Twitter is in the process of turning private after the board accepted a $44 billion buyout offer from multi-billionaire Elon Musk. But ahead of that takeover, the company has publicly shared its quarterly earnings for one more time. The recently published Q1 2022 earnings report reveals an interesting fact. The social network doesn’t have as many users as it thought. Twitter has been incorrectly counting its daily users since 2019. It overcounted “monetizable daily active users” or mDAUs by up to 1.9 million each quarter.
According to the official report (via), this miscalculation happened due to a technical error related to linked accounts. In March 2019, Twitter rolled out a feature that allowed users to link multiple separate accounts together so they can quickly switch between them. But the company then started counting all linked accounts as mDAUs if the primary account was active. That’s regardless of whether other accounts were in use.
From Q1 2019 through Q4 2021, Twitter overstated the mDAUs in its quarterly earnings report. The Q1 2022 report provides the correct mDAU figures for the period up to which data is available. The difference was highest in Q4 2021 when it reported 1.9 million more mDAUs than it actually had.
This miscalculation and incorrect user count don’t change things much though. Twitter currently (Q1 2022) and correctly has 229 million average daily users. That’s almost 15 million more than it had in Q4 2021 and around 33 million more than a year earlier.
However, Twitter reported an operating loss of $128 million this past quarter, which marks a -11 percent operating margin over the total revenue of $1.20 billion. In contrast, the company had a five percent operating margin a year earlier, resulting in a $52 million operating profit.
Twitter had overcounted its users in the past as well
Interestingly, this isn’t the first time Twitter was incorrectly counting its active users. Back in October 2017, the social network revealed that it falsely reported monthly active users (MAUs) since the fourth quarter of 2014. The company said it counted users of certain third-party apps as Twitter MAUs. This resulted in it overstating average MAUs by up to two million for three straight years.
Thankfully, Twitter will no longer require to publicly share these numbers once it turns private. The deal may not close until later in the year but due to the pending acquisition, the company will not provide any performance guidance in the future. It is also “withdrawing all previously provided goals and outlook”. This may very well be its last public disclosure of earnings report too.
2022-04-30 15:05:27