The Trump Effect? Twitter Use Jumped in Last 3 Months

by Ben Pena April 27, 2017, 2:18

That written, the Wall Street analysts who care about little beyond the company's (lack of) revenue growth found little to assuage their fears, as Twitter's $548 million (all figures USD) quarterly revenue represented an eight per cent decline from past year, while the company's quarterly net loss was $62 million.

On Wednesday, Twitter said the number of monthly active users rose 6 percent during the first quarter year-over-year, compared to the 319 million users from the last quarter of 2016. Average monthly active users reached 328 million, up 6% vs. 4% in the prior quarter, while daily active users jumped 14% compared to the same time previous year. Despite the revenue decline, Twitter's shares shot up more than 11 percent in pre-market trading.

"We continue to expect revenue growth to meaningfully lag audience growth in 2017", the company wrote in a letter to shareholders Wednesday.

Twitter has been seeking to broaden its appeal beyond its core user base of celebrities, politicians and journalists, ramping up efforts in video and live sports, notably. Their prediction: Twitter will see a 14% decline in revenue, from $595 million in Q1 a year ago to $512 million this quarter.

The social messaging app has been trying to improve its user experience and keep people more engaged, a challenge now that the dramatic USA election campaign is over.

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"I think that Trump drives a lot of awareness about Twitter among people who otherwise wouldn't be paying attention", said Michael Pachter, managing director at Wedbush Securities.

Twitter also managed to report earnings (excluding certain expenses) that were much better than expected, making 11 cents a share instead of the one cent most analysts projected.

The company's earnings report for the first quarter of this year provides a boost to the social platform, which has struggled in recent years to attract new users to the service and has been hit by controversies over its handling of online abuse. It also faces competition from Facebook Inc., Instagram and Snap Inc.

User numbers are up, losses are down, but Twitter can't yet make its advertising service work, and that's a problem.

From January to March, the tech firm's sales dropped 8 percent to $548 million, but beat the $509 million in revenue that analysts surveyed by Bloomberg expected.


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