Yesterday Twitter announced its maiden earnings as a public listed company for the fourth quarter and fiscal year ending December 31, 2013. The earnings have been strong for the 140 character network with a revenue of $242.7 million and earnings per share of $0.02 (non-GAAP) beating the analysts expectations that the company would lose two cents per share on total revenue of $217.82 million.
Twitter also reported that it had 241 million monthly active users and 184 million monthly mobile active users. While it is clear that 76% of its users access the network via mobile which is up by 37% on a year ago, Twitter is yet to break the data into how many of its mobile users are mobile-only.
Mobile which constituted 65 percent of advertising revenue for Q2 FY2013 saw it up by 75 percent making it $165 million of the $220 million Twitter made in ad revenues.
Despite such solid revenues, Twitter’s stock had fallen 18 percent in after-hours trading. Reason being its slow user adoption; Twitter now has 241 million monthly actively users — up 30 percent year-over-year, but only up about 4 percent from last quarter. Besides Timeline Views, which are another indication of user engagement that Twitter provides as a measure of how much content users are consuming, actually fell 7 percent to 148 billion.
However, the CEO Dick Costolo considers that the company is still well-positioned for growth and added that “will reach many more people” this year.
Answering the queries about the Timeline Views to analysts over the earnings call, Dick suggested that some of the user experience changes that Twitter made recently, such as threaded conversations, have reduced the number of timelines that a user needs to load. While at the same time the new timeline changes are becoming valuable as it is bringing in more ad revenues.
In Q4 2013, the ad revenues per 1,000 timeline views have been up by 76% on a year-on-year basis with visible growth in US and international market as well.
— TwitterIR (@TwitterIR) February 5, 2014
2014 will see a growth in Twitter as the company plans to continue introducing more features in areas like new user on-boarding, content discovery, and one-on-one conversations. Dick said that, there’s a “collection of these things that we want to do over the arc of the entire product,” which together will “develop the change in the slope of the growth curve” that the company is hoping for.
However, Twitter has no plans to follow the Facebook methodology of introducing multiple apps. Replying to the question, Dick suggested that as long as Twitter stays focused on that idea, he doesn’t need to have “any particular religion” on a strategy of one app versus multiple apps.
While the user growth has been an issue for the network, the strong revenues will keep the investors happy right when advertising revenues from mobile constituted 75 percent of its total advertising revenue. Facebook with 945 million monthly mobile users is only making 53 percent of ad revenues.
With mobile leading the way, revenues are strong for Twitter but it would be interesting to watch how it competes with messaging apps while growing a strong presence in the emerging markets.