Twitter shares fell 7.14 per cent to $31.72 (£24.47) in the pre-market as the company posted fourth-quarter revenues of $908.8m, but said but that operating expenses will be around 20 per cent higher in 2019. The company said it expects revenues of between $715m and $775m in the first quarter of 2019.
Monthly active users (MAUs) fell to 321m, compared to 326m in Q3, and 330m in Q4 2017. Twitter said it will no longer report the number of MAUs going forward. Instead, it will report on the number of monetizable daily active users (DAUs) to show the size of its audience and engagement. These are defined as users that log in and access Twitter on any given day through twitter.com or on Twitter applications that can show ads. advertisements. The company said average monetizable DAUs in Q4 stood at 126m, a 9 per cent year-on-year increase.
Explaining the switch, Twitter said: “We want to provide something valuable to people on Twitter every day, and we believe that monetizable DAU (mDAU), and its related growth, are the best ways to measure our success…Our mDAU 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. We considered changing our disclosure to be comparable to other companies, but our goal was not to disclose the largest daily active user number we could.”
Anthony Capano, managing director EMEA at Rakuten Marketing, says the results are encouraging. “These latest results mark the continuation of a winning streak for Twitter with a fifth straight quarter of GAAP profitability,” Capano said. “The focus on APAC is proving an engine of growth for the platform. Towards the end of 2018, Twitter revealed a host of content partnerships including Bloomberg, Sony Music and NBCUniversal that would bring hundreds of hours of livestreams and other videos to the platform in the Asia-Pacific region.
Plus, as ad-free video platforms such as Netflix continue to grow, marketers throughout western regions will look increasingly to digital video formats that they can be a part of. With Twitter’s total ad engagements surging 50% and cost per engagement sinking 14% throughout Q3, the platform is seeming ever more attractive to advertisers looking for high return on spend. As long as it’s in brand safe environments that have the ability to reach new and global audiences, then why not test?”
And Yuval Ben-Itzhak, CEO of Socialbakers, believes the results are a vindication of Twitter’s efforts to clean up the platform. He said: “Twitter’s Q4 earnings may have met with mixed reactions from the market, but they are a clear sign that the work Twitter has been putting in to cleaning up toxicity in its environment is paying off. Users and advertisers alike have responded well to the steps the platform has taken to remove fake and suspicious accounts - and that should be seen in their numbers going forward.
“The fact that Twitter has decided to report monetisable daily active users is beneficial to advertisers, as its a metric that clearly indicates the platform's audience size and engagement. Twitter needs to remain focused on growing and monetising its user base further, as well as exploring new and engaging formats, like the Stories format that has driven considerable value for Facebook and its family of apps.”