First, on users – Twitter’s monetizable Daily Active User (mDAU) count is now 206 million, an 11% increase year-on-year and an additional 7 million on its 1st quarter figure.
As you can see here, all of this growth has come from international markets, with Twitter’s mDAU count declining slightly in the US compared to last quarter (38 million in T1
This could be the result of the much discussed ‘Trump work‘, with many speculating that the former president’s affinity for the platform likely spurred increased usage. Which may or may not be correct, but with Trump now out of the headlines, there may be fewer people discussing the issues that trigger more tweets, which could have a resulting impact.
Whether this becomes a permanent concern is another question. Twitter only added one million new US users in the last year, and with the company deriving the majority of its revenue from the US market, this could become a problem if local growth continues to stagnate. Twitter also saw a 69% increase in international revenue, which partially alleviates this concern, but it will still be something to watch moving forward.
Another area of concern could be the platform’s growth in India, which has also been a key driver of its overall usage statistics. Use of Twitter in India jumped 74% during the pandemic, with the region 18.8 million users making it now the company’s third-largest user market behind the United States and Japan.
India is a key growth market for all social applications, but more recently Twitter has in conflict with Indian regulators on new rules that give the Indian government more control over local content removals and user inquiries. After initially rejecting the updated requirements, Twitter has now said it comply with the decision, but tensions arise between the two parties. If the Indian government were to take further action against Twitter, which it has repeatedly threatened, it could deal a major blow to its broader growth momentum.
But that’s not yet the case, and the numbers show that Twitter may well be on track to meet its growth projections, with its renewed focus on product development helping to spark new interest – though, as the fleets, they don’t all go according to plan.
Last week, Twitter announced that it would be withdrawal of fleets next month, but the advantage of this will be to focus more on its audio spaces, which will now take precedence over food real estate. Twitter is also adding a new dedicated Spaces tab in the app, as it seeks to capitalize on the audio social trend and boost user engagement.
Some will see Fleets as a failure, but the fact that Twitter is trying and iterating so quickly seems positive, even if it takes up development resources as a result. Twitter reports that research and development spending increased 39% during the period.
In terms of revenue, Twitter posted a strong second quarter result of $ 1.19 billion, a 74% year-over-year increase.
According to Twitter:
“Total international revenue was $ 537 million, an increase of 69%, or 64% at constant exchange rates. Japan remains our second market, growing 40% and contributing $ 151 million, or 13% of total sales in the second quarter. Japan’s revenue declined on a sequential basis in the second quarter, reflecting the typical seasonality of a country. “
The vast majority of Twitter’s revenue was generated from ads ($ 1.05 billion), which sparked renewed interest in the wake of the e-commerce boom caused by the pandemic. This is expected to remain strong in the second half of the year (after the Olympics) as the vaccine rollout continues and more regions seek to fully reopen and return to normal functioning.
“[We saw] Strong demand from advertisers looking to launch new products and services and connect with what’s happening on Twitter in a number of key industry verticals including tech, automotive, media, entertainment and fashion. Our strong momentum in MAP and performance advertising also continued in the second quarter. “
Twitter also notes that SMB customers increased their overall ad spend in the quarter, while total ad engagements rose 32%, driven by more users and larger ad inventory.
“The cost per engagement (CPE) increased by 42%, mainly due to comparable price increases in most ad formats due to the impact of COVID last year. “
So, due to the slowdown in Q2 2020, Twitter says the increase here is disproportionate, but it may be worth watching your Twitter CPM numbers anyway.
Another particularly interesting element is Blue twitter, the platform’s new subscription offer, currently being tested in Australia and Canada. The option is Twitter’s first big step towards direct user monetization, which could provide another revenue stream – if users are willing to pay for additional tweet elements.
So, are people paying so far?
Twitter included this generic note on Blue’s take-up in its letter to shareholders:
“We were encouraged by the initial response and look forward to innovating and further developing this new revenue stream with additional features, geographic expansion and other offerings as part of our revenue sustainability strategy. “
Which doesn’t give a lot of information (Twitter also noted similar things about Fleets in its First trimester update), but it’s also probably too early to tell at this point, as the offer was only available last month.
Also, if you’re wondering why Twitter recently inserted more topic prompts in your tweet feed:
“We also improved our ability to quickly connect people to the best conversations about their interests by better leveraging onboarding signals and introducing interactive commentary on Topic Tweets into the welcome timeline. As a result, 41% of new customers in supported languages now follow topics when they sign up, with an average of around 14 topics each. “
Topics therefore strive to improve Twitter content discovery, which could help maximize engagement. That said, Twitter noted recently that it is reduce the frequency of topic prompts in the feed after user complaints.
Overall, this is a strong update from Twitter, although it does benefit from a slowdown in Q2 2020, in terms of a year-over-year comparison. I don’t know how well this positions the company to achieve its goal of 123 million additional users by 2023, but its sales appear to be on track and in the right direction.