Twitter shares have risen strongly after the microblogging service reported better-than-expected user growth. The market greeted the results despite a fall of close to 8 per cent in revenue due to a drop in advertising,
Despite stiff competition from Facebook and Snap, Twitter's monthly active users, one of the most closely watched metrics for analysts, increased 6 per cent, or 18 million, to 328 million in the first quarter from a year earlier. Analysts on average had expected 321.3 million monthly active users.
Twitter also said daily active users rose 14 per cent in the first quarter from a year ago. Twitter does not disclose the number of total daily active users.
“Twitter is becoming more relevant to consumers. They are making their products easier to use. And there is a global thirst for news and information that they are benefiting from,” said BTIG analyst Richard Greenfield. “We believe usage will drive meaningful revenue and profit growth in the next few years.”
Twitter’s revenue, however, fell 7.8 per cent to $548.3 million (€503.6m) in the first quarter, its first drop since its initial public offering. Net loss narrowed to $61.6 million (€56.9m), or 9 cent per share, in the first quarter ended March 31st, from $79.7 million (€73.2m), or 12 cent per share, a year earlier. The company earned 11 cent per share, beating the estimate of 1 cent per share.
Twitter’s user growth has stalled in the past few quarters. and the company has been trying to convince advertisers that it will strengthen its user base. As part of its efforts the company has updated its product offerings, including live video broadcasts from its app, and launched new features to attract users.
Twitter’s weak performance has raised questions about chief executive Jack Dorsey’s leadership, and whether the company would be bought by a bigger media firm. Financial markets speculated about a sale of Twitter last year, but no concrete bids were forthcoming.
Twitter’s advertising revenue fell 11 per cent to $474 million (€435.4m) in the quarter, above the average analyst estimate of $442.7 million (€406.6m), according to market research firm FactSet StreetAccount. – Reuters