Skip to main content

Twitter: User base still flat, but ad revenue up 48 percent year-over-year

Twitter Founder
Twitter CEO Jack Dorsey. Image used with permission by copyright holder
Twitter reported it had 320 million users in the fourth quarter, flat with the previous quarter but up 9 percent year-over-year. Analysts projected a report of 325 million, so the news sent shares downward in after-market trading, USA Today reports (Twitter’s shareholder letter). Monthly active users were 305 million, up 6 percent year-over-year but a decline from 307 million in the previous quarter. At the close of trading on Wednesday afternoon, Twitter had been up 4 percent to $14.98.

Twitter’s user base has been stagnant and its stock has taken a beating for it; shares have fallen 6 percent in the last quarter, closing at an all-time low on February 9 — according to MarketWatch. Despite the disappointing news for stockholders, who had been hoping for an increase in users, Twitter’s ad business performed well. It generated $710 million in revenue, a 48 percent year-over-year increase; revenue would have been 53 percent if excluding impact of foreign exchange rates. Twitter earned 13 cents a share, beating analysts’ estimate of 12 cents. Factoring in expenses, Twitter lost 16 cents a share, shy of the 17 cents analysts predicted.

“Not being able to add any new active users in the last quarter will disappoint some, particularly investors, yet it did see active advertisers go up by almost 90 percent year on year,” says Sotirios Paroutis, an associate professor of Strategic Management at Warwick Business School, at the University of Warwick in the U.K.

While Wall Street may not have liked the news, CEO Jack Dorsey and the executive team tried to sound upbeat during the conference, saying that it had a good Q4, despite the last quarter generally being the weakest. Dorsey says he has spent the past six months developing a stronger point of view of what Twitter is and what it wants to be, and that’s the notion of being “live,” whether it’s live commentary, live conversations, or live connections in breaking news, entertainment, sports, or everyday topics.

“Twitter is always considered a second screen, and we believe we can become the first screen for what’s happening right now,” Dorsey says. “We really want to focus on ‘live’ because it’s the fastest and easiest way to understand Twitter and get into it.”

To strengthen Twitter around “live,” Dorsey says the company will “refine our core service [i.e., timeline]; add live-streaming video and build off success of Periscope; offer best tools for creators; make it safe for people to express themselves; and help developers build and grow their businesses using Twitter. Dorsey acknowledges that Twitter can be confusing, and that there are “broken windows” that inhibit growth and retention (an example is Twitter’s rules in regards to using @username replies in tweets). He also says he wants to improve machine learning and find ways to get people on faster. On the advertising side, Twitter says it will continue to work on offering ways for brands to create more impact, to both logged-in users and those who aren’t.

“This allows Twitter to connect multiple products when single events happen — making Twitter a more appealing option for advertisers,” Paroutis says. “It also allows them to build a distinctive identity versus other social media offerings.”

According to S&P Global Market Intelligence, analysts expected Twitter to generate $709.97 million in revenue, at 12 cents a share, which the company did beat. Before today’s announcement, the company had $3.5 billion in cash and investments; USA Today says that would last Twitter 412 years if it spent only $8.5 million a year, which is what it did in 2015. Despite rumors of imminent death of the platform, Twitter still has legs, however wobbly.

Ahead of the announcement, Twitter introduced new video ads and a new timeline that’s based on popularity of tweets. During the conference call, Twitter executives pointed to these new features as way to increase growth, as they are part of the company’s new commitment in improving its core experience. With the departure of high-profile executives recently, Dorsey said his No. 1 task in 2016 will be to recruit for key positions that could help Twitter drive growth.

Les Shu
Former Digital Trends Contributor
I am formerly a senior editor at Digital Trends. I bring with me more than a decade of tech and lifestyle journalism…
X CEO reveals video calls are coming to the app formerly known as Twitter
The new X sign replacing the Twitter logo on the company's headquarters in San Francisco.

X, formerly Twitter, is to get video calling as part of ongoing efforts to turn the platform into a so-called “everything app” offering a broad range of services.

X CEO Linda Yaccarino announced the news during an interview with CNBC on Thursday.

Read more
How to download Instagram photos (5 easy ways)
Instagram app running on the Samsung Galaxy Z Flip 5.

Instagram is amazing, and many of us use it as a record of our lives — uploading the best bits of our trips, adventures, and notable moments. But sometimes you can lose the original files of those moments, leaving the Instagram copy as the only available one . While you may be happy to leave it up there, it's a lot more convenient to have another version of it downloaded onto your phone or computer. While downloading directly from Instagram can be tricky, there are ways around it. Here are a few easy ways to download Instagram photos.

Read more
X seems to have deleted years of old Twitter images
The new X sign replacing the Twitter logo on the company's headquarters in San Francisco.

The social media platform formerly known as Twitter and recently rebranded as X appears to be having trouble showing images posted on the site between 2011 and 2014.

The issue came to widespread attention on Saturday when X user Tom Coates noted how the famous selfie posted by Ellen DeGeneres at the Oscars in 2014, which quickly broke the “most retweets” record, was no longer displaying. Later reports suggested the image had been restored, though, at the time of writing, we’re not seeing it.

Read more