Twitter Reports Better-Than-Expected First Quarter Earnings Results

The Twitter application is seen on a phone screen
The Twitter application is seen on a phone screen August 3, 2017. (Photo: REUTERS/Thomas White)

During its latest earnings report, social networking giant Twitter reported better-than-expected numbers for the first quarter of this year. The social media firm revealed that it had earned revenues of around US$787 million in the first quarter, a significant 18 percent jump when compared to the same quarter last year. The company also reported a net income of US$191 million for the period, resulting in earnings per share of US$0.25.

The company's strong performance was better than what analysts had initially predicted. The average expectations for the company's revenues were about US$775 million, ranging from US$742 to US$815 million. The company itself had previously expected lower numbers for the first quarter, given a possible increase in operating expenses. Following its report, share prices went up by as much as 7.15 percent.

According to the company, given its stable performance, it will now be focusing more on improving its actual product moving forward. Twitter acknowledged that it had two main weak points, namely the platform's usability during increased activity and content management surrounding fake news and misinformation.

To tackle the first problem, the company has launched an experimental new app called Twttr. The app is basically a tweaked version of the main app that is easier to read with a simplified interface. Twitter hopes to solve the second issue with the addition of more rules to the platform that will hopefully remove a significant amount of unwanted content.

While Twitter tackles these problems, analysts have pointed out that the company still struggles in one important metric; its monthly active users (MAUs). The company has so far been trying to remove this metric from its reports, replacing it instead with a metric called "monetizable daily active users."

The company's MAUs for the first quarter of this year has dropped by more than 6 million users when compared to the same quarter last year. In its report, the company revealed that it had about 330 MAUs for the quarter. Meanwhile, Twitter boasted that it actually increased its monetizable daily active users for the quarter by 11 percent or around 134 million users.

Twitter argues that using monetizable daily active users as a metric makes more sense it gives a more accurate representation of their performance. MAUs, on the other hand, will only give a rough estimate, especially considering that a lot of its users aren't really making it any money. Monetizable daily active users abroad are significantly lower when compared to monetizable daily active users in the United States. Despite the figures presented, critics are still claiming that Twitter's user growth may be stagnating and that the removal of MAUs is a clear sign that it wants to hide that fact.

© 2019 Business Times All rights reserved. Do not reproduce without permission.
Sign Up for Newsletters and Alerts