Twitter sees record surge in user numbers
But COVID-19 has destroyed its profits.
In March, Twitter CEO Jack Dorsey struck a deal with activist investors, ensuring he kept his job if Twitter’s active user base grew by 20 percent in 2020. At the time, we reckoned that if the platform’s monetizable daily active users, or mDAU, reached 182 million, Dorsey would be sitting pretty. Today, as Twitter publishes its second-quarter figures, that number has leapt from 166 million in April to 186 million now. That’s a record 34 percent leap over the previous year’s figures, and means that Dorsey can probably buy a nicer chair.
Much of this growth has been laid at the feet of COVID-19, which has loomed long over the social media landscape since the pandemic began. User numbers have surged all over the internet as people looked for ways to connect while stuck indoors in lockdown. But these lockdowns have slowed the economy, and as such many businesses have dramatically shrunk their advertising budgets. Companies like Twitter are dependent on ad money, and are feeling the pinch now more than ever.
Today, Twitter announced that it earned revenues of $683 million, a 19 percent fall compared to last year, with expenses rising to $807 million. Last quarter, this deadly mix of rising costs and falling revenue meant Twitter ate a $7 million loss. Today that loss has risen to $124 million, showing that until things get back to normal, Twitter’s going to be eating into its cash reserves and hoping those inexplicably-angry financial-types don’t get itchy feet.
COVID is, of course, only one factor in Twitter’s miserable summer after the platform’s highest-profile accounts were breached by hackers. It’s likely that those users, and plenty of others, are reconsidering their relationship with the service after so many people’s feeds were accessed. And if you lose the A-Listers, you could lose all of the folks who are on Twitter just to keep an eye on ‘em. Today, Twitter said that it is “committed to earning the trust” of its stakeholders and will be “transparent” in talking about how it fixes the issue.
Twitter added that it is working to improve its infrastructure and the quality of people’s conversation by deleting spammy and malicious accounts. It says that it deleted 15,000 misleading tweets and challenged 4.5 million accounts, as well as preventing 68 million “unannotated impressions.” Which we take to mean that those misleading tweets would have been seen around 68 million times if Jack Dorsey hadn’t been there clicking delete very, very rapidly.
