MWC

Twitter reports its first-ever profit, but user numbers have stalled

Tyrone Stewart

TwitterTwitter posted its first profitable quarter in Q4 2017 but, despite the financial success, it still can’t manage to increase its user base.

The microblogging site reported fourth quarter revenue of $732m, an increase of two per cent year-over-year (YoY), with a net income of $91m. The quarter’s income was a massive improvement on the reported net loss of $167m for the same period in 2016.

This profit comes with a slightly sour taste, however. The social platform’s monthly active user (MAU) has stagnated and remained at 330m for the second consecutive quarter – though it is four per cent up on Q4 2016. In comparison, daily active users (DAUs) grew by 12 per cent in the quarter.

 “Q4 was a strong finish to the year,” said Jack Dorsey, CEO of Twitter. “We returned to revenue growth, achieved our goal of GAAP profitability, increased our shipping cadence, and reached five consecutive quarters of double digit DAU growth. I’m proud of the steady progress we made in 2017, and confident in our path ahead.”

The company has blamed its stagnating user numbers – which breaks down to 68m US MAUs and 262m international MAUs – on a change to the Twitter Safari third-party app integration and its work to remove the number of bots that feature on its platform.

Looking ahead, Twitter expects to achieve an adjusted EBITDA of between $185m and $205m for Q1 2018.

“Twitter's strong quarter is a clear reflection of brands steadily increasing their investment to capitalise on multi-screen marketing,” said Aaron Goldman, CMO at 4C Insights. “Twitter has become the de facto place for the world to react to news, politics, sport, TV, weather and more. As such, it’s a great aperture for brands to deliver timely messages to targeted audiences. We are seeing this momentum carry over into Q1 with major tentpole events like the Golden Globes, GRAMMYs, Super Bowl, Winter Games, and Oscars.”

Nick Fletcher, VP at Rakuten Marketing, added: “This is a momentous occasion for Twitter… The compelling question is whether Twitter’s popularity has been driven by Facebook’s recent moves to restructure the news feed less in favour of advertiser and publisher content. It remains to be seen whether Zuckerberg’s belief that less time on social media will result in a higher quality of engagement, there’s certainly an argument for it, but for now brands are clearly happy with Twitter’s accomplishments in video and live broadcast and see a growing role for the platform in campaigns.”