Twitter In Q3 2013: Emphatic Revenue Growth By 120.8% Nullified By Record 153.8% Loss [REPORT]

Micro-blogging site Twitter’s Q3,2013 report has revealed interesting facts and figures about its ever-growing revenue and loss rate. The user base too hasn’t increased much when compared to earlier quarters. Twitter is trying to provide a clear set notion to investors and public about its returns on long-term basis, ahead of its IPO launch.

Twitter Spikes Up In Loss Rate, Invests More On R&D And Workforce

  • Twitter’s never-ending R & D expenditure is lowering the profit margins for the firm from past few years. During initial filing of s-1 report, Twitter had revealed net loss in Q2, 2013 as 42 Million. This figure just soared up by 153.8% and recorded loss of 64.6 Million in Q3, 2013, which is close to the net loss in first half of 2013 (69.2 Million). If we compare data of YOY basis, the overall loss in first 3 quarters of 2013 ($133.8 Million)  is almost twice the year loss in 2012 (over $70 Million).
  • Twitter is investing a lot on enhancement of quality workforce especially engineers. In order to boost R&D activity, retain the talent group and attract fresh talent, nearly $87.3 Million was spent in Q3, 2013 alone, which is very high compared to $111.8 Million during first half of 2013.
  • Twitter has over 2,300 employees as of September 2013, and spent close to $30 Million in stock offering for employees. Budget on R&D especially employee expenditure figure is expected to soar even higher in future as company is facing tough competition from other fast growing companies in hiring quality engineers ,product designers and marketing personnel. Company is offering high packages to retain/attract talented pool.

Decline In User Growth, Continues To Be Center For Elite Group Of Society

  • Twitter’ active user base increased by 6.13% in Q3,2013 and overall figure rested above 232 Million. Earlier in Q1, 2013 10.27% growth took place in user base and in Q2 growth rate stumbled down to 6.86%. Although the growth index in Q3 ,2013 is lower than Q2 but drop in growth rate is less significant when compared to Q2, 2013. In U.S, Twitter user base increased from 49.2 Million to 52 Million which is quite significant compared to increment of just 1.2 Million in Q2 2013 (48 Million to 49.2 million). Still Twitter team has to work hard to accelerate the churn and attract new users.twitter's user base  growth

twitter's US user base

Overall Revenue Rose By 120.8%, Nearly 48 Billion Impressions Were Recorded For Tweets Hosted On ‘Outside Twitter Platform’

  • The main factor which is making investors restore belief in Twitter’ growth is its overall revenue which is continuously zooming high on YOY basis. In Q3, 2013 overall revenue rested at $168 Million which records a significant increase when compared to $139 Million in Q2, 2013. Majority of advertising happens through 3rd party firms which decreases the margin of profit for Twitter. It’s important for Twitter to acquaint all firms, online brands about usage of Twitter as an effective advertising tool.
  • Share of Mobile advertising in overall revenue share grew up to 70% which is fair increment when compared to 65% in Q2, 2013. Also the Go-Mobile era  is likely to boost up mobile revenue share in future and user base will increase due to Twitter’s easy adaptability on mobile platform compared to other social media sites.
  • An exploding 48 Billion impressions were recorded compared to 30 billion in previous quarter for tweets which were shown outside Twitter’s own property. This implies majority of firms consider Twitter as a better tool in spreading awareness about their brands and create better user experience by displaying online Twitter gossips about their firm on their website. More than near 6 million websites have integrated with Twitter,  adding value to our user experience by contributing content to Twitter’s Platform. Majority of trusted sources such as Times of India use Twitter as a platform for content distribution.Over 3 Million applications have been registered by developers to enable them to integrate with Twitter platform and leverage Twitter content to enhance and extend their applications in creative ways.

 Growth Prospective For World’s Leading Micro-Blogging Site

  • If we talk about growth prospective in user base of Twitter, it continues to be center of attraction for Elite group of society, and average person is finding it hard to digest its wild-fire features such as Tweet, Re-tweet. People still find Twitter as blogging site for celebrity or high-class people as they would have larger audience to listen to their views. Outreach of your status/tweet is very limited when compared to Facebook and user should be artistic enough to express himself within 140 chars.
  • Majority of registered users are growing inactive due to its unfiltered feed/tweets feature. Sometimes users end up missing the tweet/updates from their dearest ones who may tweet very rarely. One has to dig deep down to view the tweets from certain group of friends or relatives who might occasionally tweet. This would discourage users from following large number of people.
  • Twitter’s dominance as mainstay in Television gossips is sort of keeping the registered users involved on the micro-blogging site.
  • Twitter team is stressing more on designing better interface to avoid disruption of user experience due to promoted products of Twitter (Promoted Tweets, Promoted trends, promoted accounts). Introduction of ‘Interest graph’ on Twitter has created anxiety among advertisers to invest more on ad-campaigns on leading Micro-blogging site. The Interest Graph maps, among other things, interests based on users followed and actions taken on Twitter platform, such as Tweets created and engagement with Tweets. Interest Graph produces a real-time signal of a user’s interests, enhancing the relevance of the ads Twitter can display for users and enhancing targeting capabilities of an advertisement.
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