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Twitter Posts Record Revenue Result in Q4, Maintains Usage Growth



Twitter has shared its latest earnings results, posting an increase of 5 million daily active users to 192 million, and a record quarterly revenue result, driven by higher ad spend.

But there are some notes of concern, particularly in regards to rising costs. First off, here’s Twitter’s current mDAU (monetizable daily active users) chart:

Twitter Q4 2020

Twitter’s a little slippery with the way that it presents its data, in only providing a direct comparison to Q4 2019, which makes the results look better. But for broader comparison, here are the previous four quarters of Twitter’s mDAU stats.

Twitter Q4 2020

As you can see, Twitter added 3 million more mDAU in ‘International’ markets in Q4, along with one million in the US. So it actually, seemingly, added four million users total in Q4, not five, but a mathematical anomaly in its Q3 results seems to have confused things. 

Regardless, that growth rate is steady enough, but not exactly setting the world on fire, and that could be a concern when you also consider that Twitter may have just passed its peak interest point. Former US President Donald Trump used Twitter as his primary social network of choice, which should have brought more people to the platform more often. If it did, it didn’t contribute significant numbers in the US market.

For comparison, Twitter’s 27% YoY increase in active users is better than Snapchat, which posted a 22% YoY increase in DAU last week, while Pinterest saw a 37% increase in monthly active usage. Based on these figures, Twitter is not way out of line with industry trends, and 2020 was a difficult year to measure. Hard to tell, then, how much of a concern this element might be.

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In terms of engagement, Twitter says that it implemented new elements to significantly improve content personalization and discovery within people’s first few days of either activating or re-activating their Twitter account. Improving discovery has been a key focus as Twitter looks to attract more users – and long that line, Twitter also expanded its selection of topics users can follow, as opposed to profiles, while also seeking to better personalize topic recommendations. 

“These improvements drove a meaningful increase in the number of Tweets liked by customers who followed a Topic, with average engagement rates for topical Tweets more than 2X the engagement rate for Tweets from account-based follows in Q4.”

Interesting that Twitter refers to users as ‘customers’ here. If you ever wanted to know where you stand in Twitter management’s eyes…

Which brings us to revenue – as noted, Twitter brought in a record $1.29 billion in Q4, up 28% year-over-year.

Twitter Q4 2020

Optional Caption

Retrieved from Twitter on February 10, 2021

As you can see, Twitter’s revenue growth between the US and International markets was pretty much split down the middle, with neither taking a significant lead in driving its results.

Twitter attributes the better result to increased interest in its ad products as the economy started to recover, with total ad engagements up 35% YoY. Data licensing and other revenue also reached $134 million, an increase of 9%, while Twitter’s full-year 2020 revenue was $3.72 billion, an increase of 7% YoY.

The results, again, are steady, and show a growing maturity in Twitter’s business approach. But there are also some concerning notes in Twitter’s numbers.

“2020 costs and expenses totaled $3.69 billion, an increase of 19% year over year. […] Cost of revenue grew 38% to $433 million, driven by traffic acquisition costs, revenue share from partnerships, and public cloud-related expenses. Research and development expenses grew 25%.”

Those are some significant increases in expenditure, which reduced the margin on Twitter’s earnings performance. And more than that, Twitter’s anticipating higher costs moving forward. 

“We expect to grow headcount by more than 20% in 2021, especially in engineering, product, design, and research. Given the hiring and investment decisions made in 2020 and previous years, along with anticipated 2021 headcount growth, we expect total costs and expenses to grow 25% or more in 2021.”

And that’s before you factor in any potential impact from the coming iOS 14 changes, which Twitter is anticipating will be ‘modest’.

“We expect total revenue to grow faster than expenses in 2021. How much faster will depend on our execution on our direct response roadmap and macroeconomic factors.”


That’s not exactly a heartening outlook for investors, but as we noted recently in regards to Twitter’s recent acquisition spree, the platform is under pressure to innovate fast, and ensure that it not only avoids a lull in the wake of the Trump era, but that it actually thrives and builds on that momentum. Maybe, with the right positioning of these new features, including newsletter platform Revue and its new audio Spaces offering. Maybe, Twitter can slot them in just right, and maximize its revenue potential. But it’s a big ask, and the numbers here don’t do a lot to alleviate that pressure just yet.

But it is hard to make any real comparisons in 2020. It was a year like no other, which produced unpredictable results on many fronts, making it difficult to use as a forecasting tool for what’s coming next.

