Twitter loses millions of users, but still makes record quarterly revenue

Twitter is making more money than ever before—even as it loses monthly active users.

On Thursday, the company announced its latest earnings report, and it was loaded with positive financial news. Twitter reported a record-setting revenue of $909 million in the fourth quarter, a 24-percent increase compared to this time last year. The company also announced it earned $3 billion in revenue last year, a 25 percent increase from 2017.

But even while bringing in record profits, the social media behemoth still faces a major problem: a decline in monthly users.

Twitter reported a total of 321 million monthly users at the end of last year, which means that the microblogging service lost a whopping 5 million users in the last quarter. Twitter’s monthly user base has dropped down the levels it hasn’t seen since the end of 2016. Monthly users have declined on Twitter every quarter since Q1 of last year. It wasn’t exactly growing exponentially before that time either.

One way Twitter will deal with this steady decline in monthly active users is to simply stop reporting them. The company announced that after 2019’s first quarter report, it will no longer report monthly users on the platform.

In place of monthly users, Twitter will report a new metric it’s calling “monetizable daily active users.”

According to Twitter’s earnings report, “Monetizable DAU are Twitter users who log in and access Twitter on any given day through Twitter.com or our Twitter applications that are able to show ads.”

The reason for the change is likely due to the fact that this new metric shows user growth on the platform. Twitter reports that it has 126 million monetizable daily active users, which is an increase from 115 million mDAU just one year prior.

To be fair, one of the reasons for the decline in its monthly users is a conscience choice the company made to clean bots and spam accounts from its platform. After one of the service’s biggest purges of these types of accounts last year, Twitter saw its biggest drop in monthly active users. Yet, during this time it also saw its daily active user metric rise.

While Twitter is a much smaller than, say, Facebook with its 1.52 billion daily active users, its latest metrics might actually be the most accurate portrayal of any social network’s user base. A report that came out just last month claims that half of Facebook’s users may very well be fake.

This doesn’t totally absolve Twitter from its problems, however. A health, growing platform would still record some sort of positive user growth. In fact, Snapchat, a younger and mobile-only platform, just reported a larger daily active userbase than Twitter. There’s also no good excuse for Twitter to be less transparent with its move to no longer report its monthly user numbers in the future.

Twitter recently stated that one of its main priorities going forward is conversation on the platform. With this new information on how the company is focusing on daily active users, it makes sense. Regardless, the social network still desperately needs to figure out a way to grow.