Twitter user growth drops even as revenue rises
Twitter’s Q2 revenue rose by 61 per cent year-over-year as it reached USD 502 million, above the previously forecast range of $470 million to $485 million.
The social media platform’s user growth has slowed in this quarter. The monthly average users were 304 million for the second quarter, compared to 302 million in the previous quarter.
“We’ve been very successful at monetisation, with a strong Q2, delivering over $500 million in revenue and more than $120 million in EBITDA. However, product initiatives we’ve mentioned in previous earnings calls like instant timelines and logged out experiences have not yet had meaningful impact on growing our audience or participation. This is unacceptable and we’re not happy about it,” said Jack Dorsey, interim CEO of Twitter.
Mobile MAUs represented approximately 80 per cent of total monthly active users. Advertising revenue totaled $452 million, an increase of 63 per cent year-over-year. Mobile advertising revenue was 88 per cent of total advertising revenue.
Anthony Noto, CFO, Twitter said that the ad revenue was driven by strong demand as well as growth in Twitter’s advertiser base which accelerated year-over-year. “From an advertising products perspective, year-over-year growth was driven by Promoted Tweets and specifically Promoted Tweet features such as video, mobile app downloads and website cards,” Mr Noto added.
By channel, SMB was the fastest-growing channel on a year-over-year basis driven by growth and new customers for Twitter.
“Our Q2 results show good progress in monetisation, but we are not satisfied with our growth in audience. In order to realise Twitter’s full potential, we must improve in three key areas: ensure more disciplined execution, simplify our service to deliver Twitter’s value faster, and better communicate that value,” Mr Dorsey said.
