Twitter sales plunge 27% but users grow

Twitter revealed record numbers of new accounts but swung into a loss as the coronavirus crisis hit spending by advertisers.

The US social media group said 14m more users are using its platform every day compared to a year ago, taking the total number to 166m.

The business said this was driven by interest in the ‘global conversation’ about the pandemic, with users seeking to ‘learn about Covid-19, to connect with their interests, and to find people with common experiences’.

But the surge came as economic turmoil caused by the coronavirus took a sledgehammer to advertising budgets, with Twitter revealing sales plunged 27 per cent in the second half of March.

That meant the firm only increased its revenues by £2.4million overall in the first three months of 2020, pushing it into a £6.7million loss, compared to a £152million profit during the same period in 2019.

Twitter’s results echoed those of its main competitors for advertisers, including Facebook, Google-parent Alphabet and Snapchat-maker Snap, which also saw drop-offs in demand last month.

In contrast, Microsoft has emerged as a potential winner from the crisis after it revealed the shift to home working had prompted strong demand for its Teams online meeting software and its Xbox gaming services.

However, Twitter, Alphabet and Facebook said there were signs of an advertising recovery in April as Asian countries began to lift lockdown measures. About 84 per cent of Twitter’s revenues come from advertisements on its service and apps.

The company said it would slash costs in response to the crisis and that it hoped to make it easier for clients to display so-called ‘direct response’ ads, to meet growing demand from firms who are trying to sell video games to people stuck indoors.

‘These are unprecedented times for Twitter and the world, and we are incredibly grateful for our team and their focus and resilience,’ a spokesman said.

‘Our work has never been more important. More people than ever are coming to Twitter to learn about Covid-19, to connect with their interests, and to find people with common experiences.

‘We have responded quickly and decisively to the challenges presented by the current environment.’ Hours earlier, Microsoft smashed Wall Street’s predictions for sales and profits as its customers shifted to working at home. 

Sales for the three months to March 31 increased 15 per cent to £28billion – compared to analyst predictions of £27billion – and profits jumped by 22 per cent to £8.6billion.

The results were seen as a major vindication of boss Satya Nadella’s efforts in the past six years to focus on cloud computing, in which companies use Microsoft’s data centres for computing power.

However, Nadella warned its business unit may yet face tough times as economic turmoil causes small businesses who buy its products to collapse.

‘Ultimately, Microsoft is not immune from what is going on,’ he said.