Investors loved Twitter’s numbers last quarter, except for one metric that raised eyebrows. Now Twitter has revised that metric and added another. Net result: Twitter says its user numbers are better than they looked a couple weeks ago.
When Twitter announced its Q2 earnings, it said that as many as 14 percent of its users — 38 million people — were exclusively using third-party applications that could automatically ping Twitter for updates. In other words, these “active” users weren’t actually visiting Twitter.com or Twitter’s mobile app.
That number, which had steadily increased for more than a year, worried some investors, because that meant those users didn’t see Twitter’s ads. Some investors were also concerned that some of those users were really “bots.” Twitter’s management fielded two questions about the number during its public conference call.
Twitter has now revised its estimate. In its second quarter 10-Q filing with the Securities and Exchange Commission today, it said it believes only 11 percent of its monthly users are only using third-party apps. And Twitter added a new number: It says it thinks that “only up to approximately 8.5 percent of all active users” are using apps with the ability to get automatic updates.
Translation: More people can see our ads than we thought — 89 percent instead of 86 percent. And if you’re worried about bots, those numbers aren’t so bad, either.
A Twitter rep declined to comment on the changes. A change in Twitter’s investor slide deck, though, makes reference to the changes: “Updated as of August 11, 2014. Twitter previously indicated that for this period approximately 14 percent of all active users used applications that have the capability to automatically contact our servers for regular updates, but later discovered that this number included certain users who accessed Twitter through owned and operated applications.”
It will be interesting to see if Wall Street responds to the changes, which may be the first visible sign of new CFO Anthony Noto’s presence. Longer-term, the company is trying to sell investors on the idea that Twitter’s audience could be much larger than its active user base.
The company has discussed the notion of presenting new metrics that would indicate a broader reach, but has yet to unveil them. But CEO Dick Costolo did tell investors that Twitter’s overall audience could be two to three times as large as its 271 million active users.
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