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You are here: Home / Archives for Q4

March 9, 2017 by Adam Fraser Leave a Comment

Twitter Q4 results continue sideways trend

By Adam Fraser

Twitter has delivered its Q4 results, as always eagerly awaited and much analysed.

The key user trends are creeping up but overall the best you can probably say is that they have at least arrested their decline. Far too early to call a turnaround for a business that has never made a profit, The stock market remained unimpressed. The business has substantial cash in the bank but at some point needs to work out how to turn a profit.

If you want to dive into all of the detail, you can check the financials, investor presentation, shareholder letter and investor conference call. If you want the key highlights here are 10 key takeaways:

  1. Monthly active user (MAU) numbers grew slightly to 319m from v 317m last quarter (up 0.8%) and 306m a year ago (4.6% growth); the steady growth is encouraging but the pace remains insignificant compared to other social networks – Facebook continues to grow in the tens of millions while Twitter crawls in single digits
  2. 21% of Twitter’s MAUs (67m) are based in the USA; user numbers in the USA are broadly flat with the user growth coming internationally
  3. Attempts to drive greater engagement and more regular usage on the platform are working, with Daily Active Users growing at 11% on prior year v 7% last quarter and 5% in Q2
  4. Mobile MAUs were 83% of users, indicating Twitter sits in between Facebook ( 90%+ mobile users) and LinkedIn (approx 60% mobile users) for mobile penetration; note mobile products drove 89% of total ad revenue
  5. Revenue at $717m was 16% up on the prior quarter of US$616m and 1% higher than a year ago; ad revenue actually declined on a year ago, with data licensing income increasing
  6. The breakdown of revenue for the quarter was broadly consistent with recent periods, with 89% of revenue coming from advertising and 11% coming from data licensing/other (the ‘big data’ aspect has huge potential for Twitter). Video ads are the most popular and effective form of ads on the platform
  7. Tweet impressions and time spent on Twitter remained strong, each increasing by double digits on a year-over-year basis in the fourth quarter.
  8. Twitter made a loss of US$167m for the quarter but also discloses “adjusted EBITDA  which showed a profit of US$215m after adjusting for stock based compensation, depreciation and amortisation  Twitter ended the quarter with US$3.8bn in cash.
  9. In the fourth quarter, Twitter streamed more than 600 hours of live premium video from content partners across roughly 400 events, attracting 31 million unique viewers in its first full quarter of operations. Of these hours, 52% were sports, 38% were news and politics, and 10% were entertainment.
  10. The key strategic areas of focus in 2017 were identified as product changes to make Twitter safer, investing in core use case and product areas such as live streaming video, among others, simplifying and differentiating revenue products to drive sustainable long-term revenue growth and focusing on making progress toward GAAP profitability.

“2016 was a transformative year as we reset and focused on why people use Twitter: it’s the fastest way to see what’s happening and what everyone’s talking about,” said Jack Dorsey, Twitter’s CEO.

There is no question Jack as CEO has had a positive impact on the Twitter business. The shareholder letter shows a greater willingness towards transparency and the strategic focus is undoubtedly tighter. But Twitter was asleep at the wheel for some time as newer platforms such as Instagram and Snapchat stole its thunder. It still seems to be a great business utility seeking a sustainable commercial business model, and remains vulnerable to takeover at current stock market pricing.

Filed Under: Adam blog Tagged With: Adam Fraser, Adam Fraser blog, blog, Echojunction, Q4, social media, social media marketing, Twitter

March 2, 2017 by Adam Fraser Leave a Comment

10 takeaways from Facebook Q4 results

By Adam Fraser

The blogger challenge – how to find a different way to describe another sensational quarterly set of results from Facebook, which the market responded favourably to.

If you want to dive into detail, you can find the detailed financial, investor presentation and management conference call. For those without the time to digest all of this, here are 10 key soundbites from the results:

  1. Monthly active users have reached 1.86bn from 1.78bn last quarter (4.0% growth) and 1.59bn a year earlier (16.9% growth)
  2. Daily active users hit 1.23bn from 1.18bn last quarter (4.1% growth) and 1.04bn a year earlier (18.2% growth)
  3. Around 93.5% of MAUs and DAUs accessed Facebook via a mobile appliance with 62% of MAUs exclusively using a mobile (mobile has become so dominant Facebook announced on the earnings call they would no longer separate this analysis out)
  4. Mobile DAUs approached the 1.15bn level and Instagram now has over 600m monthly users (in impressive 400m logging in daily)
  5. Video continues to increase in importance as a medium. On the investor call Mark Zuckerberg stated he saw “video as a mega trend, the same order as mobile”
  6. Total revenue was $8.8bn (exceeding market expectations) versus $7.0bn in Q3 (a massive 25.4% increase) and $5.8bn a year earlier (50.8% growth) – generating a net profit of $3.6bn
  7. Facebook has reasonably balanced global spread with around 50% of revenue coming from USA and Canada, and growth coming reasonably consistently across the globe
  8. Average revenue per user spiked significantly by over 20% in one quarter, hitting $4.83 from $4.01 last quarter and $3.73 a year ago; a big (positive) issue for the market analysts
  9. Facebook ended the quarter with a cool $29bn in cash – enough to buy Twitter approximately two and a half times
  10. Some interesting random stats: Instagram stories has 150m users – approaching the size of Snapchat; 50 billion messages are sent through WhatsApp every day; 400m people use voice and video chat on Messenger; NYE 2016 was the biggest Facebook Live moment to date; WhatsApp has hit 1.2bn monthly users

“Our mission to connect the world is more important now than ever,” said Mark Zuckerberg, Facebook founder and CEO. “Our business did well in 2016, but we have a lot of work ahead to help bring people together.”

In terms of future growth, there is no question Facebook is looking to AR and VR as key technologies. Somewhat ominously for the competition  Zuckerberg said “We’re still early in our 10-year plan for virtual reality, but we’ve made some good progress”

Another incredible set of quarterly results.

Filed Under: Adam blog Tagged With: Adam Fraser, Adam Fraser blog, blog, Echojunction, facebook, Q4, social media

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