By Adam Fraser
Twitter has delivered its Q1 2018 results, producing another profitable quarter that has built on its first-ever quarterly profit from 2017. Whilst Twitter results announcements are always something of a mixed bag, growing monthly users and encouraging revenue trends were key positive aspects.
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 336m, up6m from the prior quarter and an increase of 3% from 326m a year ago.
- 21% of Twitter’s MAUs (69m) are based in the USA, up1m on the prior quarter. Most of the user growth came internationally (267m v 262m in the prior quarter).
- Attempts to drive greater engagement and more regular usage on the platform continue to be effective. Daily Active Users grew at 10% on the prior year (interestingly the company still does not reveal the absolute number of DAUs).
- Total ad engagements increased 69% year-over-year, resulting from increased aggregate demand, continuing mix shift toward video ad impressions, and improved CTR, which grew on a year-over-year basis across the majority of ad types based on improving ad relevance.
- Video now accounts for more than half of Twitter’s ad revenue, and was the fastest growing ad format in Q1, with strength across in-stream pre-roll and mid-roll ads, FirstView, Video Website Cards and Video App Cards.
- Revenue at $665m exceeded market expectations and was up 21% on the same quarter of $548m a year ago.
- The breakdown of revenue for the quarter showed 86% of revenue coming from advertising and 14% coming from data licensing/other.
- Twitter made a GAAP profit of $61m for the quarter (vs $91m profit in the prior quarter); it also discloses “adjusted EBITDA which showed a profit of US$244m after adjusting for stock-based compensation, depreciation and amortisation Twitter ended the quarter with US$4.5bn in cash so the “Twitter is Dying” narrative isn’t backed by balance sheet evidence.
- Live video remains a key focus. During Q1, Twitter announced approximately 30 new live-streaming, highlight, and VOD partnerships, including a deal with Fox Sports for a unique live FIFA World Cup recap show and highlights of every FIFA World Cup goal, MLB for live games and highlights, MLS for live games and highlights, and People TV for a new nightly interactive live series called “Chatter”. In total, the platform streamed approximately 1,300 live events throughout the quarter, with 68% of those reaching a global audience.
- In Q1 Twitter continued to make it easier for people to follow topics, interests, and events on Twitter, via curated timelines of Tweets around breaking news events in different parts of the app, including the Home timeline and search results.
“The first quarter was a strong start to the year,” said Jack Dorsey, Twitter CEO. “We grew our audience and engagement, marking another quarter of double-digit year-over-year DAU growth, and continued our work to make it easier to follow topics, interests, and events on Twitter. We also introduced a new framework to think more cohesively about the issues affecting our service, including information quality and safety. This holistic approach will help us more effectively address these challenges by viewing them through the broader lens of the health of the public conversation, and we’re encouraged by our initial progress in this area.”
The market cap of Twitter has now bounced back to around $25bn (as a proxy, Snapchat is now down to $13bn), and there seems to be a broader optimism around its strategy and focus since Jack returned as CEO.
Never a dull moment with Twitter, will continue to watch the business with great interest.