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Technology

Can Twitter Keep Adding This Many New Users?

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By Paul Ausick Updated Published
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twitter-bird-blue-on-white

courtesy of Twitter
When Twitter Inc. (NYSE: TWTR) announced its second-quarter earnings late last month, the company estimated that 14% of its monthly active users (MAUs) used a third-party application to access the company’s micro-blog through bots. In its Form 10-Q filing with the U.S. Securities and Exchange Commission on Monday, the company revised that number down to 11%.

The implications are significant. Of the 271 million MAUs reported for the second quarter, the difference between 14% and 11% is about 8.1 million users. Because the users who login to Twitter through a third-party app never see the ads displayed by the company this is significant adjustment.

Twitter also noted that using its new counting method it also estimates that only 8.5% of the active users — about 23 million —  use a bot which requires no action on the part of a user to gain access to Twitter’s servers.

The counting change also affects Twitters growth rate. Eliminating 14% of Twitter’s user base slows its MAU growth rate by 0.5%, from 4.4% to 3.9% according to The Wall Street Journal. That allows Twitter to claim sequential growth of 7.5%, up from 4.4% in the first quarter. The company also said that there is no material change to the MAU counts from previous quarters.

Twitter stock rose as much as 3.4% Tuesday morning following the late Monday announcement. In early afternoon trading the stock is up about 2.1% at $44.19 in a 52-week range of $29.51 to $74.73.

ALSO READ: Are Analysts Really Chasing Twitter Up as Much as It Seems?

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About the Author Paul Ausick →

Paul Ausick has been writing for 247Wallst.com for more than a decade. He has written extensively on investing in the energy, defense, and technology sectors. In a previous life, he wrote technical documentation and managed a marketing communications group in Silicon Valley.

He has a bachelor's degree in English from the University of Chicago and now lives in Montana, where he fishes for trout in the summer and stays inside during the winter.

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