Twitter Reports User Drop But Remains Profitable In Q2 2018

Twitter on Friday published its consolidated financial report for the second quarter of the year, revealing a minor user drop but touting maintained profitability as one of its largest achievements over the three-month period ending June 30. After more than a decade of continuous losses, the company recently concluded its third consecutive profitable quarter, with its Q2 bottom line being $100 million in the black on a revenue of $711 million. Its turnover increased 24-percent annually, whereas its monthly active user count ended on 335 million people, down a million sequentially but up nine million compared to the same period last year.

The sequential drop still ended up disappointing investors, especially as most industry watchers were predicting a minor user base increase instead of a drop. The San Francisco, California-based company acknowledged the fact that it missed its targets but pointed to the General Data Protection Regulation which went into effect in the European Union in late May and forced to it reallocate some of its resources that were previously dedicated to user growth toward ensuring its platform is in full compliance with one of the strictest legislative frameworks regulating digital data collection on the planet. While the move affected growth in the near term, Twitter remains adamant it made the right call, having told investors the GDPR teams and those seeking to improve the overall quality of the platform will eventually return to the task of growing the service.

Twitter's decision to not embrace paid SMS carrier partnerships in favor of Twitter Lite and other solutions in certain markets also affected its second-quarter growth but won't affect its count of daily active users as that metric only includes accounts operated through the company's own apps. Investors appear to be skeptical about Twitter's promises, especially given the timing of President Trump's latest attack on the platform, with its stock presently trading at nearly 19-percent down.

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