Twitter sees jump in revenues after increase in advertising
Shares slide on warning of 20% jump in costs to address abuse on platform
Social media gorup Twitter beat Wall Street’s expectations to report a jump in revenues. Photograph: Dado Ruvic/Reuters
Twitter shares fell close to 10 per cent on Thursday after the company said it would have to spend more to improve “health, conversation, revenue product and sales, and platform” this year.
The company beat Wall Street’s expectations to report a jump in revenues after a series of changes designed to attract advertising dollars from Google and Facebook paid off for the smaller social network.
But investors baulked at guidance that operating expenses would increase 20 per cent in 2019 as the company is forced to splash out after controversies over misinformation, online abuse, hate speech and freedom of speech.
Twitter on Thursday reported revenues that rose 26 per cent to $909 million (€801 million) in the fourth quarter, excluding currency effects.
The results followed upbeat performances from Snap and Facebook in the run-up to Christmas, which largely shrugged off last year’s controversies to report better than expected user and advertising figures.
Jack Dorsey, founder and chief executive, said users had embraced changes to the platform: “We enter this year confident that we will continue to deliver strong performance by focusing on making Twitter a healthier and more conversational service.”
Social networks have faced an exceptionally difficult year in which a catalogue of scandals have forced the companies to take more responsibility for content amid fears of the impact on advertising revenues.
For Twitter, the controversies have not yet had an impact on advertising sales, which comprise the bulk of its revenues. Advertising sales grew 25 per cent to $791 million in the three months to December 31st.
Twitter’s $255 million in net income in the fourth quarter brought to a close the company’s first full-year of profitability.
However it continued to struggle with user numbers, reporting its third consecutive quarterly drop in monthly active users to 321 million.
Shares were trading at $30.82, down 9.77 per cent, on Thursday evening. – Copyright The Financial Times Limited 2019