NEW YORK: Twitter Inc said it lost 1 million monthly active users from the previous quarter and warned the closely watched figure could keep falling as it deletes more phony accounts, causing the biggest one-day decline in its shares since 2016.
The company said the work it was doing to clean up Twitter by purging automated and spam accounts had some impact on user metrics in the second quarter, and that it was deciding to prioritise tackling suspicious accounts and reducing hate speech and other abusive content over projects that could attract more users.
Allegations of Russian meddling in the 2016 US election by spreading misleading or divisive content over social media have made the issue of improving control over accounts and content critical for Twitter.
Twitter, like bigger rival Facebook has been under pressure from regulators in several countries to weed out hate speech, abusive content and misinformation, better protect user data and boost transparency on political ad spending.
The user outlook came as Twitter reported higher-than-expected revenue thanks to the Fifa World Cup, video ads and booming international ad revenue. Twitter also earns revenue from licensing its data.
The quarter marked the first time overseas revenue contributed the majority of Twitter’s ad sales.
The World Cup brought in $30 million of revenue in the quarter. But Chief Financial Office Ned Segal told analysts that the event, which carried into the third quarter, raked in less revenue in its second two weeks.
Twitter raised its 2018 capital spending forecast and said adjusted EBITDA margins in the third quarter would be below the second quarter’s. Twitter shares tumbled 19 per cent to $34.75 in afternoon trading, marking their biggest one-day drop since October 6, 2016.
The reaction in Twitter shares to the user outlook may be overblown, some analysts said.
Twitter executives answered questions on the earnings call by saying the steps to improve daily user and advertiser experience would be a long-term boost for the company, and that there had been no revenue hit. Revenue of $711 million rose 24 per cent from last year and exceeded the average estimate of $696 million.
Chief Executive Jack Dorsey said in a statement that daily users grew 11 per cent compared to a year ago, showing that addressing “problem behaviours” was turning the service into a daily utility. The company does not disclose daily users. — Reuters
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