It may seem like whenever Twitter Inc. is in the news it’s rarely for a good reason, but the company’s latest earnings report has given it something to smile about.
During the first quarter of 2017, the social media icon’s daily active usage grew by 14 per cent over the same period last year, while the average number of monthly active users reached 328 million, a six per cent increase from the previous quarter’s 319 million.
That written, the Wall Street analysts who care about little beyond the company’s (lack of) revenue growth found little to assuage their fears, as Twitter’s $548 million (all figures USD) quarterly revenue represented an eight per cent decline from last year, while the company’s quarterly net loss was $62 million.
In response, the company emphasized its efforts to streamline operating costs, noting that its net loss was significantly reduced compared to previous quarters (the company posted a net loss of $167.1 million during the fourth quarter of 2016).
“While we’ve made progress toward building a better, more cohesive user experience that is driving accelerating audience growth, there is still work to be done to translate that into revenue growth,” the company wrote in its letter to shareholders, released on April 26. “We believe, however, that executing on our plan and growing our audience should result in positive revenue growth over the long term.”
That plan, according to the letter, includes further reinforcement of the new anti-abuse policies Twitter revealed in February, which thus far have been successful.
“We’ve been focused on three key areas: communicating more clearly about actions we take, giving people more tools to control their experience, and further leveraging our technology to reduce abusive content,” the letter read. “We’ve made meaningful progress toward identifying and removing accounts that demonstrate abusive behavior and, as a result, we’re seeing less abuse reported across the service.”
Growing its audience also remains a priority for Twitter, with the company noting in its letter that during the quarter it refined the timeline to display a broader set of tweets from a
user’s network, applied deep learning models to show the most relevant tweets first, and used machine learning to improve the relevance of notifications, increasing user engagement.
Creating a safer service also probably contributed to the boost in user engagement, Twitter noted, highlighting additional February updates that were aimed at preventing users who have been permanently suspended from creating new accounts, delivering safer search results, and reducing notifications from conversations started by accounts that users had blocked or muted.
“Over time, we expect to do even more in this area, with a specific focus on identifying and collapsing potentially abusive and low-quality replies,” the company wrote. “All of these initiatives reflect our greater sense of urgency in regard to safety, and we look forward to sharing more product updates in the coming weeks and months.”
Twitter also plans to continue further simplifying the platform itself, touting recent changes such as giving users more characters to work with in replies by removing @names from tweet text and the creation of a unified application program interface (API) platform, including new direct message APIs. The company also introduced an update that makes it easier for users to follow conversations and replies in late March.
In an April 26 statement, Twitter CEO and co-founder Jack Dorsey acknowledged the company’s challenges but remained optimistic about its long-term health.
“We’re delivering on our goal to build a service that people love to use, every day, and we’re encouraged by the audience growth momentum we saw in the first quarter,” Dorsey said. “While we continue to face revenue headwinds, we believe that executing on our plan and growing our audience should result in positive revenue growth over the long term.”