Twitter Surprises by Adding New Users

Twitter finally showed signs of addressing its biggest challenge: attracting new users, according to Bloomberg. Ever since the company went public in 2013, it has been battling the perception that it’s a dying platform. But Twitter showed signs of new life in the first quarter, reporting that average monthly active users rose 6 percent from last year to 328 million.

The number of daily users has been increasing at a faster pace each quarter for the past year, Twitter said, even benefiting this year from “new and resurrected users following more news and political accounts,“ especially in the U.S. CEO Jack Dorsey managed to defy investor expectations by reviving user growth; now he has to do the same for revenue after Twitter posted its first quarterly decline since going public in 2013. The company plans to use its momentum to convince marketers to spend more on ads.

Still, Twitter expects revenue growth to “meaningfully lag“ audience growth for the rest of the year. As the company struggles to define its future, it faces competitors with larger and faster-growing user bases, like Facebook and Snap, which went public in the first quarter. Instagram announced that it added 100 million monthly active users since December, for its fastest-ever growth, bringing the total to 700 million.

After a failed process to sell itself in 2016, Twitter wants to prove it can go it alone and reach profitability by the end of this year. It has wielded the ax in pursuit of that goal. The company sold its Fabric developer services business to Google, shut down its Tellapart ad tech offering, and cut some planned ad products. First-quarter earnings, excluding some items, came in at 11 cents a share, well ahead of the 1 cent analysts estimated.

The eliminated products helped focus the business, but will make it even harder for revenue to recover, COO Anthony Noto said on a call with investors. Twitter will meet with all the biggest spenders in advertising to convince them that with a growing audience base and a lower price, their ads would be a valuable return on investment, he said. But the company is competing in a digital marketing landscape where Facebook and Google get the majority of the money.

Twitter reported first-quarter revenue of $548 million, beating analysts’ estimates of $509 million. The company said that some work to improve its product, such as showing people more relevant tweets at the top of their timelines, has attracted more visitors to the service. Efforts to curb abuse and harassment have led to a decrease in reports and blocking from users, which the company described as “meaningful progress.“