LONDON: Twitter Inc. posted better-than-expected quarterly revenue and a surprise rise in monthly active users, showing its efforts to delete spam accounts and better police posts were paying off by attracting more users and ad dollars. Twitter shares surged nearly 10 percent shortly after the first-quarter earnings announcement in premarket trade.
It was the company’s last quarter of disclosing its monthly active user count, and Twitter from now on will only provide its “monetizable” daily active users, a metric it created to measure people exposed to advertising on a daily basis.
Analysts were encouraged by signs Twitter had turned a corner in terms of monthly user growth and better appealing to advertisers, but said that the new user metric could make comparisons between Twitter and other social media platforms more difficult.
“It looks like Twitter is on path to sustainable revenue growth and accelerated profit expansion, driven by improvements to the user experience and tools enabling direct response and search advertising,” analyst Michael Pachter at Wedbush Securities said.
“But people are not impressed with a made up metric and their reluctance to give us actual users. I don’t think the stock can get out of its own way until they come clean and report the same metrics everyone else does.”
The company also forecast revenue for the next quarter largely below analyst estimates, and said that it would need to continue to spend heavily on cleaning up Twitter as well as new ad products and other improvements.