Washington Post - With the United States
political class glued to their Twitter feeds - or just one Twitter feed in
particular - it should be a great time for the social network in the US of A.
But after getting an
election bump last quarter that many analysts tied to President Trump, the
social network is actually losing American users, according to its monthly
active user numbers. Twitter reported that it had an average of 68 million
monthly active users in the United States this past quarter, down from 70
million in the previous quarter.
Overall, Twitter just isn't
growing as much as investors would like to see. That's the main takeaway from
the social network's latest quarterly earnings report in which the company
reported the same number of users worldwide as it had three months ago.
undefinedTwitter's stock closed down
14 percent to $16.84 a share. Twitter executives,
including chief executive Jack Dorsey and chief financial officer Anthony Noto,
brushed off concern about user growth during an earnings call. The two
executives said that the firm is most interested in its number of daily active
users, an emphasis the company has made in its past couple of earnings reports,
but which deviates from the monthly tallies it and most other social networks
have traditionally used to look at users.
Twitter said that daily
active users offer a more detailed picture of how people use its site. Looking
at that metric, Twitter grew 9 percent in the United States, Noto said, adding
that the company continues to see "stable growth rates."
Although the company didn't
offer hard numbers, Twitter reported that its daily active user growth overall was
up 12 percent over the same period last year, but down 14 percent from the
previous quarter. The company suggested that the flat growth was due to
"seasonal" effects, but it didn't elaborate on what that meant.
"Taken at face value,
we're not overly concerned by this trend, as we have always believed Twitter to
be a niche platform," said Pivotal Research analyst Brian Wieser in a note
published after the earnings report. "We consider its user base to have
plateaued," he added.
Twitter has touted growth as
an important factor for the firm in the past, and continues to do so. The
company has long associated user growth with a path to revenue growth,
particularly as it tries to gain its footing in the digital advertising space.
User growth has never been as fast as analysts would have liked, and slowed
significantly in the past year or so. That has drawn criticism from analysts
who say that Twitter isn't doing enough to draw and retain users outside its
most dedicated audiences.
Analysts had also worried
about stagnating user growth for Facebook as well, but the network still
managed to grow its daily active users to 1.32 billion daily active users - up
from 1.28 billion the previous quarter.
Read also: SEC quizzed Twitter about user growth
There were some bright
spots, however, in Twitter's earnings. The company reported
stronger-than-expected revenue of $574 million. Analysts had projected $568
million. Earnings per share also exceeded expectations, coming in at 12 cents
per share vs. a projected 5 cents per share.
Advertising revenue,
however, also continued to fall, down 8 percent from the same period last year
to $489 million. That's despite engagement with ads - the amount people view or
click on them - growing 95 percent.
But analysts note that users
will likely see Twitter experiment even more with video ads and other formats
in pursuit of one that can take hold on the network.