Twitter has admitted to overstating its audience numbers of nearly two million users for nearly three years, as it reported its first quarterly results since the social media company agreed to… 44 billion dollar acquisition From Tesla CEO Elon Musk.
This is the second time Twitter has miscalculated its user numbers, after discovering in 2017 that a similar error had gone unnoticed for three years.
The latest bug was exposed just days after Twitter approved Musk’s debt purchase. The entrepreneur has hinted at plans to reshape Twitter’s business model, which currently relies on advertising for more than 90 percent of its revenue.
Looking at the deal, Twitter’s first-quarter earnings report provided few comments and included no guidance for the rest of the year. The company is also dropping its usual phone call with analysts.
First-quarter revenue of $1.2 billion came in just below Wall Street expectations, which Twitter blamed on “war-related headwinds.”
However, Twitter’s Monetized Daily Active Users (mDAU), its own unique metric for tracking its audience, did better than investors expected at 229 million, with annual growth of 6.4 percent in the US and 18.1 percent in the rest. . From the world.
Net income jumped to $513 million, thanks to a one-time benefit from the $1 billion sale of mobile ad unit MoPub to AppLovin, which closed in January.
Shares in Twitter were up about 1 percent to $49.05 in early trading, down from $54.20 per share at $49.05. musk He agreed to buy the company.
Twitter also disclosed what it described as a “mistake” introduced in the first quarter of 2019 that “led to an overestimation of MDAU” that went undetected for nearly three years.
The difference between the numbers reported by Twitter over the past year and the real number ranged between 1.4 million and 1.9 million, or just under 1 percent of the total. He has not made a reconciliation for 2019 or most of 2020.
Advertisers Rely on accurate estimates of audience size when planning their campaigns.
“In March 2019, we launched a feature that allows people to link multiple separate accounts together in order to easily switch between accounts,” the company explained. “An error occurred at the time, such that actions taken via the primary account resulted in all linked accounts being counted as mDAU.”
Twitter said after an internal review that fake or spam accounts accounted for “less than 5 percent” of its mDAU during the third quarter. Musk said he plans to crack down on “bots” or fake accounts when he takes charge.
In 2017, Twitter had to cut previously reported user numbers since 2014 by as much as 2 million per quarter, after discovering that it was mistakenly counting activity from third-party apps as unique users.