Twitter appeared to turn a corner in its battle against slow user growth in Q1, as monthly active users (MAU) increased 6 per cent year-on-year during the period.
The social media company said MAUs of 328 million in the opening three months of 2017 were 9 million higher than the same period of 2016, but conceded there is “still work to be done to translate that into revenue growth.”
Indeed, Twitter’s revenue decreased for the first time since it went public in November 2013.
The company, which is yet to post a profit, saw first quarter revenue of $548 million, down 8 per cent year-over-year, while a GAAP net loss of $62 million was down 23 per cent compared with Q1 2016.
Commenting on the results, CEO Jack Dorsey said: “We’re delivering on our goal to build a service that people love to use, every day, and we’re encouraged by the audience growth momentum we saw in the first quarter.”
“While we continue to face revenue headwinds, we believe that executing on our plan and growing our audience should result in positive revenue growth over the long term,” he added.
The company said the increase in user numbers was driven by organic growth (reflecting some seasonal strength), product improvements (including better relevance in the timeline and notifications), and marketing.
We’re focused on driving value across three key areas of our service: audience, content, and revenue.
Advertising revenue for the quarter was $474 million, a decrease of 11 per cent year-over-year. Despite the decline, Twitter’s COO Anthony Noto was bullish about the company’s value to advertisers: “We believe Twitter is the best place to drive brand perception, and we’re continuing to showcase our unique value proposition for advertisers,” he said.
Noto added the company is happy with the performance of its live streaming feature – in the last quarter alone Twitter streamed more than 800 hours of live premium video and reached 45 million unique viewers.
“We remain focused on our initiatives to grow revenue by simplifying our revenue product portfolio, communicating our progress to advertisers, and re-allocating resources to our highest revenue generating priorities,” he explained.
During the quarter, it also agreed partnerships with companies including Sky Sports, Time, Billboard, IMDb, and Conde Nast.
It also expects data licensing revenue to become an important contributor to revenue growth and profitability over time due to a more brand-centric approach.
Total ad engagements increased 139 per cent year-over-year, driven by a continuing mix shift toward video ad impressions and higher video view rates, which Twitter stated stemmed from product improvements covering video quality optimisation and latency improvement.