Twitter’s quarterly revenue up, but user numbers down

Twitter Inc. was once again able to put a positive spin on its latest quarterly results, though investors don’t appear to agree.

In its second-quarter results press release, published Friday, the social media icon emphasized its year-over-year growth in revenue – $711 million (all figures USD), or 24 per cent – and monthly active users – 335 million, compared to 326 million during the same period last year.

Also buried in the release was an acknowledgment that Twitter had shed 1 million users compared to its previous quarter, when it had 336 million, a change the company attributed to “decisions we have made to not move to paid SMS carrier relationships, prioritizing the health of the platform, and, to a lesser extent, GDPR [the European Union’s General Data Protection Regulation]” – and as a result, its value slipped by 15 per cent this morning, according to the Wall Street Journal.

“Our second quarter results reflect the work we’re doing to ensure more people get value from Twitter every day,” Twitter founder and CEO Jack Dorsey said in the release. “We want people to feel safe freely expressing themselves and have launched new tools to address problem behaviors that distort and distract from the public conversation.”

Dorsey also emphasized Twitter’s investment in machine learning algorithms that promote content related to events such as the World Cup, attributing the company’s 11 per cent daily active usage growth to the changes.

Twitter CFO Ned Segal, meanwhile, emphasized that the company was especially pleased with its user growth and ability to deliver results for advertisers.

“We’re maintaining profitability while we make investments in the business, achieving strong revenue growth and introducing product updates that make Twitter both healthier and easier to use,” he said in the July 27 statement. “Looking ahead, we remain optimistic about our ability to execute on our priorities and deliver value for advertisers and shareholders.”

Among the marketing-related metrics Twitter shared:

  • Advertising revenue was $601 million, a year-over-year increase of 23 per cent;
  • Total ad engagements increased 81 per cent year-over-year;
  • Cost per engagement decreased year-over-year by 32 per cent;
  • Data licensing and other revenues added up to $109 million, an increase of 29 per cent year-over-year.

The company also revealed that while U.S. revenue increased by 10 per cent year-over-year, or $367 million, international revenue increased by an impressive 44 per cent year-over-year, or $344 million.

According to the release, the majority of lost users were from the U.S., where the number of monthly active users fell from 69 million last quarter to 68 million. (The number of American users had been 68 million during the same period last year as well).

The average number of international users, meanwhile, was 267 million, the same number as last quarter, though an increase from 258 million during the same period last year.

The stagnated user growth implied by those numbers may also be a reason Twitter’s stock lost value on Friday.

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Eric Emin Wood
Eric Emin Wood
Former editor of turned consultant with public relations firm Porter Novelli. When not writing for the tech industry enjoys photography, movies, travelling, the Oxford comma, and will talk your ear off about animation if you give him an opening.

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