It’s not just Facebook that has released a quarterly performance report. Twitter has also posted its Q3 numbers, showcasing a steady increase in both users and revenue. However, as far as the current ambitious growth targets the platform is after, ‘steady’ might not cut it. Though Twitter has invested heavily into new projects and initiatives, the immediate pay-offs don’t seem to fall flush with their current figures.

Data Crunching

Starting off with the most important growth factor, Twitter’s daily active user (DAU) count has risen to 211 million (from 187 million in Q3 2020) – a 13% YoY increase. It may not sound like much, but a double-digit percentage increase is still quite substantial given just a year’s time.

Also worth noting that between Q2 and Q3 2021, Twitter did not add any new users in the US at all. The 5 million quarterly increase came from new users outside North America. Though not necessarily a bad thing, given the platform’s numerous growth potential in other markets, it may become a future concern for US-based investors since the majority of Twitter’s revenue is driven by US users.

On the topic of revenue, despite using slightly skewed YoY charts as opposed to quarterly performance ones, Twitter brought in $1.9 billion in revenue just in Q2 of this year. Q3 added $94 million on top of that, with the bulk of the amount coming from the US.

Some form of growth is always better than no growth at all. On that note, it’s quite interesting to consider where Twitter’s usage stats are trending with respect to its growth targets. Part of its Analyst Day Presentation, Twitter’s ultimate short-term goal is to reach 315 million mDAUs by Q4 2023 and a total revenue generation of about $7.5billion in the same time.

Here’s how they’re currently doing:

Twitter was already at 199 million mDAU during Q1 of this year, rising to 206 million by Q2 (+7m). It’s currently sitting at 211 million mDAU in Q3, 5 million more than the previous quarter. To reach its goal of 315 million mDAU by 2023, it’ll need an annual growth rate of around 38.6 million mDAU, which is a bit off right now. To get to that annual growth rate, an average of around 9.65 million mDAU per quarter is needed. As of the moment, the best Twitter has been able to produce is only 52% of that projected amount.

Revenue-wise, Twitter is expected to hit $5.1 billion by year-end, meaning that it needs to acquire the remaining $2.4 billion within the next 2 years to hit its mark. Though it will need significant boosting, the revenue margins are slightly more manageable when compared to the gaps that need closing in terms of user-growth.

It’s imperative that Twitter hits these marks, otherwise it could face rather significant changes. Last year, a group of activists bought their way onto Twitter’s board, pushing for the replacement of current Twitter CEO Jack Dorsey. The group felt that Dorsey wasn’t able to maximize the platform’s potential. Twitter’s executive team was able to negotiate a parley for Dorsey to remain based on the previously-mentioned ambitious growth rates. So if Twitter can’t hit these numbers, then you can bet that Jack Dorsey will be shown the door, which potentially spells a massive shift for the platform.

The Wrap

In line with their numbers and the reasoning behind them, it’s now clear why Twitter has been dishing out and trying new ideas left and right. In an attempt to gain better traction and generate more traffic, thus more revenue, Twitter has been trying new options to better attract potential new users. Though not all of their projects bore positive results, with some even falling completely flat, what achievements it was able to acquire in Q3 barely dented the surface that’s needed to ensure that Twitter stays the way that we know it once that 2023 deadline hits.

Could Twitter meet the targets? Will Jack Dorsey remain CEO? Quite possibly, albeit with a ridiculous amount of challenges, the answer is yes, but Twitter will need to find its direction and find it fast. Perhaps its spaces could prove pivotal in its quest. With rising eCommerce opportunities and a shift to focus on “higher connectivity”, Twitter may yet find its breakthrough.

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Sources

https://bit.ly/3EjZXqn