While most of the big tech companies have seen a surge in their profits during the pandemic as the demand for their products and services spiked. However, Twitter reported the opposite.
Twitter recently shared that the micro-blogging platform has seen a weaker than expected earnings and disappointing user growth. Profit in the first quarter stood at $68 million, which contrasted with a loss of $8 million in the same period a year ago.
The platform’s revenues grew 28 per cent from a year ago to $1.04 billion but the key figure of “average monetizable daily active users” was below expectations at 199 million, an increase of 20 per cent from a year ago.
Twitter shares dropped as much as 11 per cent in after hours trade as the results fueled concerns that the platform is not growing fast enough in the rapidly shifting social media space. The company is calling it a ‘solid start’ to the year which is showing growth in ad revenues.
Despite the fact that the platform has become a key forum for policy debates, the shares drop is also attributed to the weaker guidance for the coming quarter, which has struggled to expand beyond its core audience of celebrities, journalists and political leaders.
Jack Dorsey, Twitter’s Chief Executive said; “People turn to Twitter to see and talk about what’s happening, and we are helping them find their interests more quickly while making it easier to follow and participate in conversations.”
Dorsey also added that the growth was “driven by ongoing product improvements and global conversation around current events.”
However, some analysts are of the opinion that Twitter’s performance was better than the Wall Street reaction suggested.
Rich Greenfield at Lightshed Partners shared via a tweet that Twitter has delivered “21 straight quarters” of user growth and that there were “107 percent more people using Twitter daily than five years ago.”
Analyst Nazmul Islam at eMarketer said Twitter delivered “another good performance.. with advertising revenues growing 32 percent.” Islam said user growth may have been slower in the first quarter due to gains in 2202 but that “we anticipate that they will hit the 200 million mark and continue to drive engagement with their commitment to remove false and harmful content on their platform.”
Twitter has faced challenges in tackling misinformation and abusive content even as it strives to become a platform for political discourse.
“We want our policies to remain relevant to the ever-changing nature of political discourse on Twitter and to continue to promote healthy conversation,” Twitter said in its shareholder letter.
Twitter said it sees a “modest impact” from new privacy rules being implemented by Apple that limits the ability of apps on its marketplace to track user activity.
From : pk.mashable.com