NEW YORK (Reuters) – Twitter Inc on Tuesday posted better-than-expected quarterly sales and a surprise increase in monthly active users, shows the efforts of the police on spam accounts, and abusive posts were to help attract more users and advertising dollars.
FILE PHOTO: A 3D-printed logo of Twitter is seen in this photo illustration created in Zenica, Bosnia and Herzegovina on 26 January 2016. REUTERS/dado Ruvic/Image/File Photo
Twitter shares rose more than 8 percent in premarket trade.
As Facebook Inc., Twitter is under pressure from lawmakers over privacy concerns and the political influence of the activity on the service. Twitter’s clean-up included the removal of thousands of spam and suspicious accounts, that they had the debt for consecutive declines in monthly active users in the past quarters.
Advertisers have welcomed that move, but the company still faces a wider backlash against social media.
The AMERICAN President Donald Trump, a frequent tweeter with one of the most followed accounts, on Tuesday called for the establishment of “more, more, and more honourable is” social media companies in response to discrimination he said he faced a Republican from Twitter, without the presentation of the evidence.
“We maintain the Twitter Rules dispassionately and equally for all users, regardless of their background or political belief,” a Twitter representative said. “We are constantly working to improve our systems and will remain, transparent in our efforts.”
It was the company in the last quarter of the reveal of its monthly active users (MAU) count, and Twitter from now on will only take care of the “monetizable” daily active users, made to measure of people exposed to advertisement on a daily basis.
Analysts were encouraged by signs Twitter had turned a corner in terms of monthly user growth, and better, attractive for advertisers, but said that the new user is given could make comparisons between Twitter and social media rivals more difficult.
“It looks like Twitter is on the way to sustainable revenue growth and accelerated earnings expansion, driven by improvements to the user experience and tools enable direct response and search advertising,” said analyst Michael Pachter at Wedbush Securities.
“But the people are not impressed with a composed metric and their unwillingness to give us the actual users. I don’t think the stock can get out of its own way to clean them, and report the same data everyone else does.”
The company also forecast revenue for the coming quarter largely below analyst estimates, and said it would have to continue to spend heavily on clean-up of Twitter and new ad products and other improvements.
The company’s quarterly MAU count has increased by 9 million to reach eur 330 million from the previous quarter, while analysts on average had expected 318.8 million, to a loss of 2.2 million users, according to the IBES data of Refinitiv.
Monetizable daily active users, or mDAU increased to 134 million euros in the first quarter, an increase of 12 percent compared to a year ago, Twitter said.
For the first quarter of 2019, Twitter’s revenue increased by 18 percent compared to a year ago to $787 million, topping Wall Street expectations of $776.1 million.
The turnover was boosted by the sale of ads that also jumped 18 percent to $679 million. In the United States, the advertising revenues increased by 26 percent year-on-year, thanks to the video-ads.
Twitter forecast current-quarter revenue largely below Wall Street targets. The company expects revenue of between $770 million and $830 million, compared with $819.5 million estimated by analysts polled by Refinitiv.
The total operating expenses (including the cost of sales increased by 18 percent to $693 million from the first quarter a year ago.
The company stressed that the operational costs increase by about 20% in 2019 in support of the expenditure it had earlier this year.
Twitter reported quarterly earnings of $191 million, or 25 cents per share, compared with $61 million, or 8 cents per share, a year earlier. With the exception of a $124.4 million tax benefit, the company earned 9 cents per share.
Reporting by Angela Moon; Editing by Lisa Shumaker, Bernard Orr and Meredith Mazzilli