After the market close today, Twitter Inc (NYSE:TWTR) reported its first earnings as a public company. Overall, shareholders were disappointed and sent shares down over 18% in after hours trading. So how did the company open its first conference call as a public company? Talking about the NBC show ‘The Voice’. Below is an excerpt from the beginning of the conference call.
Twitter Inc (NYSE:TWTR) CEO Dick Costolo
When events happen, the event itself and the conversation surrounding the event unfold on Twitter, a great TV example is NBC show “The Voice,” one of the most watched programs on television.
During an episode in November, “The Voice” gave fans a five minute window in the live show to save their favorite contestant by tweeting that performer’s name with the #voicesave.
The show’s celebrity coaches also joined in tweeting their followers to rally support for their ferret contestants and hundreds of thousands of Tweets later, cat robeshy, a young whom from Raleigh, North Carolina was the first reality competition contestant saved by a Twitter vote.
It’s moments like these coupled with a strong holiday shopping season that helped drive great Q4 results for us, total revenue reached $243 million, up 116% year over year, ad revenue reached $220 million, up 121% year over year and non-GAAP adjusted EBITDA margins reached 18%, like we will get into a lot more detail on these results in a few minutes.
First, I want to talk about our user growth.
We are confident in our ability to continue to scale revenue by expanding our global reach and introducing and scaling new ad products even as we continued to maintain some of the industry’s trickest limits on ad load in order to optimize for the user experience.
With confidence in our ability to scale revenue, we are doubling down in 2014 to accelerate the growth of our core user base.
Let me talk to you for a bit about how we started down that path in Q4 and then I’ll talk about 2014 more broadly.
By bringing the content of the Twitter Inc (NYSE:TWTR) forward, we can increase high quality interactions and make it more likely that new or casual users will find the service as indispensable as our existing core users do. And we took initial steps in that direction with introduction of media time lines and social actions in October and we are already starting to see early signs that those initiatives are working well, for example, user interaction in the form of favorites and retweets is up more than 35% since launching these features in Q4. Other recent changes like putting direct messaging front and center in our native mobile apps on ISO and Android are also driving increased interaction with messaging up more than 25% just since that change, search has also become one of our fastest growing features with a 120% increase in total searches year over year.
Outside of the core product experience we are also rolling out a number of improvements that we expect will have a positive impact on user growth and retention over time, these include much simpler user onboarding experience with native mobile sign-up, along with other methods of re-engaging inactive users.
It’s important to realize, however, that it will be a combination of changes introduced over the course of the year that we believe will start to change the slope of the growth curve.
Furthermore, I want to point out that some product changes we could make could result in short-term fluctuations in some of our operational metrics, particularly time line views.
As a quick reminder, time line views are kind of a proxy for the amount of content our users consume.
They were impacted in Q4 by a series of product improvements across both IOS and Android that were designed to increase interaction per time line view.
Those product changes worked extremely well driving total interactions and interaction per time line view up significantly.
We are essentially increasing the value of each time line view as users are interacting with their time line views at a much higher rate than ever before.
And the more people interact with each other and the content on Twitter Inc (NYSE:TWTR), the better it is for our users, our partners, advertisers and for the company, obviously.
Threaded conversations are another great example of this.
Threaded Twitter Inc (NYSE:TWTR) conversations make it much easier to follow a conversation on Twitter Inc (NYSE:TWTR) but also cut down on time line views because users no longer need to scroll back and forth to find and interact with related replies.
We believe that this new conversation approach offers a better experience for existing users and more importantly helps new users more quickly grasp the conversational nature of the platform.
We see significant room also for monetization growth in 2014. We are rolling out and scaling new ad products with great success.
In Q4 we saw strong adoption of our self-serve product in the US we launched a number of important targeting capabilities to better serve both brand and direct response advertisers who can now create tailored audiences, track online conversions and directly target TV conversations happening on Twitter Inc (NYSE:TWTR).
We also began the international expansion of our self-serve ad platform with launches in the UK, Canada and Ireland.
These initiatives are just beginning but are already off to a great start and we have many more important launches coming in 2014 as we continue to expand our platform and offerings again for users, partners and advertisers.
I’m also proud of the progress the team has made here in increasing the quality and pace of our product launches.
Twitter Inc (NYSE:TWTR) made a considerable effort in 2013 to develop a more robust mobile experimentation framework which is helping us significantly increase our product launch cadence.
Twitter Inc (NYSE:TWTR) developed this infrastructure to help us test much more quickly and we are seeing the benefit both in terms of the quality and quantity of product launches.
One of our core values as a company is to reach every person on the planet and in 2014 we are focused on building a Twitter Inc (NYSE:TWTR) that is truly accessible and valuable to everyone.
We launched a few things that really started to get that fly wheel of increased user interaction going in Q4 and I’m delighted with the early results.
Importantly, these results give us confidence in our other high hypotheses about the product.
