Despite growing ad sales, Twitter Inc. still has a growth problem. The social network added only 4 million new users in the third quarter, which is a 1.3% increase from the previous quarter.
In the wake of its slow user growth, Twitter this month laid off 8% of its workforce. “While this decision was difficult, we strongly believe we can move faster with this new org structure and smaller, nimbler teams,” CEO Jack Dorsey, who shed the interim title earlier this month, said during a conference call with analysts.
Twitter’s slow user growth continues to overshadow the social network’s advertising revenue gains. The social network’s ad revenue grew 57.6% in the third quarter compared with the same period a year earlier.
Twitter grew its ad revenue by rolling out a number of new products and formats to lure retailers and other marketers to its platform, said Adam Bain, the social network’s chief operating officer. For instance, during the quarter it introduced a new policy in which advertisers can choose to only pay for videos that are 100% in view for at least three seconds. The change helped reduce marketers’ video ad costs 84%, he said.
Twitter also is focused on making its platform easier to use, which it believes will help attract new users. Among Twitter’s biggest initiatives is Moments, an attempt launched earlier this month to curate the avalanche of information flowing across its platform about major events, including sporting events, awards shows, breaking news or cultural memes.
For the third quarter ended Sept. 30, Twitter reported:
- $569.0 million in ad revenue, up 57.6% from $361.0 million a year earlier.
- $513.0 million in total revenue, up 60.3% from $320.0 million a year earlier.
- Mobile advertising accounted for roughly 86% of advertising revenue, or about $441.2 million, up 62.2% from $272.0 million in the second quarter of 2014.
- 320 million monthly active users, up 11.5% from 287 million in the same period a year earlier, but up only 1.3% from 316 million in the second quarter.
- Roughly 256 million consumers, 80% of Twitter’s monthly active users, accessed Twitter from a mobile device.
- $131.7 million net loss compared with a $175.5 million loss a year earlier.
For the first three quarters of the year, Twitter reported:
- $1.51 billion in total revenue, up 63.4% from $923.9 million a year earlier.
- $1.35 billion in total revenue, up 65.3% from $816.7million.
- $430.8 million net loss compared with a $452.5 million loss a year earlier.