Tech

Twitter is making tons of money despite drastic declines in monthly active users

Twitter’s revenue is reportedly increasing despite a drastic decrease in the number of monthly users. The increased sales eased investors concerned about the company’s efforts to clean up the platform.

On Thursday, the company reported higher sales numbers for the quarter, even after the largest drop in monthly users in the company’s history.

From July to September, Twitter had 325 million monthly active users on its platform. That is 1 million users less than in the previous quarter, and 5 million less than the same time last year. The decline in users was felt specifically in the US, where the number of active monthly users fell from 68 million to 67 million in the course of a month.

Brian Wieser, a senior analyst with Pivotal Research, said that Twitter was in a tight spot since stakeholders were concerned that the company’s efforts to improve the health of the platform might drive away some investors and users in the short run.

Twitter commented that the decline in users is a result of their compliance with the recent European data privacy law. The company has also taken meaningful steps to clean up the platform from spammy and malicious users. These are “decisions we have made to prioritize the health of the platform”. The company expects a continued decline in monthly users in the upcoming quarter.

The upside here is that the number of Twitter’s daily users is growing on a daily basis, increasing by 9 percent in the past year. “This quarter’s strong results prove we can prioritize the long-term health of Twitter while growing the number of people who participate in public conversation,” said Jack Dorsey, Twitter’s CEO and cofounder.

Dorsey said in a statement on Thursday that Twitter managed to reduce “suspicious” account signs ups by 20 percent compared to the last quarter. He mentioned this came as a result of “new techniques” the platform is employing to detect malicious and spammy accounts.

Dorsey did not deny that the company’s efforts to clean up the platform will result in “short term implications” for the amount of monthly active users. However, he believes that Twitter’s new focus to provide a less toxic environment will lead to “long-term growth of the platform.”

Twitter’s commitment to a healthy platform is already yielding favorable results for the company and its investors. For this quarter, the company recently hit $758 million in sales, which is almost a 30 percent increase in ad revenue in comparison to the year before. As for the last 3 months, Twitter made 106 million in net income which shot up the company’s stock by 10 percent on Thursday following the earnings report.

Dorsey said the company is “achieving meaningful progress in our efforts to make Twitter a healthier and valuable everyday service.” He said Twitter is emphasizing “the long-term health of Twitter while growing the number of people who participate in public conversation.”