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Twitter Inc. on Tuesday continued the string of disappointing quarterly reports under chief Jack Dorsey with its worst-ever revenue growth and weak user numbers.

The social-media company's revenue increased 20% to $602 million for the period ended June 30, its eight straight quarter of shrinking growth. Analysts surveyed by Thomson Reuters on average estimated Twitter would post revenue of $606.8 million.

The company also posted a weak revenue outlook, saying it expects $590 million to $610 million, well below analysts' expectations of $678 million.

Shares of the company dropped sharply after hours, recently declining 7.9% to $17 a share.

Under Mr. Dorsey, Twitter has focused its efforts on trying to improve and simplify the product in a way that would attract new users and keep the existing ones around. It has tried to make it easier for users to cull through the voluminous tweets in order to find interesting content faster, eliminated confusing rules and tweaked the way it counts what will be part of the 140-character message limit.

What's more, as Twitter continues to struggle, competitors Facebook Inc., Instagram and Snapchat have gained ground. About 1.65 billion people sign into Facebook each month while 500 million log into Instagram. About 150 million people use Snapchat each day, according to a person familiar with the matter.

Part of the problem, Twitter executives have said, is some people still don't know why or how they should use Twitter—a point the company concedes it has done a poor job of explaining. More than a decade after its founding, Twitter on Monday said it would launch a marketing campaign that will explain what Twitter is.

Twitter is hoping to pull in more users with its live-video strategy. It has signed a spate of live-streaming deals in recent months for rights to broadcast politics, sports and financial news content. It has focused on sports in particular, resulting in deals that include the rights to live-stream games from the National Football League, Major League Baseball and National Hockey League this fall. Earlier this month, the National Basketball Association agreed to produce two new shows created exclusively for Twitter beginning in the 2016-2017 season.

Twitter will be able to earn revenue from the ads sold against this content. The company still has a lot of catching up to do against market leaders Google, owned by Alphabet Inc., and Facebook.

According to eMarketer, Twitter will earn $2.61 billion in total digital-ad revenue world-wide this year, up 30.8% from 2015. Twitter's share of the global digital-ad market is expected to edge up slightly to 1.4% from 1.3% last year.

Twitter is projected to grab a 7.9% share of world-wide social network ad spending this year, according to eMarketer, a fraction compared with Facebook's estimated 67.9%.

Twitter remains unprofitable. It posted a loss of $107.2 million, or 15 cents a share, compared with a year-ago loss of $136.7 million, or 21 cents a share. Excluding certain expenses, Twitter said it would have earned 13 cents a share. Analysts had expected earnings of 10 cents a share on that basis.

Write to Yoree Koh at yoree.koh@wsj.com

(END) Dow Jones Newswires

July 26, 2016 16:45 ET (20:45 GMT)

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