Twitter Inc. on Thursday disclosed the number of users who compose and read tweets on its service each day — the first time it has revealed that information.
The company showed growth in its number of daily active users and posted its fifth quarterly profit in a row, but it also said its monthly user count slipped and issued guidance for the current quarter that was below expectations. Its stock price dropped nearly 10%.
In its earnings report released Thursday morning, Twitter said it has 126 million daily active users, a figure that is 60 million smaller than Snapchat’s and is dwarfed by Facebook’s 1.2 billion.
Still, Twitter’s number of daily active users continues to grow: It was up 9% in the October-through-December quarter compared with the same period a year earlier. Twitter also said its daily user numbers only include those accounts that can see advertisements; it excludes, for instance, people who use third-party apps that don’t show ads, which the company says makes its figures “not comparable to current disclosures from other companies.”
Twitter has historically disclosed the percentage growth of its daily users but not the actual number of those users.
The company also posted another profitable quarter, its fifth consecutive period of profitability. Twitter brought in $909 million in revenue for the fourth quarter, up 24% from the year-earlier quarter, and its profit more than doubled to $255 million.
“2018 is proof that our long-term strategy is working,” Chief Executive Jack Dorsey said in a statement. “We enter this year confident that we will continue to deliver strong performance by focusing on making Twitter a healthier and more conversational service.”
But in the current quarter, Twitter expects revenue of between $715 million and $775 million. That outlook, along with the change in disclosures about user numbers, may have unsettled investors. The stock dropped 9.8% to close at $30.80 a share.
In a call with investors Thursday, Dorsey cast Twitter as an indispensable platform for hosting unique conversations, one that gives users insight into events and debates around the world. “You can’t find the conversation on Twitter anywhere else,” he said. Dorsey said the quarter was Twitter’s most successful ever.
The company’s strategy includes four broad objectives, Dorsey said: promoting healthy conversation on the platform, making it easier for users to participate in conversations, improving the platform for advertisers and focusing on new technology to improve the service.
Dorsey said the platform is a hub for following people’s interests, but he acknowledged that it can be difficult for users to engage in conversations and, for first-time users, difficult to find accounts that share their interests. He said the company is developing ways to remove the initial work by users to find relevant discussions, jump into sporting events and follow breaking news.
Twitter reported that the number of monthly active users is declining. It claimed 321 million monthly users — down 9 million, or more than 2%, from a year earlier. “The falloff in monthly active users is likely a continuation of Twitter’s efforts to remove questionable accounts,” said Jasmine Enberg, an analyst at the research firm EMarketer.
This summer, the Washington Post reported that Twitter suspended more than 70 million accounts in May and June as it cracked down on fake accounts that stoke disinformation and manipulation. The company’s efforts to rid its platform of such accounts has continued.
Enberg said the growth in daily users, however, means that people are still “highly engaged” on Twitter, which advertisers will take as a positive sign. Twitter also has room to grow by converting people who use the site infrequently into daily users, she said, which would allow the company to boost its revenue without having to grow its overall user base.
Ned Segal, Twitter’s chief financial officer, told investors that deciding to disclose the company’s daily user base is the best way to measure the company’s success. After the earnings report for the first quarter of 2019, Twitter will discontinue posting its figures for monthly users, he said.