UPDATED with details from investor call.
Twitter exceeded analyst expectations in the first quarter, thanks to better-than-expected revenue growth.
The company reported per-share earnings of 16 cents, topping consensus analyst estimates of 12 cents. It booked revenue of $665 million, exceeding forecasts of $605.4 million for the first quarter.
“The first quarter was a strong start to the year,” Twitter CEO Jack Dorsey said in a statement. “We grew our audience and engagement, marking another quarter of double digit year-over-year (daily active user) growth, and continued our work to make it easier to follow topics, interests, and events on Twitter.”
The number of daily active users grew 10% in the first quarter, as Twitter worked to make the social media platform easier for users to follow breaking news and topics of interest. Monthly active users increased to 336 million, up 3% over the same time a year ago.
The company also made strides in combatting spam and fake accounts. Twitter removed more than 142,000 apps, responsible for more than 130 million tweets, according to the company’s letter to investors. Changes to TweetDeck and Twitter resulted in 90% fewer fake or bot accounts.
Revenue rose 21% year over year, with video now accounting for more than half of the company’s revenue.
Investors liked what they saw: Twitter’s sock rose 5% in pre-market trading to $31.74.
“The first quarter was a breath of fresh air for investors that have patiently awaited this turnaround story to manifest after years of pain and it looks like the Twitter growth train is back on track delivering two very strong consecutive quarters,” wrote Daniel Ives, head of technology research at GBH Insights.
Twitter turned its first profit in the fourth quarter of 2017, reporting earnings of $91 million and its fifth straight quarter of double-digit, year-over-year growth in the number of daily users. The platform credited new features that help people discover and talk about what’s happening on Twitter.
In the call with investors, analysts pressed Twitter to address how its data business would be impacted by the coming General Protection Data Requirements that take effect next month in the European Union.
Chief Financial Officer Ned Segal said Twitter is a public platform where all the data is out in the open. He said Twitter performs sentiment analysis for brands, researchers and government agencies that want to determine how people feel about their products and services — whether it’s Northeastern University looking for feedback on its flu tracking service or Virginia’s emergency department ensuring it’s providing relevant information to residents.
“We do not provide personal identifiable information that’s not already visible on the service,” Segal said.
Dorsey talked about Twitter’s Fox Sports collaboration on the 2018 FIFA World Cup tournament in June, and how Twitter users will be able to see — and share — every single goal. Live streams of sports events enhance the conversation on the platform, he said. Twitter has been highlighting these live events by placing “happening now” modules at the top of users’ timelines when they’ve indicated an interest in a particular team or event.
Twitter has taken other steps to keep people active on the platform on a daily basis through notifications and curated timelines. Dorsey said the company has been working to help people find topics of interest faster, with the aid of machine learning. It displays live video — be it sports or breaking news events — at the top of users’ timelines, along with the entire conversation around it, to make it easier for users to get to the information they find most compelling and relevant.
“We are not a social network. We do not benefit from social graphs,” Dorsey said. “People come to us when they’re interested in events happening in the world or with a niche interest. We’ve been biasing a lot more of the service towards interest and topics.”