MM Awards

Twitter sees profit again but, this time, it's adding users

Tyrone Stewart

TwitterTwitter managed to achieve back-to-back profitable quarters, posting a $61m profit in Q1 2018, after turning over its first-ever profit in the last quarter of 2017.

The microblogging site saw a 21 per cent year-over-year (YoY) increase in revenue to $665m in the quarter, helping it achieve this second quarter of profit.  Adjusted EBITDA for quarter was $244m or 37 per cent of total revenue.

This second highly-successful quarter for Twitter also saw its monthly active users grow to 336m – a YoY increase of three per and an increase of 6m compared to the 330m users recorded in both of the two previous quarters. Meanwhile, average daily users grew by 10 per cent from Q1 2017.

“The first quarter was a strong start to the year,” said Jack Dorsey, Twitter CEO. “We grew our audience and engagement, marking another quarter of double digit year-over-year DAU growth, and continued our work to make it easier to follow topics, interests, and events on Twitter.”

Looking ahead, Twitter expects to achieve an adjusted EBITDA of between $245m and $265m at a margin between 37 and 38 per cent for Q2 2018.

Here’s what people within the industry had to say on the results:

Aaron Goldman, CMO at 4C Insights
“Twitter's Q1 earnings remain strong following a solid Q4 performance in which the business turned a profit for the very first time. Reflecting on the tent pole events in Q1 that promote engagement across TV and Twitter – the Winter Games, the Super Bowl, Oscars, Grammys and Brits – it’s not surprising that the company’s performance was so positive. We saw steady growth for brands using 4C to manage their Twitter campaigns in Q1 with spend going up and cost per click going down, which advertisers are getting savvier with their optimisations. We expect the strong results to continue as Twitter innovates to deliver an experience that keeps audiences engaged with updates like threading tweets and new offerings like Video Website Cards.”

Nick Fletcher, vice president at Rakuten Marketing
“We knew Twitter would be moving from strength to strength this quarter. Marketers are becoming more aware of the scale of their audiences at an international level and Twitter has become synonymous as the hub of conversation around major global events. This brand awareness piece is part of an increasingly complex ecosystem of social platforms which serve brands to different extents and for different purposes. While a high-end fashion brand might still plough its advertising budget towards Instagram’s buy buttons, there’s no end to the potential for fast-moving consumer goods brands on Twitter, and recent moves such as doubling the character limit demonstrate the platform’s savviness to the fact.”

Joe Rohrlich, executive vice president and general manager of EMEA at Bazaarvoice
“Twitter has been busy cleaning its ecosystem and it seems the hard work has paid off. In the virtuous position of now being one of the most trusted social platforms, active user figures put Twitter at an advantage in driving further adspend growth in Q2. The area of real interest for brands and retailers should be user generated content. Twitter has done a fantastic job of incorporating more video-oriented content, which brands and retailers can use to build trust and authenticity around products. Given 50 per cent of shopping is now conducted via mobile, the platform can push conversions skywards with further ecommerce integration.”

Yuval Ben-Itzhak, CEO at Socialbakers
“Twitter's Q1 results show that it is still an attractive platform for advertisers and for users.

“Over the last months Twitter has launched some exciting new features, such as the introduction of 280-character tweets and Threads, which have made tweets more expressive. This was a huge step forward for marketers, giving them more room to personalise their message and drive targeted engagement within specific audiences.

“Twitter has also been working hard to incorporate more diverse video ad options and the hard work is paying dividends. To keep moving ahead, Twitter needs to keep focusing on innovating, and bring features that are beneficial to both marketers and users alike.”