Twitter has given data around its daily user numbers for the first time, as the social network continued its comeback with strong revenue and profit growth at the end of 2018.
The social network said 126 million people logged in once a day and saw adverts in the final three months of 2018.
However, statistics also showed that the number of monthly users fell by five million compared with the same period a year earlier – and currently stand at 321 million.
Twitter said the decline was partly due to its efforts to identify trolls and take down malicious accounts.
It had earlier outlined that video investment and hiring had contributed to a surge in costs over the last quarter – to $704m (£542m)
Other numbers were more positive and beat market expectations.
Revenue growth grew 24% to hit $909m (£700m).
Profits of $255m (£196m) were 180% higher than in October to December 2017.
Wider figures covering 2018 as a whole showed revenue up 25% on the previous 12 months at over $3bn (£2.31bn) for the first time.
Chief executive Jack Dorsey said: “2018 is proof that our long-term strategy is working. Our efforts to improve health have delivered important results, and new product features like a single switch to move between latest and most relevant tweets have been embraced by the people who use Twitter.
“We enter this year confident that we will continue to deliver strong performance by focusing on making Twitter a healthier and more conversational service.”
Analysis
Yuval Ben-Itzhak, CEO of social media marketing company Socialbakers, said that the results are a clear sign that the platform’s clean-up efforts are working – for users and advertisers.
Despite less impressive results than Facebook and Snap this quarter, Yuval adds that the platform is taking the right steps to further grow and monetise its user base, and that investing in new and engaging formats will help Twitter catch up to the competition.
“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,” Ben-Itzhak said. “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.”
Josh Krichefski, CEO at MediaCom, added: “Twitter’s strong Q4 revenue growth comes down to three key things: its commitment to cleaning up the platform; its investment in new media partnerships; and its renewed focus on building more engagement and conversations between users. And the platform is clearly putting quality not quantity at the heart of its future growth plans. Its new measurement strategy is by no means the typical ‘vanity metric’ that we in the industry are used to seeing. Advertisers will now be able to view the number of ‘monetizable’ Daily Active Users (mDAU), which stands in solid opposition with Facebook’s recent announcement that it will be merging its metrics across its “Family” of apps including Whatsapp and Instagram, and no longer reporting on individual Facebook user figures.
“It was interesting to see video ad formats performing strongly and bringing in more than half of the ad revenue for not only Q4 but the entirety of 2018 – with Twitter historically being largely text-based, the appetite is clearly there from audiences who want more interactive, visual content. What the results ultimately show is that 2019 is set to be a crucial year for Twitter, and if it can deliver the innovation, safety and value that it has promised both users and advertisers, we can almost certainly expect to see more positive results from the company.”
Aaron Goldman, CMO, 4C Insights, said: “As breaking news and live events increasingly play out on Twitter, the platform has continued to draw in advertisers. Consumers see Twitter as a place to gather and share information, and brands are using this opportunity to engage with their audiences. Through native streaming deals and second-screening during televised events, Twitter will continue to be a destination for conversation, and this behavior will allow advertisers to continue to propel growth for the platform.”
Anthony Capano, , managing director EMEA at Rakuten Marketing, commented: “These latest results mark the continuation of a winning streak for Twitter with a fifth straight quarter of GAAP profitability. 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?
There’s no overnight success, brands making the most of platforms like Twitter are carrying out thorough research to inform campaigns. Marketing teams focusing on lucrative demographics overseas understand the key opinion leaders, sales days and payment methods that drive quick conversions and build brand loyalty.”
Jasmine Enberg, Senior Analyst at eMarketer, said: “Twitter’s Q4 earnings prove that the company is still able to grow its revenues without increasing its user base. The falloff in monthly active users is likely a continuation of Twitter’s efforts to remove questionable accounts, which is started in Q3. The growth in daily actives is also a positive sign for advertisers, as it means users are still highly engaged on the platform. There’s plenty of room for more growth there as well, with Twitter’s DAUs making up under half of MAUs.”