Shareholder Report Reveals Shrinking Userbase for Twitter

Published: February 11, 2016 9:26 PM /


WAM Twitter

Twitter's shareholder report for Q4 of 2015 is out, and it has some mixed news. On the positive side, revenue is up. While Twitter has never been profitable in its entire existence, it is now losing less money than it was the previous year. Q4 revenue was $710 million, an increase of 48% compared to Q4 of 2014. Twitter is reporting a net loss of just $90 million for the quarter, down from $125 million from Q4 of the previous year.

Twitter's increased revenue appears to be the result of many new deals with advertisers. Twitter reports partnerships with 130,000 advertisers, an increase of nearly 90% year over year. A number of new initiatives have contributed to this success with advertisers, including a test run of showing ads to those who visit the site while not logged in. Twitter is going to be expanding the geographic regions where advertisers can target logged out ads, in a bid to get the most value out of their user base. Twitter also reports an increase in ad engagement, which is attributed to autoplay videos.

In spite of this good news, the report does show some troubling news for the company. The growth of the site's userbase appears to have stalled. The total number of active user for the quarter was 320 million, which is exactly the same as Q3. It represents an increase of just 9% year over year. Excluding SMS Fast Followers, the situation is even worse, with an actual decrease from 307 million to 305 million active users between Q3 and Q4, and a growth of just 6% year over year. SMS Fast Followers have very limited interactions with the platform through text messaging, and are only able to receive a limited number of updates per day, which is why they are considered less important than regular users.  The report even states that future reports will no longer include Fast Followers in the count of total active users. A bit of good news in the report is the statement that active users excluding Fast Followers have returned to Q3 levels by January of this year.

Is this report good or bad overall for Twitter? Do you think recent changes to the platform are behind its shrinking userbase? Leave your comments below.


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