Twitter shares fall due to slow user growth

What to Know Before Twitter Reports Earnings Thursday

For the quarter through March, Twitter said it expected total revenue of between $715 million and $775 million.

Twitter said on Thursday profits rose sharply in the fourth quarter, lifted by gains in advertising despite a drop in its global user base.

On a conference call with analysts Thursday, CEO Jack Dorsey reiterated his belief that Twitter's ongoing health initiatives will be a "long-term growth vector" for the company.

The reasoning is that a less-toxic Twitter should benefit its standing with ad buyers in the long term. Instead, Twitter will use monetizable daily active users (mDAU) as its "audience and engagement metric", the company explained, in a statement.

Shares were down about 6 percent in premarket trading at $32.10, after closing at $34.16 on Wednesday.

Analysts polled by FactSet were expecting earnings of 25 cents per share and revenue of $867 million.

Some analysts said it was time for Twitter to show the results of efforts to safeguard its platform.

The number of monthly active users actually declined from 326 million in the third quarter of 2018 to 321 million during Q4.

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Twitter's operating costs are expected to surge by 20 percent year on year, a large increase from analysts projections of 12 percent.

"So, starting this quarter, in addition to sharing the growth in mDAU as we have since 2016, we are disclosing the absolute number of average mDAU (previously referred to as DAU), for both the United States and worldwide markets", said Twitter.

Twitter shares dropped 10 percent after the reveal of its quarterly report, via Reuters.

Twitter said its calculation of daily active users captures "monetizeable" users, which aren't comparable to current participation numbers from other social-media companies that include people who don't see advertisements.

The social media company posted a decline in monthly active users, due in part to its campaign of deleting millions of abusive accounts after facing criticism it was being used as a platform for political influence operations and hate speech.

Overall revenue in the fourth quarter rose to $909 million, handily beating analysts' estimate of $868.2 million.

Total advertising revenue rose 23 percent to $791 million (roughly Rs. 5,500 crores).

Twitter has made its first annual profit in its 13-year history but another fall in the number of its users and a disappointing sales forecast took the gloss off the results and sent its shares down almost 10 per cent.

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