Twitter may be having its best day ever, or at least in quite a while.
Just about everybody — but especially Wall Street (aka Twitter’s worst enemy) — expected to see slow user growth and a downturn on Twitter’s revenue.
And yet, the unexpected happened. Twitter… had a good quarter?!
The highlight is the return of user growth. Twitter added 9 million monthly active users over the quarter. That’s 7 million more than expected. The site broke out its growth in the United States, emphasizing that it added 3 million users in its home country.
Even the bad news wasn’t that bad. For the first time since going public in 2013, Twitter’s quarterly revenue declined. Yes, that’s not good, but analysts (and myself) were expecting a really, really bad day for Twitter. We were expecting to be disappointed, per usual.
And yet, Twitter surprised.
Twitter reported $548 million in revenue over the last three months compared to the $511.9 million that was expected by Wall Street. They beat expectations by more than $36 million.
Beyond financials and user growth, Twitter reported that it’s solving one of its major problems: abuse on the platform.
According to Twitter, they are seeing “less abuse reported across the service.” That statistic comes even as Twitter increases the number of reporting tools and their effectiveness. Twitter CEO Jack Dorsey humbly admitted he’s far from done.
“There’s a lot more to do but we’re on the right path,” Dorsey told investors on a public earnings call Wednesday.
Wall Street is happy. Twitter’s stock, which has fallen to a pitiful price over the last two years, was up by more than 10 percent in pre-market trading. Twitter, for once, is soaring.
It’s unclear where exactly user growth is coming, but Chief Financial Officer and Chief Operating Officer Anthony Noto pointed to several of their priority areas such as news and political accounts. “It’s what we’re best at,” he said.
Dorsey also pointed to the changes Twitter has introduced into the timeline, such as breakout sections that aren’t about chronological order but instead about relevance. For example, Twitter now has a section for suggested videos within the timeline.
Revenue is down for Twitter, but now that user growth and other parts seem to be in order, Twitter is finally prioritizing that again. Twitter is apparently considering more opportunities for revenue, including ads where tweets are syndicated (like in this article) and within Twitter Moments.
Twitter is also adding more data partners and getting accredited so that advertisers can have more faith in that their money is well spent on the platform.
“Our goal is to be the gold standard” for transparency to advertisers, Noto said.
One of Wall Street’s main criticisms for Twitter — during its time of struggle — has been in leadership. For example, Dorsey, a cofounder of Twitter, has two CEO positions. In addition to running the ship at Twitter, he leads payment company Square.
While the street has called for Dorsey to choose between his two babies, Dorsey has remain committed to both. How has he survived? Prioritization, he said Wednesday, for himself and for his companies.
“The biggest focus for me is making sure we have a really strong prioritization, and we understand what matters most,” Dorsey said. “Our core use case [at Twitter] is showing the world what’s happening … We’re operating at a greater efficiency so we can ship faster.”
“We’re focused on only what matters.” – @jack
Indeed, Twitter has shut down many initiatives over the last year in an effort to cut down on costs, increase engagement and move toward profitability. It shut down the beloved app Vine last October, for example.
“We’re focused on only what matters. We’re moving anything that might have been distracting,” Dorsey said. “I get more and more confident every single day.”
An unexpected, but much appreciated question from the call centered on bots. Since Twitter is adding an impressive amount of users now, let’s consider how many of these accounts are real.
Twitter has had a long-time problem with bots. But, according to Twitter, it’s minimal. Dorsey cited a statistic, first released in 2014, that only 5 percent of Twitter accounts are spam related. But they have the means to shut these down, according to Dorsey.
Perhaps they will. Dorsey, for once, seems confident. Next week, Twitter will host its first-ever NewFront presentation, where digital media companies pitch upcoming series to advertisers, who can then choose to sponsor the content.
In the meantime, Dorsey will be listening.
“Have a great day. We’ll see you on Twitter,” Dorsey said to end the call.