Twitter revenues rise…but user growth slows and no profit in sight

Oct 30, 2014 | Social media, Twitter marketing

Twitter share prices have dipped 10% on the news that its third-quarter results that show the social network Twitter added only 13 million new users and remains unprofitable. The news comes in stark contrast to the success of rival digital giants. Apple made $8.5bn in the third quarter, Google delivered $2.8bn and Facebook nearly doubled […]

Twitter share prices have dipped 10% on the news that its third-quarter results that show the social network Twitter added only 13 million new users and remains unprofitable.


The news comes in stark contrast to the success of rival digital giants. Apple made $8.5bn in the third quarter, Google delivered $2.8bn and Facebook nearly doubled its profits to $1.1bn.
Results released on Monday for the third quarter of the year show Twitter’s revenues soared to $361m, up 114% from the same period last year, beating expectations.
However, the number of monthly active users of the service grew just 13 million to 284 million from the previous quarter.
Analysts had predicted growth would between 14 million and 17 million.
The number of monthly active users represents a 23% increase year on year but was up just 4.8% from the last set of results and below the 6.3% quarter-on-quarter growth it reported in the second quarter.
One metric that is moving in the right direction is the value of Twitter’s ads. People checked their timelines 181 billion times, a 14 percent increase year-over-year.
Twitter got paid more for those views, making $1.77 for every thousand views of its timeline, a whopping 83 percent increase from the same period in 2013.
The company has shaken up management and begun changing its platform in order to make it more accessible to new users. During the quarter it updated its service on Apple’s iPhone, introduced a new options for its Vine video service and launched a new service tailored to NFL fans.
Last week it held its first developers conference in four years, a move to embed its real-time technology in a new generation of apps and services.
“We had another very strong financial quarter,” said Dick Costolo, CEO of Twitter. “I’m confident in our ability to build the largest daily audience in the world, over time, by strengthening the core, reducing barriers to consumption and building new apps and services.”
Twitter’s stated aim is to eventually reach every person on the planet. In a conference call with analysts Costolo said he was happy with the “strategy and the quality” of what the company was doing but that given the scale of the company’s ambitions it was “more critical than ever” for Twitter to pick up the pace.
Twitter accounted for 0.5% of global digital ad revenues in 2013, according to eMarketer. That figure is expected to increase to 0.8% this year.
By comparison, Facebook, which reports its latest quarterly results tomorrow, is expected to increase its share of the worldwide digital ad market from 5.8% in 2013 to 8% this year.

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