The Turnaround Which Is Taking Time: Twitter Inc (TWTR)

Share on FacebookTweet about this on TwitterShare on Google+Share on RedditShare on LinkedInPrint this pageEmail this to someone

Investors were unhappy with the way Twitter Inc (NYSE:TWTR) was performing during former CEO Dick Costolo’s stint. However, he resigned after lot of hue and cry. That’s when one of the co-founders Jack Dorsey took over as CEO of the company with lot of promise. It’s been more than a year since Dorsey became CEO. However, the company continues to struggle and investors continue to question the way forward? Investors have written-off the company at some point or other.

Report Card

Jack Dorsey had lot to do when he took over and it is imperative to note that he has made considerable amount of progress on all the main issues. Twitter Inc (NYSE:TWTR) was successful in refining its services by increasing length of characters for Direct Messages along with few other achievements.

What changes Twitter Inc (NYSE:TWTR) made in last one year?

  • Started using algorithm to prioritize tweets.
  • Integrated Periscope.
  • Twitter has signed multiple deals with media companies to show football leagues, Republican, and Democratic conventions, Live streaming of Bloomberg TV shows, Thursday night NFL games during this fall, live streaming for content created by Pac-12 Universities.
  • Added Bret Taylor from Facebook Inc (NASDAQ:FB) to its board. He brings strong technical expertise which existing board members lack.

Have the changes yield results?

Revenue Chart

The answer to that question is No. Considering revenue has fallen, Net Income improved while Profit margin was constant in previous quarter. How has cash flow fared?

Financials

The company would definitely like to improve its performance when it comes to Cash Flow from operating activities which decreased significantly. However, Net Change in Cash was overall positive compared to quarter ending in December’15.

Impact of changes

Over 217.8M users accessed Twitter at least once in United States during June’16 which was a reach of 88.3%

On average 90.4M users used the platform on daily basis in June’16. According Verto Stickiness Index yielded a rank of 41.5 percent.

Notes: U.S. Online Adult Population (ages 18+). *The Verto Stickiness Index (VSI) compares daily users with monthly users to reflect the active, loyal, and engaged part of the audience. The higher the stickiness, the bigger the share of daily users versus the monthly users.

Average time per session was around 4.1 minutes

Twitter’s user based is diversified with 47 percent of male and 53 percent of female users

Twitter’s top brands in terms of monthly users include:

Twitter

Monthly users: 168.0M users; Average time spent per user per month: 1.0 hours

Sessions per user per month: 17; Average session duration: 3.6 minutes

Vine

Monthly users: 28.5M users; Average time spent per user per month: 0.3 hours

Sessions per user per month: 3; Average session duration: 5.0 minutes

Periscope

Monthly users: 5.6M users; Average time spent per user per month: 0.5 hours

Sessions per user per month: 8; Average session duration: 3.5 minutes

According to Verto’s CEO

“Twitter is in an interesting spot. On the one hand, it battles as a major ad platform for revenues available in the mobile app install advertising market against the likes of Facebook and Google. On the other hand, its use cases and mobile-centric nature put it more into the category of messaging apps. In fact, based on Verto data, Twitter is more of a feeder for messaging apps rather than a replacement for or competition with them. Timely content is key for Twitter. There have been a number of new features and usability changes in Twitter’s mobile app lately, and it will be interesting to see if they are able to improve their 42% Verto Stickiness Index ranking up towards 50-60% – which is an extremely good level for mobile apps to achieve (e.g. Facebook is at 75%). Finally, Twitter users only spend 1.2 hours per month on Twitter – mainly reading and consuming content rather than creating content. If they can fix these challenges, they can also improve the metrics for their engagement and further also monetization,” says Dr. Hannu Verkasalo, CEO and founder of Verto Analytics.

Conclusion:

Twitter Inc (NYSE:TWTR) continues to make progress. There has been good response from users while investors continue to show confidence on Jack Dorsey as CEO.

Viraj Shah

Viraj Shah has completed M.Com (Finance) and is currently pursuing his CFP. He tracks US markets along with other global markets like India very closely. He is very passionate about stocks, real estate, and technology. He also believes that money can always be made in the market.

You may also like...

Read previous post:
Twitter Inc (NYSE:TWTR)
Trending Monday Reads: Twitter Inc. (TWTR), Tesla Motors Inc (TSLA), Robots, and Oil

After a long weekend we are back on Monday morning with some interesting reads in the world of Business, Technology,...

Close