Twitter’s ad revenue has made a comeback into double digits in the last three months of CY 2019 as it clearly indicated that its advertising would be based on more direct-response formats.
Twitter also for the first time ever posted a $1.01 billion in revenue owing to a strong quarter in advertising sales. Although that being the case, net income and EPS (Earnings Per Share) registered sharp drops on the same period a year ago. Net income clocked $119 million, with a weakened EPS of $0.15. In comparison, a year ago in Q4 2018, Twitter had earned a net income of $255 million with a softened EPS of $0.33. Operating income for Q4 2019 stood at $153 million.
Financial analysts had projected revenues of $997 million (up 9.7% on the same quarter in 2019) with an EPS of $0.29, a shade lower than what Twitter had reported in the same period a year ago. The company had said in Q3 that it was looking to book revenues of between $940 million and $1.01 billion, with operating income between $130 million and $170 million.
Overall, the numbers look good after a somewhat troubled Q3, when Twitter posted a miss on both revenues and earnings after picking many costly advertising-related issues.
In 2019, Twitter’s fourth-quarter ad revenue grew 23%, which, in turn, helped the company reach a quarterly revenue of more than $1 billion for the first time in its history. In fact, its total Q4 revenue was $1.01 billion, up 11% year-on-year.
It may be noted that Twitter also makes some income from data and licensing — $123m for the quarter, up 5% compared to Q4 2018.
However, Twitter’s ad revenue growth is mostly fostered by its home market of the US, which makes up for nearly 59% of its total business. US-specific revenue was $591 million in Q4 2019, marking a 17% rise year on year, while international revenue marked a growth of only 3% to $416 million.
For 2019 overall, Twitter’s mustered a revenue of $3.46 billion, up 14% compared to 2018, of which ad revenue grew 14%, driven essentially by the 21% growth in the US market. The company reported a net income (profit) of $1.47 billion, helped ably by benefits from deferring tax assets; in fact, the company’s adjusted income came in much lower at $259 million for 2019.
Twitter’s user base, what the microblogging company describes as “average monetisable daily active users”, stood at 152 million for the quarter under consideration, compared to 145 million in the previous quarter, and 126 million in the third quarter of 2018.
In a letter to its shareholders, Twitter described itself as making “steady progress” on its two most important products: rewiring its core ad server — to be completed in the first half of 2020 — and its next-gen Mobile Application Promotion product, which is expected to be launched later this year.
The company, founded in 2006 at San Francisco in California, “In combination, these initiatives will solidify our existing ad products and position Twitter to provide more direct-response ad formats over time,” adding, “We also believe we have a significant opportunity to help consumers benefit from a more personalised experience on Twitter, providing them with highly relevant content across both organic and promoted content.”
Referring to user safety and privacy on its platform, Twitter said it had noted a 27% fall in complaints about tweets that had in some way violated its terms of service, such as those relating to abusive speech. In fact, the company noted how it had last week suspended the Twitter handle for Katie Hopkins, a far-right political commentator for unacceptable writing.
As of 31 December 2019, Twitter, founded jointly by Jack Dorsey (current CEO), Noah Glass, Evan Williams, and Biz Stone, said there were as many as 1,700 Topics people could follow in as many as six languages. Topics are automatically added or suggested to people’s timelines; the other option being they can browse all Topics.
Twitter, is also reorganising Lists as an alternative timeline approach that can be created by other Twitter users.