The much anticipated Twitter Q4 2017 earnings report demonstrates a company that continues to struggle with retaining users and monetization issues…
Social microblog Twitter is almost twelve years old. In its industry, that’s ample time to figure its way. But, the company hasn’t managed to realize a profit in all that time. That is, until last quarter. For the first time, Twitter actually posted a profit. However, it lost more users.
Twitter Q4 Earnings Report Reveals First Time Profit, Loss in US Users
The company revealed it made $91 million in Q4 2017. That’s a huge turnaround from the same period in 2016 when it lost a whopping $167 million. It did so partly by cutting operating costs. And, the company increased its profits, hitting $732 million, a 2 percent boost from $717 million in 2016. Although, during the other three previous quarters last year, revenue declined by 4 to 8 percent year-over-year. At this time, it’s unclear why that trend emerged but it’s plausible advertiser dollars shrunk due to sitewide issues.
Even though Twitter managed to post it first-time profit, it’s still losing in a key metric — users. Monthly users did increase by 4 percent year-over-year. However, user growth didn’t grow at all, staying flat at 330 million, quarter-over-quarter. Worse yet, Twitter’s U.S. monthly users declined, falling by one million from 69 million to 68 million. Internationally, the dynamic worked differently. It’s growth outside the U.S. remained slow but steady.
It appears from the numbers the same problem still exists. The platform has a lot of trouble attracting new users and can’t retain existing users. On the bright side, its increased character limit, from 140 to 280, did help. With that change, the microblog recorded more time on site and more repeat visits.
We are committed to making Twitter safer, and we are clarifying our policies, improving our enforcement, and communicating more clearly. #TWTR
— Twitter Investor Relations (@TwitterIR) February 8, 2018
Twitter continues to struggle to find its niche (and user retention). The latter is due to inherent confusion about how to use the platform (the company has even conceded its flagship product is difficult to use).