Twitter topped $1 billion in quarterly revenue for the first time in its history in the fourth quarter of 2019, tallying $1.01 billion, and the social network finished the period with 152 million monetizable daily active users.
The company said its 11% year-over-year revenue gain was driven by steady progress on revenue product and solid performance across most major geographies, pointing to particular strength in advertising in the U.S.
Overall, the company’s advertising revenue was $885 million in the fourth quarter, up 12% versus the same period in 2018.
Net income for the period was $119 million, down from $255 million in the fourth quarter of 2018. Twitter attributed part of the drop to the release of deferred tax assets valuation allowance in the year-ago quarter.
The company said in its shareholder letter, “We made steady progress in the fourth quarter on our two most significant revenue product initiatives. First, we continued our work to rebuild our core ad server. Over the course of 2019, we shipped new ad platform services designed to help us innovate faster and deliver better returns for advertisers. We remain focused on completing our ad server rebuild in the first half of 2020. We also made progress on our next-generation mobile application promotion product (expected to launch in 2020) and shipped remediations designed to help address the third-party measurement issues we encountered in the third quarter.”
Twitter continued, “In combination, these initiatives will solidify our existing ad products and position Twitter to provide more direct-response ad formats over time. We also believe we have a significant opportunity to help consumers benefit from a more personalized experience on Twitter, providing them with highly relevant content across both organic and promoted content.”
Revenue for the full year of 2019 was $3.46 billion, up 14% year-over-year, and net income was $1.47 billion, up from $1.21 billion.
Twitter’s total of 152 million mDAUs was up from 145 million at the end of the third quarter of 2019 and from 126 million at the end of 2018.
The company said average mDAUs in the U.S. were 31 million, up from 30 million in the previous quarter and 27 million in the prior-year period. Internationally, those numbers were 121 million, 115 million and 99 million, respectively.
Twitter attributed its mDAU gains to product improvements, including increased relevance in timeline and notifications.
Total ad engagements on Twitter’s platform were up 29% year-over-year, fueled primarily by increased impressions drive by audience growth and by improved click-through rates across the majority of its ad types.
Cost per engagement fell 13%, which Twitter said reflected the continued shift to video ad formats and like-for-like price decreases across most formats.
Twitter added that large and mid-tier customers continued to represent a sizable majority of its ad revenue, but growth continued at its self-serve channel.
The social network outlined its progress on the user side in its shareholder letter: “We are also making it easier for people to find what they are looking for when they come to Twitter by better organizing content around Topics and events, and making it easier to follow and join conversations. In the fourth quarter, we made it easier to find the best content on Twitter by allowing people to follow Topics, not just accounts. Now, even if people don’t know which accounts to follow, we recommend relevant Topics so people can see the best tweets regarding those Topics, regardless of whether they follow the person who tweeted. As of Dec. 31, 2019, there were more than 1,700 Topics that people could follow in six languages, with new Topics being added each week. Topics are suggested automatically in the timeline, and can also be found through the Topics section in the side dashboard on mobile, or through searching for an available Topic.”
Twitter continued, “We are also making it easier for people to create and share great timelines about the things that matter to them through Lists. In the fourth quarter, we launched the ability to share Lists on both iOS and Android and added account recommendations that suggest new relevant accounts to Lists to keep them up to date.”
The company also said its efforts to protect the integrity of election-related conversations and limit the spread of unhealthy content led to a 27% decline in bystander reports on tweets that violated its terms of service.
Looking ahead to the rest of 2020, Twitter outlined its four objectives: increasing development velocity and trust; increasing healthy public conversation; increasing revenue durability; and enabling anyone, anywhere to work at Twitter.
The company said that in order to accomplish these goals, it expects to grow headcount by at least 20% this year, particularly in the areas of engineering, product, design and research, which will also lead to a 20% rise in total costs and expenses for the year.
Twitter added, “Our investments also include building out a new data center in 2020 to add capacity to support audience and revenue growth. While the timing of these investments will be variable and spread out over multiple quarters, we expect capital expenditures to be weighted toward the second half of the year.”
CEO Jack Dorsey said in the company’s earnings release, “Entering 2020, we are building on our momentum—learning faster, prioritizing better, shipping more and hiring remarkable talent—all of which put us in a stronger position as we address the challenges and opportunities ahead.”