On The Fly: What to watch in Twitter earnings report
Twitter (TWTR) is scheduled to report results of its fourth fiscal quarter before the market open on February 8, with a conference call scheduled for 8:00 am ET. What to watch: 1. USER METRICS: Twitter's monthly active users, or MAUs, are a closely watched measure of its popularity and growth potential. Last quarter, the company reported global MAUs rose 1% sequentially to 330M users and were up 5% year-over-year. Meanwhile the company's U.S. base increased 2% sequentially to 69M users and 4% year-over-year. The company also reported that it found issues with its prior MAU reporting, saying, "We discovered that since the fourth quarter of 2014 we had included users of certain third-party applications as Twitter MAUs that should not have been considered MAUs. These third-party applications used Digits, a software development kit of our now-divested Fabric platform, that allowed third-party applications to send authentication messages via SMS through our systems, which did not relate to activity on the Twitter platform. Due to our data retention policies, we do not have data to reconcile periods prior to the fourth quarter of 2016, but our estimates suggest the prior period adjustments are smaller than those in the fourth quarter of 2016." Watch for updated numbers in the report, as well as management commentary on user engagement. 2. AD REVENUE: Key to Twitter's business model is its ability to drive advertisers to the platform. In Q3, the company reported a roughly 8% fall in ad revenue versus last year. In October, Twitter announced steps to dramatically increase transparency for all ads on Twitter, including political ads and issue-based ads. The company said it will also be improving controls for customers and adopting stricter advertising policies as well as launching a transparency center that will offer visibility into who is advertising on Twitter, details behind those ads, and tools to share feedback. The company also announced it would off-board ads from Russia Today, saying, ""Twitter has made the policy decision to off-board advertising from all accounts owned by Russia Today, or RT, and Sputnik, effective immediately. This decision was based on the retrospective work we've been doing around the 2016 U.S. election and the U.S. intelligence community's conclusion that both RT and Sputnik attempted to interfere with the election on behalf of the Russian government." 3. NEW FEATURES, UPDATED POLICY: Since Jack Dorsey's return as CEO, Twitter has increasingly pivoted into new content such as live-streamed events and sports while tweaking its core product. In October, the company expanded its definition of non-consensual nudity, updated its policy around hate and added information for suspended accounts. Twitter also announced in October it would launch policies on violent groups, hateful imagery and hate symbols on November 22. On November 7, the company announced the roll out of the expansion of Tweet character limits to 280 from 140 to all languages "where cramming was an issue" and on November 16, Twitter said it would begin removing verification badges from users who violate its rules. The company said, "We're working on a new authentication and verification program. In the meantime, we are not accepting any public submissions for verification and have introduced new guidelines for the program. We are conducting an initial review of verified accounts and will remove verification from accounts whose behavior does not fall within these new guidelines." Additionally, on December 12, Twitter announced that it is making it simpler to thread Tweets together and to find threads by adding a plus button in the composer, so users can connect thoughts and publish threaded Tweets all at the same time. Users can continue adding more Tweets to a published thread at any time with the new "Add another Tweet" button.