Given this, we’ll likely need to wait till at least Q2 before we have clearer direction on how Twitter’s faring in the wake of Trump, and how its newer innovations and features are being received.



Twitter Adds New Spaces Recording and Management Tools as it Continues to Focus on Audio Options



Twitter Adds New Spaces Recording and Management Tools as it Continues to Focus on Audio Options

I remain unconvinced that Twitter Spaces will ever become a thing, but Twitter itself seems certain that there’s major growth potential there, as evidenced by its continued push to add more elements to its Spaces offering, in order to lure more listeners across to its Spaces tab, and maximize listenership within its audio broadcasts.

This week, Twitter has rolled out another set of Spaces updates, including permanent recordings (as opposed to them deleting after 30 days), the capacity to save recordings after broadcast, and new details within the Spaces bar at the top of the app.

First off, on permanent recordings – after initially launching its Spaces recording feature to all users back in January, Twitter is now extending the life of those recordings beyond the initial 30 day period.

That’ll provide more capacity to attract listeners over the longer term, and keep your conversations alive in the app.

In addition to this, Twitter’s also adding a new listing of your recorded Spaces within your app settings menu, where you’ll be able to play each session back, delete those that you don’t want to keep, or share a recording direct from the list.


That’ll enhance the functional value of Spaces chats, making them more podcast-like, and more of a vehicle for ongoing promotion and audience building – though it does seem to also maybe go against what made audio platforms like Clubhouse so attractive to begin with, in that they were live, in-the-moment chats that you had to be there to catch.

But podcasts is clearly more of the angle that Twitter’s now going for, based on these example screens of another new test in the back end of the app.

Twitter Spaces Stations test

As you can see in these images (shared by app researcher Alessandro Paluzzi), Twitter’s also developing ‘Stations’ within the Spaces tab, which would incorporate podcasts into its audio stream, providing even more options for tuning into on-demand audio content within the app.

That could make Spaces recordings even more valuable, and potentially help Spaces broadcasters translate their work into a monetizable podcast process – but do Twitter users really want to tune into podcasts from the app? I mean, we have Spoitify and Apple Podcasts and various other options available.

Could Twitter really become a key hub for audio content like this?

In some ways, it seems unnecessary, but then again, the real-time nature of tweets lends itself to topical discussion, and that could make it a good hub for all of these types of discussions and content, including Spaces, Spaces recordings, podcasts, etc.

And again, that would better facilitate connection between Spaces and recorded audio. It just depends on whether Twitter users will actually come to rely on the app for their latest podcast content.

On another front, Twitter will now also enable iOS users to record a Space when the broadcast is over, even if they didn’t hit ‘Record’ during the session.

Twitter Spaces recordings

Which also means that the ‘REC’ marker would not have been present during the session, alerting participants to the fact that this was being recorded, which could be problematic for some contributors.

In some ways, it seems like Twitter didn’t offer these options initially because it thought that it wouldn’t be able to facilitate the data storage required to keep all of the many recordings in its data banks, but now, with so few people broadcasting, it’s maybe found that this won’t actually be a problem.


A sort of ‘glass half full’ element, I guess.

Finally, Twitter’s also adding new details into the Spaces bar on Android, including additional, scrolling insights into who’s hosting, the topics being discussed, who’s shared a Tweet in the chat and more.

Twitter Spaces info

That could entice more users into the session – or at the least, bring even more attention to the Spaces bar at the top of the app by providing more, bigger info.

Though again, I don’t know. It doesn’t seem like Spaces is really catching on, going on the participant numbers in the Spaces stream. And while the addition of podcasts could be interesting, I don’t see Twitter becoming a key app for audio content, especially as the Clubhouse-led audio trend continues to die down.

But maybe the engagement numbers are better than it seems. I mean, you’d have to assume that they are, given Twitter’s ongoing investment in the functionality – through Twitter CEO Parag Agrawal did note last month, that the company had not hit intermediate milestones on its growth plans, based on its investment in new functionalities like Spaces, Communities and Twitter Blue.

Twitter hasn’t shared specific data, so maybe there’s more to it, and that’s why it’s so keen to push ahead with more Spaces tools. But either way, it’s giving it its best opportunity to succeed, and it’s seemingly not done yet with its Spaces development.

Will that, eventually, result in Spaces becoming a thing? Only time will tell.

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