Twitter lost another 5 million users during the fourth quarter of 2018 but surpassed Wall Street’s sales and revenue expectations when the company reported its Q4 results on Thursday morning.
But most notably, the San Francisco-based company said it will stop reporting its monthly users following Q1 in favor of sharing “monetizable” daily active users; mDAU will account for “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 company said in its earnings release.
At the end of the fourth quarter, Twitter said it had 126 million mDAUs, an increase of 2 million users from the previous quarter and 11 million users year-over-year. This was the first time Twitter broke out its monthly active users.
Monthly active users continued to dwindle, hitting 321 million, a drop of 5 million users from the previous quarter. Twitter also lost 9 million monthly users during Q3.
For the three months ended Dec. 31, Twitter posted revenue of $909 million and earnings of 31 cents per share, both topping analyst estimates of $869.5 million in sales and 25 cents earnings per share. The company brought in $3 billion in revenue for all of 2018, marking a 25 percent increase year-over-year.
Despite beating analyst estimates, the company’s stock was hammered in pre-market trading, dropping nearly 8 percent to $31.50 per share. Twitter’s forecast of between $715 million to $775 million in Q1 revenue largely fell below analyst estimates of about $766 million.
“2018 is proof that our long-term strategy is working. Our efforts to improve health have delivered important results, and new product features like a single switch to move between latest and most relevant Tweets have been embraced by the people who use Twitter,” Twitter chief Jack Dorsey said in a statement.
He added: “We enter this year confident that we will continue to deliver strong performance by focusing on making Twitter a healthier and more conversational service.”
Heading into Thursday, Twitter had routinely shared the percentage growth of its daily user base each quarter without sharing the actual number of DAUs on its platform. Twitter, after adding another two million daily users this quarter, has increased its mDAUs in nine straight quarters. The company’s 126 million daily users falls below that of other social media companies like Snapchat, which has 186 million DAU, and isn’t in the same stratosphere as Facebook, which has more than 1.5 billion people logging in each day.
Twitter, in its earnings release, said its mDAU won’t be “comparable to current disclosures from other companies, many of whom share a more expansive metric that includes people who are not seeing ads.”
Twitter’s decision to jettison reporting monthly users fits a recent trend of major tech companies tweaking their reporting practices. Facebook executives, last week on the company’s earnings call, revealed they would soon stop reporting its growth in favor of sharing the total growth of its “family” of apps, which includes Instagram and WhatsApp. Apple has also stopped sharing how many iPhones it sells each quarter.
Twitter will hold a call at 8 a.m. ET to discuss its earnings.