Twitter is growing faster than it ever has, with the company crossing the 150 million daily users threshold — and posting its first quarter with $1 billion in revenue — when it reported its Q4 earnings on Thursday morning. Those two milestones appeared to be enough to satiate Wall Street, with Twitter’s stock receiving a 5% boost in pre-market trading, despite the company falling short of earnings estimates.
For Q4, Twitter reported sales of $1.01 billion, marking an 11% year-over-year increase and edging past analyst revenue projections of $997 million. Its earnings of $0.25 per share came in below estimates of $0.29 EPS.
Perhaps most importantly for investors, Twitter’s “monetizable daily active users,” its internal metric for DAUs, increased 21% year-over-year to 152 million; Twitter entered the quarter with 145 million daily users. The 21% year-over-year increase was the best-ever for the company, according to Twitter’s report. Twitter attributed the new users, in part, to its work connecting users to their favorite topics.
“2019 was a great year for Twitter. Our work to increase relevance and ease of use delivered 21% mDAU growth in Q4, with more than half of the 26 million mDAU added in 2019 directly driven by product improvements,” Twitter chief Jack Dorsey said in a statement. “Entering 2020, we are building on our momentum — learning faster, prioritizing better, shipping more and hiring remarkable talent. All of which put us in a stronger position as we address the challenges and opportunities ahead.”
Twitter’s stock jumped about 5% soon after the report came out, pushing it to $35 per share.
The company said it “continued to make progress on health” during the fourth quarter, saying it’s started to “proactively limit the visibility of unhealthy content.” This led to a 27% decrease in users having to report other users for violating the company’s rules.
Notably, Twitter decided to ban nearly all political advertising during the fourth quarter. Dorsey, explaining the move, said it would address the “challenges to civic discourse” internet political ads present, including “machine learning-based optimization of messaging and micro-targeting, unchecked misleading information, and deep fakes.” The ban, which went into place in late November, encompasses candidate ads and issue ads. Ads encouraging people to register to vote are still permitted.
Twitter’s decision put the company in stark contrast to Facebook, which has received heavy criticism in recent months for its decision to not fact-check political ads. Facebook CEO Mark Zuckerberg said his company’s move was inspired by the First Amendment. “As a principle,” Zuckerberg said during an October speech at Georgetown University, “in a democracy, I believe people should decide what is credible, not tech companies.”
Dorsey and Twitter received plenty of kudos for banning political ads, with pundits from CNN, The Washington Post and The New York Times all championing the move. But Dorsey’s decision was also made easier because of how inconsequential political ads are in terms of Twitter’s overall ad business. Twitter CFO Ned Segal, in October, shared that the company made about $3 million from political ads during the 2018 midterm election cycle — coming out to about 0.46% of the $650 million in total ad revenue Twitter received during the third quarter of 2018.