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Japan Is a Strong Growth Engine for Twitter

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Revenue from Japan jumped 44%

Besides the United States, Japan is the only other country whose performance Twitter (TWTR) breaks out as a separate item. In recent times, Japan has emerged as Twitter’s strongest growth engine. And that was true in the latest quarter as well.

Twitter’s Japan revenue increased 44% YoY (year-over-year) to $130 million in the third quarter with growth accelerating from 23% a year earlier. Twitter’s growth in Japan outpaced the 28% YoY growth in the United States and 29% YoY growth worldwide in the third quarter.

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Huge commercial opportunity for Twitter

Japan’s contribution to Twitter’s overall top line is also on the rise. In the third quarter, Japan accounted for 17.2% of Twitter’s global revenue, up from 15.4% a year earlier. Spending on digital ads in Japan is on track to hit $12.4 billion this year, representing an attractive revenue opportunity for Twitter. But the commercial opportunity for Twitter in Japan is still enormous considering that digital channels currently account for just about a third of Japan’s total media ads outlays.

Ad-funded companies

Although Twitter has been working to diversify its revenue sources, advertising sales still account for the vast majority of the company’s revenue. In the third quarter, for instance, advertising accounted for 85.6% of the company’s total revenue. At Google parent Alphabet (GOOGL), advertising accounted for 86.1% of revenue in that period. Facebook (FB), Yelp (YELP), and Baidu (BIDU) relied on advertising for 98.5%, 96.7%, and 80.5% of their total revenues, respectively, in the third quarter.

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