Twitter Inc. has more users than ever, but its advertising business was hit hard by the Covid-19 pandemic at the end of the first quarter.
“In this difficult time, Twitter’s purpose is proving more vital than ever. We are helping the world stay informed,and providing a unique way for people to come together to help or simply entertain and remind one another of our connections. We’ve delivered our strongest ever year over year mDAU growth,” said Jack Dorsey, Twitter’s CEO. “Public conversation can help the world learn faster, solve common problems, and realize we’re all in this together. Our task now is tomake sure we retain that connection over the long term with the many people new to Twitter.”
“Revenue was $808 million in Q1, up 3% year over year, reflecting a strong start to the quarter that was impacted by widespread economic disruption related to COVID-19 in March,” said Ned Segal, Twitter’s CFO. “We are shifting resources and priorities to increase focus on our revenue products and reduce expense growth, ensuring our resources are allocated against our most important work. Revenue product has been elevated to our top company priority, as the current environment validates and creates even more urgency around delivering more direct response ad formats.”
The social-media company reported revenue of $808 million in the period. From March 11 to the end of the quarter, sales were down 27% year-over-year.
About 84% of Twitter’s revenue comes from ads on its service and partner apps, and those sales were 27% lower in the last three weeks of March than the same period in 2019, the company said on Thursday.
The company plans to reduce costs by cutting down on hiring and eliminating travel and events that are no longer necessary given employees are working from home. It still plans to build a new data center in 2020 as was previously announced.
Twitter reported a net loss of $8 million, its first unprofitable quarter in more than two years.
The pandemic has led to record usage, however. Twitter now has 166 million daily users, up from 152 million at the end of 2019, and 24% higher than a year earlier.
More users did not lead to a similar increase in sales, which rose just 3% year-over-year. Part of that was the result of an industrywide ad slump as marketers pull back on spending.
Twitter provided neither its usual guidance on sales for the current quarter nor any comment on whether U.S. ad sales had bounced back as well. It did warn of smaller increases in non-advertising revenue. Making development of ad tools its No. 1 priority also could complicate efforts to maintain user growth late into the year.