Twitter’s ad revenues soar but its user growth issues loom large
Twitter has recorded its first full year of profitability thanks to a 23% year-on-year surge in revenues to $791m – but onboarding new users continues to be a thorn in its side.
With ad revenues making up the bulk of the total, the social network’s overall revenues for the Q4 clocked in at $909m – a 24% increase on the same time last year. Net income was $255m for the quarter and full year profit was $1.2bn.
More than half of Twitter’s ad revenues came from clients buying video slots.
Giving some insight into how brand campaigns performed on Twitter, chief executive Jack Dorsey said ad engagements were up 33%, suggesting the “mix shift to video continues” and that “better ad relevance” was driving more interaction with people in the timeline.
However, while the financials were positive, Twitter’s stock took a beating on Thursday (7 February) due to declining user numbers and the revelation that it would no longer report monthly active users in its updates.
“We want to provide something valuable to people on Twitter every day, and we believe that monetizable DAU (mDAU), and its related growth, are the best ways to measure our success,” explained the company in a note to shareholders.
In tandem with this, Twitter for the first time disclosed the number of average daily active users exposed to ads within its walls; a figure which rose to 126 million in the fourth quarter from 115 million last year and 124 million in the previous quarter.
It’s final set of monthly user numbers revealed that for third quarter in a row sign-ups had dropped, with a decrease of 5 million to 321 million on the previous quarter. However, the number was up 3% on 2017.
The news that operating expenses would increase 20% in 2019, owing to Twitter stepping up spending to fight online abuse, fake news and hate speech also perturbed investors.
The company said there was a 16% year-on-year decrease in reports of abuse on Twitter in 2018.
Article written by: Rebecca Stewart0