Twitter Shares Drop Nearly 20 Percent as Monthly Active Users Decline
Twitter shares dropped nearly 20 percent on Friday after reporting that its active users declined.
The company, in a statement on Friday, announced its second quarter 2018 results, saying that its average monthly active user-base dropped from 336 million in the first quarter to 335 million in the second quarter. The 1 million dropoff came from the United States.
The firm said in a letter that the drop reflected the “impact from decisions we have made to not move to paid SMS carrier relationships, prioritizing the health of the platform,” and protecting users’ data.
According to the letter, Twitter posted a profit of $100 million, with sales up 24 percent to $711 million.
Twitter said the decline in the third quarter would be in the mid-single-digit millions, suggesting a sequential decline to around 330 million users. Analysts, on average, had expected 340 million monthly active users in the third quarter, according to Thomson Reuters.
“We want people to feel safe freely expressing themselves and have launched new tools to address problem behaviors that distort and distract from the public conversation,” wrote Twitter CEO Jack Dorsey in the letter. “ We’re also continuing to make it easier for people to find and follow breaking news and events, and have introduced machine learning algorithms that organize the conversation around events, beginning with the World Cup.”
Twitter’s drop echoed that of Facebook on Thursday, when its shares ended down nearly 19 percent after the company said spending to improve privacy and slower user growth in big markets would hit margins for years.
Dorsey added in a statement that daily users grew 11 percent compared to a year ago, showing that addressing “problem behaviors” was turning the service into a daily utility.
Reuters contributed to this report.