Subscribe to MarTech Today to receive news and insights of where marketing, technology, and management converge.

Note: By submitting this form, you agree to Third Door Media's terms. We respect your privacy.

Twitter beats revenue expectations but tanks on flat user growth

Monthly users were flat but daily active user numbers were up 11 percent.

Greg Sterling on July 27, 2018 at 6:02 pm

Earlier this week Facebook suffered a massive selloff after reporting lackluster user growth. Twitter just suffered a similar fate, losing about 20 percent of its value, as investors were spooked by flat-to-declining user numbers.

Announcing Q2 results, the company reported slightly better than expected revenues of $711 million and mostly in-line earnings of $0.17 per share. However, a focal point for investors, it also reported a modest decline in monthly users. It’s also possible that Facebook’s disappointing quarter, from an investor expectations perspective, compounded the negative reaction to Twitter’s earnings.

Ad revenue for the quarter was $601 million, representing growth of 23 percent over last year. About $293 million of that came from the US market.

Monthly active users were 335 million compared with a Wall Street expectation of 338.5 million. The company also said it purged roughly 70 million accounts that were not active for at least 30 days. However daily active users grew 11 percent. The company sought to emphasize that metric on the earnings call.

CFO Ned Segal also said that Twitter lost roughly three million monthly users from a combination of user purges, non renewal of some text-messaging contracts and GDPR related issues.

Removal of fake accounts, which recently happened, was not reflected in the Q2 numbers. That means user counts could further decline next quarter. Q3 guidance was also weaker than what investors were expecting.

About The Author

Greg Sterling

Greg Sterling is a Contributing Editor at Search Engine Land. He writes a personal blog, Screenwerk, about connecting the dots between digital media and real-world consumer behavior. He is also VP of Strategy and Insights for the Local Search Association. Follow him on Twitter or find him at Google+.