why they should harness it themselves," Dorsey said during the call. "An answer to why Twitter must be articulated clearly and felt everywhere throughout the service. We are advancing this marketing communications work as fast as possible and ensuring it's coordinated with the simplification of our service."

It's All About Patience

One of the major themes of Tuesday's call was patience. Dorsey and Noto kept repeating that it would take time to get the company to where it needs to be and to attract new users.

Dorsey also said it would take time to find a more permanent CEO, as well as to start a more aggressive marketing campaign.

"We will take the necessary time to build the service people love to use every single day," Dorsey said. "And we realize it will take some time to show results we all want to see."

For Twitter investors, the hope is that these longer-range strategies will eventually bear fruit.

"We remain cautiously optimistic on Twitter in the long term due to: logged out user opportunity, new products, Google partnership, better targeting, and the potential to improve mass market penetration," SunTrust analyst Bob Peck wrote in a note Wednesday morning. "However, in the short term given recent challenges, we think investors have labeled Twitter a 'prove it' story. Execution on product rollouts and their ultimate effectiveness in growing MAUs/engagement will remain paramount."