Twitter has admitted to overstating user numbers for approximately three years. This follows its Q1 2022 results since the company agreed to be bought out by Tesla chief Elon Musk for US$44 billion. Twitter previously miscalculated user numbers for more than three years in 2017, as reported by The Wall Street Journal previously.
The company explained in its financial earnings release that an error was made in March of 2019 when it launched a feature that allowed users to link multiple separate accounts together to conveniently switch between accounts. As a result of the error, actions taken via the primary account resulted in all linked accounts being counted as monetisable daily active users (mDAU). "This resulted in an overstatement of mDAU from Q1 2019 through Q4 2021," Twitter said.
In Q4 2020, for example, Twitter overstated 1.1 million mDAU for international markets while in the US and 1.4 million globally. In Q4 2021, mDAU for international and global were overstated by 1.5 million and 1.9 million respectively. Twitter defines mDAU as people, organisations, or other accounts who logged in or were otherwise authenticated and accessed Twitter on any given day through twitter.com, Twitter applications that are able to show ads or paid Twitter products, including subscriptions.
Meanwhile, Twitter saw a 16% year-on-year increase in Q1 2022 revenue which totalled US$1.2 billion, or 19% on a constant currency basis, reflecting headwinds associated with the war in Ukraine. Ad revenue totalled US$1.11 billion, marking a 23% increase. Subscription and other revenue totalled US$94 million, a decrease of 31% year-over-year. Its average mDAU was 229.0 million for the first quarter, up 15.9% compared to Q1 of the prior year.
Average international mDAU was 189.4 million for the period, up 18.1% compared to the same period last year. Its net income was US$513 million which includes a pre-tax gain of US$970 million from the sale of MoPub for US$1.05 billion and income taxes related to the gain of US$331 million.
Twitter's deal with Musk is expected to close later this year and CEO Parag Agrawal said that while there will be no job cuts at the moment it is freezing all hiring activities until the deal is done.
Tesla's chief has been vocal about wanting to turn Twitter into a platform that strongly supports free speech. He said recently that free speech is "the bedrock of a functioning democracy" and described Twitter to be the "digital town square" where matters important to humanity's future are discussed. Other changes Musk previously said he would make to Twitter include softening the platform's stance on content moderation, shifting its business model to focus more on subscriptions, including an edit button for tweets, providing authentication checkmarks to users who pay for subscription service Twitter Blue, and taking the social media company private, The Wall Street Journal reported.
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