Twitter reported revenue for the fourth quarter of 2018 on Thursday, revenue recognition and GAAP earnings per share that beat estimates and monthly active users who met analyst expectations. The shares fell about 8 per cent in premarket trading after the company gave easy guidance and said that expected expenses will increase by 20 per cent this year.
Twitter's outlook for Q1 2019 revenue fell below analysts' expectations, and predicted $ 715 million to $ 775 million compared to analyst estimates Twitter expects cash outlays to increase by 20 percent year-on-year in 2019 to strengthen its initiatives across "health, conversation, revenue product and sales, and tform", the company said in the earnings release.
Investors are likely to investigate Twitter's monthly active users (MAUs) growth. met analysts' estimates for MAUs in the quarter of 321 million, metric levels were down from the same period last year when it reported 330 million MAUs, probably due to recent initiatives prioritizing user well-being over engagement.
Twitter said in the fourth quarter report will stop reporting MAU after Q1 2019, as it will switch to a new metric, profitable daily active user (mDAUs) to reflect the audience ahead.
Twitter went out of MAU estimates for the two previous quarters. The company owes in July to clean "locked" accounts to get rid of bots and fake users, as well as "a number of factors including: GDPR, decisions we have made to prioritize the platform's health and not move to paid SMS carrier relationships on Some markets, as well as a product change that reduced automated use and a technical issue that temporarily reduced the number of messages sent. "
Twitter noted that it is now reporting mDAUs instead of daily active users (DAUs). The company said mDAUs measure "Twitter users logging in and accessing Twitter on a given day through Twitter.com or our Twitter applications that can serve ads."
Twitter said that mDAUs are not comparable with information from other companies, saying that owners tend to share "a more expansive calculation that includes people who do not see ads." The company said it will now report average mDAUs for both US and international markets.
Twitter reported mDAUs of 126 million in the quarter compared to 115 million mDAUs in the same quarter last year. The average US mDAU was NOK 27 million in the quarter compared to NOK 25 million in the fourth quarter of 2017, while the average international MDAU was NOK 99 million in the quarter compared to NOK 89 million in the same quarter last year, according to Twitter.
Still Twitter posted eight-straight quarters of growth in daily active users (DAUs), reported an increase of 9 percent in Q3 2018. CFO Ned Segel told CNBC last quarter, he sees room for further growth in it metric page less than half of the MAUs access the site daily.
"There are many opportunities to convert them to daily users, as we continue to improve all sorts of things around the service, from the messages you come across Twitter to continue improving the timeline," Segel said. "Our onboarding process can also be much better. We just need to make it easier for people to find the things people are looking for on Twitter."
CEO Jack Dorsey has suggested new features aimed at prioritizing user satisfaction over platform engagement. In an interview with Rolling Stone published last month, Dorsey said his team has "thought about what happens if we remove" like "counts from tweets.
" Finally, I want every person using Twitter not to spend hours or days or minutes that required content, but [instead] to be notified when there is something that they can learn from, and to a great extent, that they will participate in a conversation around it, Dorsey Rolling Stone said.
Twitter, along with social media peers including Facebook, has faced headwinds over the past year over its role in spreading misinformation and contributing to "filter bubbles." Twitter CEO Jack Dorsey witnessed in front of the Senate Intelligence Committee in September along with Facebook COO Sheryl Sandberg in January over foreign intervention in 2016 US elections.
Twitter has since taken steps to reduce the spread of misinformation by the platform, including bot cleaning and removal of thousands of bills it believed originated in Iran, Russia and Venezuela for the purpose of spreading misinformation about 2018 US mid-term elections.
-Forms CNBC reporter Michelle Castillo contributed to this report.
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