Published: Fri, February 08, 2019
Finance | By Loren Pratt

Twitter beats Q4 profit estimates but active users decline

Twitter beats Q4 profit estimates but active users decline

In its earnings report, Twitter said it plans to stop disclosing the monthly active user number after the first quarter of this year in favor of a newly introduced figure on "monetizable" daily active users.

For comparison, Snap Inc. said 186 million people used the Snapchat app daily in the fourth quarter.

Shares fell sharply on Thursday, falling 9.8 percent to close at $30.80.

Twitter posted fourth-quarter earnings of $255 million, or 33 cents per share, in the October-December quarter.

"Video was more than half of ad revenue for Q4 and for 2018", Twitter said in a statement.

In the previous year, Twitter has focused on safeguarding the service amid scrutiny of its role in spreading fake news and election meddling as well as the broader data privacy backlash hitting the tech industry. It's possible the company chose to do so because the daily active user number went up year over year while the number of monthly users went down. Twitter stock was down more than 10 percent in midday trading.

Dorsey chatted with investors on Thursday to champion the platform as one of the best places to engage in unique conversations: "You can't find the conversation on Twitter anywhere else", he said.

Twitter has been ramping up efforts to reduce abuse on its platform and root out fake accounts and election malfeasance, issues that have crimped user growth in a competitive digital-advertising market.

Dorsey said the platform is a hub for following people's interests, but acknowledged it can be hard for users to engage in conversations and, for first-time users, to find accounts that share their interests.

The switch to a monetisable daily user count enables Twitter to put a more positive spin on how it's doing, but even there, Twitter gives off the impression that it's trying to paint a slightly rosier picture than reality - at least when it comes to the competition.

Facebook reported $16.6 billion in ad sales in the fourth quarter a year ago and Snapchat $390 million.

Twitter defines monetizable daily active usage or users (mDAU) as Twitter users who logged in or were otherwise authenticated and accessed Twitter on any given day through or Twitter applications that are able to show ads.

For the current quarter, Twitter said it expected total revenue to be between $715 million and $775 million.

Investors appear to be concerned that Twitter is seemingly expecting a slightly less successful 2019.

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