Wednesday, 24 April, 2019

Twitter Monthly Active Users Drop to 321 Million, Video Ad Sales Surge

Twitter shares fall amid concern over falling user numbers Twitter says abuse reports have fallen by 16 percent
Ginger Lawrence | 08 February, 2019, 18:12

Shares moved lower in the premarket as the company's first-quarter revenue outlook is lower than Wall Street forecasts. The midpoint of that range was below analysts' average estimate of $765 million, according to IBES data from Refinitiv. So, where does that it leave Twitter in increasing DAUs from a shrinking pool, points out R.W. Baird analyst Colin Sebastian, who has a Neutral rating and $35 price target on Twitter shares.

It's likely that Twitter is revealing this new metric now to give investors a better idea of the company's growth.

Average monetizable daily active users - a new metric the company will report instead of daily active users - in the quarter rose 9 percent from a year ago to 126 million.

Monthly active users totaled 321 million in the fourth quarter, in line with analysts' forecasts but down from 330 million a year earlier and 326 million in the third quarter.

By region, average U.S. MAU in the quarter was down 3 percent from previous year to 66 million.

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"Our [monetizable daily active users] are not comparable to current disclosures from other companies, many of whom share a more expansive metric that includes people who are not seeing ads", Twitter said in a letter to investors. And it seems that's why the company made a decision to stop reporting that number altogether starting in the second quarter of 2019. In 2017, Twitter posted a $108m loss. The company in 2018 marked its first full year of profitability under generally accepted accounted principles. One of the company's main goals has been to clean up the conversation and deter harassment, which has been considered a drag on the service's ability to grow users.

"2018 is proof that our long-term strategy is working". "We enter this year confident that we will continue to deliver strong performance by focusing on making Twitter a healthier and more conversational service". Twitter's revenue for the holiday quarter jumped 24% to $909 million.

Twitter has made its first annual profit in its 13-year history but another fall in the number of its users and a disappointing sales forecast took the gloss off the results and sent its shares down almost 10 per cent. The company said costs grew primarily because of hiring and expenses related to video content and infrastructure. During the fourth quarter of 2018, Twitter announced that 126 million monetizable Daily Active Users visited the site on average each day.

The company said it saw an increase in daily users who log in to Twitter on a mobile device vs. those who use only desktop computers.

That compares to Facebook's 1.5 billion daily users and Snapchat's 186 million. It makes about 90 per cent of its money from digital advertising.