Twitter comeback continues as revenues smash estimates
Monday April 30 2018
Twitter has posted its second profitable quarter in a row, beating Wall Street estimates for revenue and monthly active users, as advertisers in Asia and other markets outside the United States embraced its video ads.
Revenue from the latest quarter was up 21% year over year, and the company expects to be profitable for 2018.
Daily active users (DAU) grew 10% year-over-year while overall monthly user numbers rose 3% to 336 million, just above a forecast of 334 million, sending the company’s shares as much as 10 percent higher.
The company credited making it easier for people to follow topics, interests and events on Twitter as part of the reason why it was able to attract more users.
“We made meaningful progress in our ongoing safety and information quality work in Q1, and we are continuing to invest in improving the quality of content and the overall health of the conversation on Twitter,” the company said in a letter to shareholders.
US President Donald Trump has kept the San Francisco-based service in the headlines domestically but growth has been faster abroad as Twitter has tried to grow its user base and ad business.
International sales accounted for 48% of revenue, growing 53% year-over-year, compared with 2% in the United States. Total revenue rose 21%.
Twitter said it added 5 million people outside the United States and 1 million people inside its home market, compared with the fourth quarter, with the company pointing to strong growth in Asia.
Analysts expected Twitter to be profitable due to increasing advertising revenue, especially due to digital advertising budgets increasing as marketers shift money over from television. The company also showed huge growth in international ad revenue, especially from China and Japan.
Known for its (recently expanded) short messages, Twitter has paid to develop live shows and broadcast live events, using videos to get people to spend more time on the service and to sell video ads to marketers. Videos accounted for more than half of ad revenue in the quarter.
The social media sector is under intense pressure, however, from lawmakers around the globe for inflaming political debates, allowing abusive language and failing to safeguard personal data.