Twitter shares drop 10% as revenue outlook disappoints

Twitter will stop reporting active user metrics stock plunges

Clement Thibault, an analyst at global financial platform Investing.com, commented on the figures stating "Yes, total user numbers are down, but we've known for a while now that Twitter has a fake-users problem and is trying to deal with it, so that shouldn't come as a surprise to anyone".

After the fiscal first quarter of 2019, Twitter will stop reporting its number of monthly active users in its quarterly results.

Twitter also expects capital expenditure of between $550 million and $600 million in 2019, well above analysts' average estimate of $415 million.

In its earnings release, Twitter said that it anticipates increasing its operating expenses by 20% this year to address its "existing priorities of health, conversation, revenue product and sales, and platform". Twitter reported a record-setting revenue of $909 million in the fourth quarter, a 24-percent increase compared to this time previous year. For instance, earlier this week Snapchat reported that it has stopped shedding users and is keeping the service afloat at 186 million daily users - but it's not clear how many of those daily users are monetised by Snapchat.

After years of withholding the figure, choosing instead to just share its monthly userbase, Twitter reported what it called "monetizable" daily active users in its fourth-quarter earnings report.

In a statement, Twitter said that an mDAU is a user who is accessing its service "on any given day" and is able to be shown ads.

Positive results reported by Twitter included quarterly revenue of $909m, up 24% year-on-year and ahead of Wall Street estimates, and full-year profits of $1.2bn.

Instagram alone had 500 million daily active users in 2017 (the most recent data we could find) and is most likely getting even more than that today.

Total advertising revenue surged 23 percent to $791 million in the quarter, with more than half of that figure coming from video ads placed by corporate clients. The company has historically never revealed how many active daily users Twitter has, only the amount of users who log in (at least) once a month. $791 million of that figure comes from advertising revenue, split $425 million in the USA compared to $366 internationally - while data licensing making up the other $117 million.

Still, in early trading on Thursday morning, Twitter shares (twtr) are tumbling.

Twitter has made its first annual profit in its 13-year history but another fall in the number of its users and a disappointing sales forecast took the gloss off the results and sent its shares down almost 10 per cent.

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