Twitter revealed its very first billion-dollar quarter.
James Martin/CNET
Twitter on Thursday published much better than anticipated quarterly income, a rise that comes as the social media network attempts to differentiate itself by prohibiting political advertisements. It was Twitter’s very first billion-dollar quarter.
The business likewise continues to draw in brand-new users. In the 4th quarter, the variety of monetizable day-to-day active users — individuals who log into the website day-to-day and see advertisements — hit 152 million, up almost 21 percent from the 126 million in the very same duration in 2015.
“Q4 was a strong finish to the year,” Twitter CFO Ned Segal stated on a teleconference with Wall Street experts Thursday early morning. The development in day-to-day users, he stated, “was largely driven by product improvement.”
The business’s stock increased more than 15% in early trading Thursday to around $38.50 per share.
Twitter CEO Jack Dorsey indicated work that the business has actually done to make the service more attractive to brand-new users, including its efforts to assist individuals discover and follow subjects they have an interest in. He likewise discussed enhancing the “health” of public discussions — that is, cleaning out bad stars such as bots and giants, consisting of those spreading out false information.
“We believe our work on health is a growth vector for us over the long term and fuels more conversations on Twitter,” Dorsey stated on the call. “Misleading information is probably the biggest challenge facing us and our industry. This will be a key focus for us.”
The executives likewise expected huge occasions this year such as the Summer Olympics and elections worldwide, consisting of a governmental election in the United States. For the Olympics, Segal indicated enhancements in how Twitter utilizes live and saved video, stating Twitter will have “near real-time highlights of the most important events.”
There was one sour note in the fourth-quarter financials: Rising expenses throughout the quarter put a capture on the business’s earnings.
As it looks for to enhance its attract users and drive more development, Twitter prepares to increase its headcount by 20% or more in 2020, particularly in the locations of engineering, item, style and research study. That and other consider turn are most likely to increase expenses and expenditures for the year by around 20%, Twitter stated.
The business likewise will be working this year towards opening a brand-new information center.
Like other social networks websites, Twitter has actually come to grips with false information and disinformation dispersing on its service. Though it’s removed phony accounts, Twitter hasn’t gotten the issue under control. Recently, Twitter users spread out incorrect claims about the coronavirus, along with about electoral scams ahead of Monday’s Iowa caucuses.
Twitter has actually made prominent efforts to attend to these issues. In a series of tweets in 2015, Dorsey stated the business would restriction political advertisements due to the fact that reach “should be earned not bought.” The relocation differentiated Twitter from social networks heavyweight Facebook, which puts practically no limitations on what political leaders can state on its platform. Twitter today doubled down on its efforts to fight false information, stating that in March it will start identifying — and sometimes eliminating — controlled media. The policy covers deepfakes, which are videos that utilize expert system to make it appear like individuals are stating or doing something they didn’t.
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It’s also testing other features that could drive more positive conversations on the site. In November, the company rolled out a tool to hide replies, allowing users to filter out irrelevant, off topic or hurtful remarks. The social network plans to experiment with a new feature that would give people the ability to choose who can reply to their tweets.
In the fourth quarter, Twitter brought in $1.01 billion in revenue, up 10 percent from a year earlier and beating the $996.73 million projected by analysts in a Thomson Reuters survey. For the current quarter, the company expects revenue to reach $825 million to $885 million.
Segal cited Disney Plus as an example of how it served advertisers in the quarter. “We were able to help them with a critical launch,” he said.
The company earned 15 cents per share in the fourth quarter, falling short of expectations of 18 cents per share. Excluding stock-based compensation and other expenses, the company earned 17 cents per share, below projections of 29 cents per share.
That shortfall stemmed in part from a 22% jump in costs during the quarter compared with the same period a year ago.
Dorsey acknowledged Thursday that Twitter still makes users “do a ton of work” to find and follow accounts to fit their interests and that while many people are aware of the service, their knowledge of it is often second-hand.
“A lot of people see tweets every single day. They see them on television, they see them in newspapers. We haven’t given them enough reason yet to come to the app and utilize it themselves,” he said. “Ultimately [getting them on board] will boil down to what individuals experience when they initially download the app or when they initially open Twitter.com.”
Originally released at 4: 19 a.m. PT on Feb. 6.
Updated 7: 25 a.m PT: Adds information from Twitter’s teleconference.
