By Adam Fraser
Twitter has delivered its Q4 2017 results and, for the first time in its history, has delivered a profit.
As ever with Twitter, it remains a patchy set of numbers with the most obvious negative the flat user numbers at 330m. Despite getting unprecedented levels of earned media via the President of the USA, the numbers continue to indicate that anyone on the planet who wants to be on Twitter is already there. The continuing growth in users at Facebook, Instagram and WhatsApp must be a source of huge frustration to the board and management of Twitter.
The headline profit clearly impressed the market, with the share price rallying 25% on the day of the announcement.
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:
- Monthly active user (MAU) numbers were 330m, flat from the prior quarter and an increase from 318m a year ago (3.8% growth).
- 21% of Twitter’s MAUs (68m) are based in the USA, down 1m on the prior quarter, with small user growth coming internationally (262m v 261m in the prior quarter).
- Attempts to drive greater engagement and more regular usage on the platform continue to work, with Daily Active Users (DAU) growing at 12% on prior year v 14% last quarter and 11% a year ago. Interestingly, the company does not reveal the absolute number of DAUs and actively refused again to release this in the face of formal queries.
- Ad metrics were encouraging – in Q4, the Twitter ads platform team made optimisations to ad serving logic that resulted in a 26% increase in ad engagement rates and an 18% increase in return for advertisers.
- Video remained Twitter’s largest ad format and grew as a percent of total revenue in Q4, reflecting strength in Video Website Cards, Video App Cards, InStream Sponsorships, and In-Stream Video Ads.
- Revenue was up significantly at $730m v $590m in the prior quarter and, $717m a year ago. The revenue trends were clearly the highlight of the quarter.
- The breakdown of revenue for the quarter showed 88% of revenue coming from advertising and 12% coming from data licensing/other.
- Twitter made a GAAP profit of $91m vs a loss of US$21m for the quarter; it also discloses “adjusted EBITDA which showed a profit of US$308m after adjusting for stock-based compensation, depreciation and amortisation. Twitter ended the quarter with US$4.4bn in cash so despite the frequent “Twitter is dying” headlines, the business is solidly funded.
- Live video remains a key focus. During Q4, Twitter announced approximately 22 new live-streaming, highlight, and VOD partnerships, including nine international deals. In total, the platform streamed approximately 1,140 live events throughout the quarter, with 60% of those reaching a global audience. In addition, 28 million live user-generated streams were broadcast in Q4 across both Twitter and Periscope.
- New ad products continue to be developed – in Q4, Twitter launched a new Promoted Tweet composer that simplifies the process of creating new Promoted Tweets. Also in Q4, Twitter entered into public betas in the US, UK, and Japan with a new subscription advertising product, Twitter Promote Mode (TPM), which helps small businesses reach more people without the work of having to create ads or manage campaigns.