Twitter swung to a loss in the past quarter as the global pandemic hit advertising revenue, even as the social platform saw a surge in new users. In its quarterly update Thursday, Twitter posted an $8 million loss while revenues edged up three percent to $808 million and its user base increased 24 percent.
Chief executive Jack Dorsey said the platform was working to be a useful resource for people during the global lockdowns. “In this difficult time, Twitter’s purpose is proving more vital than ever,” he said. “We are helping the world stay informed, and providing a unique way for people to come together to help or simply entertain and remind one another of our connections.” The results appeared to ease concerns of deeper problems for the tech company, and Twitter shares jumped more than five percent in pre-market trade. Twitter said ad revenue was essentially flat in the quarter, with the pandemic hitting economic conditions in March.
The company’s preferred measure — “monetizable” daily active users — hit 166 million, a leap of 24 per cent from a year ago. Twitter said 14 million new users joined the platform over the past quarter, its best gain using that metric. Last month, Twitter dialed back its financial guidance as a result of the COVID-19 outbreak, which has dealt a blow to the global economy and advertising, which makes up the bulk of its revenues. The San Francisco-based company also struck a deal with activist investors to keep Dorsey in charge in exchange for a reorganization of the board. Dorsey also modified plans to spend a large part of the year in Africa. Twitter has also been scrambling to weed out hoaxes and misinformation about the coronavirus which have been proliferating on social media.
“We’ve responded quickly to the challenges, updating our policies, increasing our use of machine learning and automation to take actions on potentially abusive & manipulative content, ensuring continuity of service, and partnering with advertisers to adapt their campaigns,” Twitter said. Twitter said it was not offering a project for the current quarter “given the unprecedented uncertainty and rapidly shifting market conditions.” Jasmine Enberg, an analyst at eMarketer, called the results “a positive surprise.” “A strong January and February were enough to partially offset the steep coronavirus-related declines in its March revenues,” Enberg said. “But Twitter’s ad business is heavily event-driven, so the suspension of major sporting leagues in March will have hurt its bottom line and will continue to do so as long as social distancing and stay-at-home measures remain in place.”