After three profitable quarters in a row, Twitter has finally proven to investors it knows how to earn money. Unfortunately, it hasn't proven it knows how to keep its user base from declining.
In its Q2 2018 letter to shareholders, Twitter said it recorded a $100 million of net income and $711 million in revenue, a 24% year-over-year increase.
However, despite an 11% year-over-year growth in dailyactive users (the company did not provide an exact figure for this metric), Twitter had 335 million total average monthly active users (MAUs), down from 336 million in the previous quarter.
SEE ALSO:The biggest winners and losers after Twitter's massive purgeThe rise in profitability comes partially from favorable impact of foreign exchange rates and partially from strong growth in advertising profits, especially from video ads.
The stagnant user base is another matter. Monthly active users have been lingering around 330 million for a year now, and the shareholders weren't pleased with the lack of progress, as evident from Twitter's stock price which is currently down 15.28%.
To Twitter's credit, the dwindling user base is partially due to its own measures to battle spammy and malicious accounts.
"In Q2, we introduced new tools to address behaviors that distort and distract from the public conversation, and they’re having a positive impact — results from early experiments show a 4% drop in abuse reports from search and 8% fewer abuse reports from conversations, indicating that fewer people may be seeing tweets that disrupt their experience on Twitter," the shareholder letter says. Worse, Twitter expects monthly active users to decline further in Q3, to the tune of "mid-single-digit millions."
Twitter's battle against spam is a much-needed one, but it'd still be nice to see more actual, live, non-malicious persons joining the platform.
Twitter's earnings report comes two days after Facebook's stock dropped 19 percent — wiping $119 billion off the social media giant's market cap -- following an earnings report that showed daily active users flatlining overall and actually dropping in Europe.
