Users flock to Twitter during pandemic but ad revenues fall

Twitter’s usage surged during the coronavirus pandemic and civil rights protests, adding 20m new daily users in its second quarter from the previous three months, but sales still fell as the internet group warned of a choppy advertising market.

Revenues dropped 19 per cent year on year to $683m, representing a less steep decline than in the March quarter but still falling short of Wall Street’s consensus expectations, which had been looking for around $700m for the three months ending in June.

While Twitter pointed to a “moderate recovery in advertising demand” since March’s turbulence, it said that many brands pulled back their spending again from mid-May to late June during the Black Lives Matter protests. Advertising revenue was down 15 per cent year-on-year in the last three weeks of June.

Still, Twitter’s shares jumped as much as 6 per cent in pre-market trading on Thursday as it reported that average monetisable daily active users rose 34 per cent year on year to 186m, far ahead of most analysts’ estimates.

Jack Dorsey, Twitter chief executive, credited both product improvements and news-driven usage for the accelerated growth.

A fall in advertising pricing outweighed the increased engagement but Twitter said it has now completed a vital IT system upgrade that should strengthen its offering to marketers.

“With a larger audience and progress in ads, we are even better positioned to deliver for advertisers when the live events and product launches that bring many people and advertisers to Twitter return to our lives,” said Ned Segal, Twitter finance chief.

In its second quarter, Twitter swung to a net loss of $1.2bn, primarily due to a deferred tax asset valuation and other non-cash expenses. Without those one-offs, Twitter said that its adjusted net loss was $127m, compared with $37m in adjusted net income in the same period last year.

Over the past week, Twitter has been scrambling to recover from a hack that targeted some of its most high-profile users, including Joe Biden, Elon Musk, Bill Gates and Jeff Bezos. Twitter said on Wednesday that private messages from up to 36 users were accessed during the attack.

“We moved quickly to address what happened, and have taken additional steps to improve resiliency against targeted social engineering attempts, implemented numerous safeguards to improve the security of our internal systems, and are working with law enforcement,” said Mr Dorsey on Thursday. “We understand our responsibilities and are committed to earning the trust of all of our stakeholders with our every action, including how we address this security issue.”