Technology Stocks

Twitter Inc. (NYSE:TWTR) Healthy Discourse Hurt User Growth But Revenue Gains By 24% In Q4 FY2018

Twitter Inc. (NYSE:TWTR) closed its day at $31.12 after gaining 2.40% in the last trading session.

Twitter Inc. (NYSE:TWTR) has announced growth in its quarterly revenue in its first year of full profitability. The robust revenue can be attributed to the company’s efforts of promoting a healthy discourse in the social media platform.

Declining user numbers

Although the healthy discourse has boosted its revenue the company’s’ stock dropped 10% following revelations that its monthly subscribers were declining and the projections of the current quarter. Twitter disclosed the number of its daily Active Users for the first time stating that they had 126 million users which is an increase of 1.6% from the previous quarter.

The figure is comparable with other social media sites such as Facebook with 1.52 billion users and Snap and 186 million. Regarding the low volumes in users, the company implied that their measure of daily users employs a different model than the other companies since for them they only count users who view ads.

Revenue growth

The company registered a 24% revenue increase to $908.8 million in the Q4 FY2018 compared to 2017 when they had $731.6 million because the Q4 is basically the heaviest spending time for most advertisers.

Speaking on how a health discourse has led to growth in revenue, CEO Jack Dorsey indicated that the company has been concentrating on reducing abuse in the platform. He added that although their actions involve closing of user accounts he indicated that more users are using the platform because there is minimal harassment. Mr. Dorsey also said that marketers are supporting the changes because they do not prefer advertising alongside undesirable content.

The CEO told analysts that they want to transform Twitter to be more conversational by minimizing undesirable behavior which will see the company grow.

Projections for the firsts quarter revenue indicate may fall short of the analysts projected $764.93 million. Challenges on how the company can raise its user pool as well as the expected high expenses associated with combating abuse are likely to derail growth. Similarly, the growth of its employees by about 16% will increase operating expenses to 20%.

Leave a Comment

Your email address will not be published.