Twitter Admits of Overstating Monthly-User Figures For 3 Years

Alan Olson
October 28, 2017

San Francisco-based Twitter also disclosed in its quarterly earnings report that it had discovered an error in the way it had calculated the size of its user base since 2014 and revised its estimates downwards, but that the difference amounted to less than 1%. Worryingly for the company, its USA advertising revenues fell 11% compared to the same period previous year, although this was more than offset by booming worldwide advertising advertising revenues, which grew by 6%.

Shares of Twitter soared over 18 percent on Thursday after the company reported that it expects to be profitable for the first time ever during the next fiscal quarter.

The company took in $590 million in revenue, which is down four percent from a year ago but still $3 million more than analysts expected.

Monthly active users: 330 million, up from 326 million in the previous quarter and an increase of 4% from the year-ago period.

More importantly, Twitter's daily active user count increased by an astonishing 14%, the fourth consecutive quarter of double-digit growth.

These results are a much-needed improvement over Twitter's dismal performance last quarter, when it didn't add any new users.

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Twitter Inc. has admitted to incorrectly reporting its single most important metric, monthly active users (MAUs), for almost three years.

Another reason Wall Street is happy?

But the company said it had overstated monthly users for the past three years. The third-party app that led to the monthly user miscalculation, Digits, allowed Twitter users to log into other online services using their Twitter credentials. The company said it didn't have exact data for periods before the fourth quarter of 2016, but that those losses would be the same or smaller than the four quarters reported.

Twitter recently announced that it will give users more power to report unwanted sexual advances. Despite seeing its revenue drop 4 percent year-over-year, Twitter slashed its losses and hinted at turning a profit by the end of 2017.

On a call with investors, CEO Jack Dorsey reiterated that Twitter is intently focused on improving safety for users.

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