Growth in number of users boosts Twitter revenue by a fifth
Twitter’s revenue rose by almost a fifth year on year, the company reported on Friday, leading to “better-than-expected profitability” of $76m (£61m) in the second quarter of 2019, although this was down from $80m in the same period last year.
The results were boosted by strength in US advertising revenue, which was up by 24% overall, in part due to growth in “monetisable daily active users”, which reached 139 million people, up 14% year on year.
Twitter said user growth was proof that tweaks to the user experience were paying off. They include increasing the amount of content added to users’ timelines algorithmically, and making it easier for power users to create and use lists of accounts to follow.
“We believe that making it easier for people to find what they are looking for when they come to Twitter, organising around topics and events, and making it easier to follow and join conversations will drive more people to enjoy Twitter every day,” it tweeted.
Analysts agreed. “Twitter’s value proposition to advertisers is not the size of its audience, but the engagement of its users,” said Jasmine Enberg, a senior analyst at eMarketer, which reports on the advertising industry.
“The strong growth in monetisable daily active users shows that Twitter users are sticking with the platform, and that should resonate with advertisers. Next quarter’s earnings will show whether Twitter can keep up the growth momentum amidst negative user feedback over the website redesign rolled out in July.”
This is the second quarter that Twitter has focused on “monetisable” DAUs, a distinction it introduced in February to focus attention on the human users of the site who are served adverts and produce revenue. The company had previously announced 330 million DAUs.
Yuval Ben-Itzhak, chief executive of influencer marketing firm Socialbakers, said the new metric “might add a better view on the business’s health. The question is who are the remaining 200m DAUs – are they bots? – and what does that mean about the value of the business for investors and scale of engagements for brands?”
The company’s share price was up 6% in pre-market trades after the results.