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Twitter Losses Increase, Revenue Growth Slows, And Trump Can't Change That

Tyrone Stewart

Twitter logo IRL office HQTwitter has posted its fourth quarter results reporting continued quarterly losses and almost stagnant revenue growth – despite the influence of President Donald Trump on the platform during the quarter.

The company reported overall net losses of $167m for Q4 2016 – up from $90m year-on-year (YoY) – while revenues only saw a one per cent increase YoY, from $710m in Q4 2015 to $717m for the same time last year.

Advertising revenue totalled $638m – down on the year prior – and mobile advertising accounted for 89 per cent of this. Meanwhile, data licensing and other revenue amounted to $79m, a 14 per cent increase YoY.

US revenue came in at $440m, a five per cent decreased compared to Q4 2015, while the rest of the world accounted for $277m – a 12 per cent increase. Total advertising was reported to have increased by 151 per cent YoY.

“Revenue growth will continue to lag audience growth due to the sales cycle, and could be further impacted by the escalating competition for digital advertising spending and our efforts to re-evaluate our revenue product feature portfolio,” said Anthony Noto, Twitter’s COO. “We will continue to increase the value we provide advertisers by simplifying and differentiating the portfolio and improving the engagement and measurement of our products. We are confident that this path will return us to long-term revenue growth.”

The quarter saw a four per cent increase YoY for average monthly active users – up from 317m to 319m – even with the Trump’s Twitter antics. Daily active usage did, however, grow 11 per cent YoY, and Twitter also reported a double digit increase in both Tweet impressions and time spent on Twitter.

“We overcame the toughest challenge for any consumer service at scale by reversing declining audience trends and re-accelerating usage. As a result, in the fourth quarter, daily active usage accelerated for the third consecutive quarter, and we see this strong growth continuing,” said Jack Dorsey, Twitter’s CEO. “While revenue growth continues to lag audience growth, we are applying the same focused approach that drove audience growth to our revenue product portfolio, focusing on our strengths and the real-time nature of our service. This will take time, but we’re moving fast to show results.”

Twitter expects to report adjusted earnings before interest, tax, depreciation and amortisation (EBITDA), of between $75 and $95m for Q1 2017 – with an adjusted EBITDA margin of between 17 and 17.5 per cent.