Twitter reports $1bn in quarterly revenues for the first time – but long-term health remains key
Twitter has reported quarterly revenue figures north of $1 billion for the first time, with 152 million ‘monetisable daily active users’ (mDAUs) representing a 20% hike year over year.
Total revenues for 2019 were at $3.46 billion, an increase of 14% year on year. Of the quarterly figure, 88% of revenues were derived from advertising, with data licensing and other revenues contributing the rest. US revenue comprised just under three-fifths (59%) of total revenues.
Speaking to analysts following the earnings announcement, CEO Jack Dorsey noted more than half the rise in mDAUs – those users who can be targeted by advertising – came about through direct improvements to the core Twitter product.
Dorsey noted four areas of improvement for the social network going forward: shipping new products and features more quickly; combating misinformation and disinformation through ‘healthy public conversation’; improving the durability of revenue; and distributing its workforce globally.
In the most recent quarter, Twitter announced it would ban all political advertising, noting that the reach of political ads “should be earned, not bought”. Earlier this week, the company said it would crack down on deepfakes, alongside other media which it was believed was ‘significantly and deceptively altered or fabricated.’
“These four priorities will guide us for the next few years, and you should expect to see the results in our numbers,” said Dorsey. “We’ve overcome so many challenges over the past years. We’ve shown resilience in all the lows and highs, boldness in our stances and openness as we work to help public conversation in a way that benefits all, not just Twitter.”
The situation reflects a stronger quarter than Q3, where lower revenues were reported based on issues including bugs in its mobile app advertising. While the figures released this week were of more comfort, industry watchers argue the social behemoth is not entirely cured of its ills.
“What’s really interesting to consider is [Twitter’s] long-term future, rather than these short-term results,” said Tamara Littleton, CEO and founder of social media agency The Social Element. Citing the banning of misinformation and disinformation, Littleton added: “The platform will only be truly valuable if it can drown out fake news to a higher degree, allowing individuals to use the platform the way it should be: as a way to connect to the world in a human way.”
In its letter to shareholders, Twitter noted the steps which had been taken with regards to limiting unhealthy tweets. Noting content related to the upcoming US elections, the company said it saw a 27% decline in ‘bystander reports’ for tweets that violated the company’s terms of service.
One analyst question focused on the 2020 summer Olympics, another major event with wide-ranging coverage. Ned Segal, Twitter chief financial officer, said a vast feature set had been developed in the four years since the previous Olympics, including event-specific timelines and greater usage of real-time video.
Kris Tait, managing director of digital marketing agency Croud, noted that with the Olympics and US elections, 2020 promised to be a ‘huge year’ for Twitter – and the company needed to prioritise greater transparency and health to ensure it was so.
“Twitter will have to continue to rebuild its reputation to stay in favour, striking the difficult balance of remaining at the heart of popular culture conversation, enabling opinion sharing without overstepping the mark,” said Tait.
“If advertisers can see that Twitter is a platform with integrity, and that its users therefore hold it in higher regard, the revenues will correct themselves and Twitter will be a force to be reckoned with,” added Littleton.
You can read Twitter’s full earnings report for Q419 here.
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